DISTRIBUTION RULES March 2015

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1 DISTRIBUTION RULES March 2015

2 TABLE OF CONTENTS 1 Enactment Interpretation Sources of Revenue - Distribution Pools Distribution - Broadcast, Retransmission and Non-Broadcast (Pay, Specialty, Cable and Satellite) Television Performances Distribution - Concert Performance Distribution - Cinema Performances Distribution - Radio & General, Pay Audio and Satellite Radio Performances Distribution Private Copying Royalties Distribution - Ringtone Distribution Satellite Radio Distribution - Internet Distribution - International Performances Adjustments Distribution Periods Distributions to International Affiliated Societies Allocation of Shares General - Controlled and Non-Controlled Shares Allocation of Shares Re-allocation of Shares Applicable to Arrangements, Adaptations and Orchestrations Notification, Reallocation and Disputes Regarding Shares Value Of A Performance Credit Credits in Suspense Distribution Payments - Payee March 2015 i

3 1 Enactment 1.01 Distribution rules are enacted from time to time by the Board of Directors of SOCAN as a result of circumstances and assumptions made at the time of enactment and may be amended from time to time as a result of changes of those circumstances and assumptions The licence fees received by SOCAN, the interest earned on investments less expenses incurred, and the number of credits allocated to the pools according to the distribution rules, vary from time to time. As a result, the amount that may be attributed to a performance credit may vary from distribution to distribution Rules enacted or amended may be effective from the date they are enacted or amended by the Board of Directors and may take effect in the distribution immediately following their enactment or amendment These rules shall endeavour, as far as possible, to comply with resolutions of the International Confederation of Societies of Authors and Composers ( CISAC ) related to principles governing the fair and equitable distribution of royalties. 2 Interpretation General The distribution rules are approved by the Board of Directors from time to time with the intent and purpose of achieving a fair and equitable distribution of the income collected by SOCAN. These rules are applied and interpreted by the management and Board of Directors of SOCAN in a manner that best achieves this intent and purpose If, in management s view, this intent and purpose is being abused or has been abused, then appropriate action may be taken in order to prevent or remedy this abuse or potential abuse If a member disagrees with the interpretation or application of a rule to their particular case or with any action taken by management under 2.01, then that member may submit a written request for review of that matter to management. Management shall review the matter, make a determination and advise the member accordingly If, after management advises the member according to 2.02, the member disagrees with this determination, then the matter shall be submitted by management to the Board of Directors for its consideration. The Board of Directors may refer the request for review of the matter to a Committee of the Board for its consideration. Any decision made, when approved by the Board of Directors, shall be final. March

4 3 Sources of Revenue - Distribution Pools Domestic Distribution Pools: Net overhead or net overhead rate means the net performing rights expenses in relation to the domestic performing rights revenue, expressed as a percentage Broadcast Television and Television Retransmission Distributions All revenue from licence fees from broadcast television for terrestrial and AV online services and broadcast television retransmission royalties, less net overhead, shall be pooled for the purposes of the television distribution Non Broadcast Television Distribution All revenue from license fees, less net overhead, from non-broadcast television licensees for terrestrial and AV online services shall be pooled for the purposes of the non-broadcast television distribution Concert Distribution All revenue from concert licence fees, less net overhead not to exceed $2,000 per concert, plus 20% of the revenue from licence fees, less net overhead from licences issued under Tariffs 3.A (Cabarets, cafes, clubs, cocktail bars, etc), 5.A (Exhibitions & Fairs), 8 (Receptions, etc.), 9 (Sporting Events) 10 (Parks), 11 (Circuses and ice shows), 12 (Theme Parks) shall be pooled for the purposes of the concert distribution Cinema Distribution All licence fee revenues from (a) Tariff 6 (Motion Pictures) licence fees; and (b) the Audio-Visual portion of Tariff 23 (Hotel and Motel In-Room Services); and (c) the licence fees from online movie rentals; less net overhead rate shall be pooled for the purposes of the Cinema Distribution Radio, Radio Retransmission & General Distribution For the purposes of the Radio, Radio Retransmission and General Distribution, all revenue from: (a) radio licence fees under Tariffs 1.A (Commercial Radio), excluding low music use station fees under this tariff ( Low Music ), 1.B (Non-Commercial Radio) and 1.C (CBC Radio) ( Radio Tariffs Revenues ); and (b) Low Music and Radio Retransmission fees ( Low Music/Retransmission Revenues ); and (c) 80% of the revenue from licence fees, from licences issued under Tariffs 3.A (Cabarets, cafes, clubs, cocktail bars, etc), 5.A (Exhibitions & Fairs), 8 (Receptions, etc.), 9 (Sporting events), 10 (Parks), 11 (Circuses and ice shows), 12 (Theme Parks) and all revenue from licence fees, from licences issued under all other tariffs other than those in 3.01, 3.02, 3.03 and 3.04 ( General/Background Music Tariffs ); and March

