Canada's Supreme Court has dealt a harsh blow to artists and a loving pat on the head to telecoes and gaming companies by getting rid of download fees for music downloaded via the Internet or used in video games.
Distributors of digital music will no longer pay tariffs on downloads of music from the Internet, but will continue to pay tariffs on the streaming of music. Before this decision, there were tariffs on both downloading and streaming.
Canada's performing rights society (SOCAN) previously collected fees for both streamed and downloaded music on the Internet on behalf of artists. Following the rulings, the group will only collect fees on streamed music. Apparently downloads don't count as a performance of the music.
The court maintained that music streamed from a website constitutes a performance and therefore must continue to pay the fee. The court said downloading is a delivery mechanism and did not justify a performance fee. The court's distinction between downloads and streaming can be likened to the difference between going into a shop and purchasing CD where you are not charged a fee just to pull it off the shelf and pay for it, and listening to a song on the radio, where the station will pay the music publisher or a copyright collective for the right to stream the music.
SOCAN (Society of Composers, Authors and Music Publishers of Canada) application to charge fee's for previews of songs e.g iTunes, was thrown out by the court due to the fact that "previews" were research tools and did not constitute charging a fee.
What does this mean for artists? Royalty organisations argue that the new fees sought and the pre-existing (prior to court ruling) tariffs on downloads are imperative to ensure the financial security of musicians. The counter-argument is that lower prices ( prices not affected with tariffs) encourage a higher volume of legitimate paying customers and therefore a decrease in the instance of piracy, making the process more viable for the artist.