5 (d) Internet radio Tariffs 22.B (Commercial Radio), 22.C (Non-commercial Radio) and 22.E (CBC Radio) less net overhead rate, shall be pooled into the following three pools namely the CBC pool, Survey of Radio pool and Census of Radio pool. CBC Pool CBC pool will include: (a) all revenue from Tariff 1.C and the portion of the revenues from the Low Music/Retransmission Revenues equal to Tariff 1.C s share of the total Radio Tariffs Revenues ( CBC Revenues ); and (b) the portion of revenues from the General/Background Music Tariffs necessary to ensure that the share of the CBC Revenues in relation to the total revenues of the Radio Tariffs Revenues and Low Music/Retransmission Revenues is no less than the CBC s listener share of the Canadian radio market based on the audience data assessed in the last twelve months ( Market Share Adjustment ). This Market Share Adjustment will be reviewed by the Tariff, Licensing and Distribution Committee ( TLD Committee ) on at least an annual basis and the TLD Committee may recommend that it be adjusted. If the TLD Committee recommends a change to the Market Share Adjustment, it will be subject to approval by the Board of Directors; and (c) the portion of 22.E as it relates to CBC s internet radio licence fees; and (d) less net overhead rate applied against the revenue in (a), (b) and (c). Survey of Radio Pool Survey of Radio pool will include: (a) all revenue from Tariffs 1.A, excluding Low Music, 1.B, 22.B and 22.C whose programming has been analyzed on a survey basis and the portion of the revenues from the Low Music/Retransmission Revenues equal to this pool s share of the total Radio Tariffs Revenues ( Survey of Radio Revenues ); and (b) the portion of the revenues from the General/Background Music Tariffs necessary to ensure that the value of each credit in this pool is of equal value based on the value of the highest credit ( Credit Value Adjustment ). The Credit Value Adjustment ensures that the value of a credit or performance credit on a Non-Commercial Radio Station is equal in value to a performance credit on a Commercial Radio Station; and (c) once distributions have been made from the General/Background Music Tariffs revenues for the Credit Value Adjustment and the Market Share Adjustment, any additional revenues left from the General/Background Music Tariffs will be distributed between the Survey of Radio pool and the Census of Radio pool proportional to each pool s share of the Radio Tariffs Revenues; and (d) less net overhead rate applied against the revenue in (a), (b) and (c). March

6 Census of Radio Pool Census of Radio pool will include: (a) all revenue from Tariffs 1.A, excluding Low Music, 1.B, 22.B and 22.C whose programming has been analyzed on a census basis and the portion of the revenues from the Low Music/Retransmission Revenues equal to this pool s share of the total Radio Tariffs Revenues ( Census of Radio Revenues ); and (b) once distributions have been made from the General/Background Music Tariffs revenues for the Credit Value Adjustment and the Market Share Adjustment, any additional revenues left from the General/Background Music Tariffs will be distributed between the Survey of Radio pool and the Census of Radio pool proportional to each pool s share of the Radio Tariffs Revenues; and (c) less Net overhead rate applied against the revenue in (a) and (b) International Incoming Distribution Pool: Distribution of Royalties from International Affiliated Societies All revenue from international affiliated societies is subject to verification for completeness and reasonableness and is paid to SOCAN members in accordance with the performance documentation received from the remitting international affiliated societies Pay Audio Distribution All licence fee revenues from (a) Pay Audio Tariff; and (b) the musical services portion of Tariff 23 (Hotel and Motel In-Room Services); and (c) the pay audio portion of Tariff 22.D (Internet); less net overhead rate shall be pooled for the purposes of the Pay Audio Distribution Ringtones Distribution All revenue from Tariff 24 (Ringtones), less net overhead rate, shall be pooled for the purposes of the Ringtone distribution Satellite Radio Distribution (a) All revenue from Tariff 25 (Satellite Radio); and (b) The satellite portion of Tariff 22.D (Internet); less net overhead rate against the revenue in (a) and (b), shall be pooled for the purposes of the Satellite Radio distribution Internet Distribution (a) all revenue from Tariff 22.A (Online Music Sites), 22.F(Audio Websites), 22.G (Game Sites); and March

7 (b) the portion of 22.D YouTube whose programming represents online music works performances; less net overhead rate applied against the revenue in (a) and (b), shall be pooled for the purposes of the Internet Distribution Audiovisual Internet Distribution All revenue from Tariff 22.D.1 (Online Audiovisual Services), less net overhead rate, shall be pooled for the purposes of the Audiovisual Internet Distribution. March

8 4 Distribution Broadcast, Retransmission, Non-Broadcast (Pay, Specialty, Cable and Satellite) Television Performances and Audiovisual Internet Definitions: Broadcast television performances means performances of musical works transmitted by terrestrial television stations licensed under Tariff 2. Non-broadcast television performances means performances of musical works on pay, specialty, satellite, and other cable television services transmitted by cable, satellite or other means licensed under Tariff 17.A. Retransmission television performances means performances originally transmitted by terrestrial television stations transmitted as distant signals by cable, satellite or other means licensed under the retransmission tariff. Audiovisual Internet performances means performances of musical works in connection with the operations of an online audiovisual service and is authorized distributors Performance Credits Those performances analyzed within the broadcast and the non-broadcast television distribution shall receive one credit for each second of duration as indicated on all audio visual cue sheets that are analyzed and are subject to the following rules If the use and duration of a musical work is not shown on the music cue sheet or audio visual cue sheets of a television program, SOCAN may attribute a reasonable estimate of the probable use and duration of the music content taking into account all circumstances and all available information regarding the program until the actual use and duration is confirmed Weighting Broadcast Television and Television Retransmission Distribution Those performance credits analyzed that are attributed to programs broadcast over the air by Canadian television broadcaster licensees shall be weighted in direct proportion to the licence fees paid by or attributed to each licensee. The performance credits analyzed that are attributed to programs retransmitted by Canadian retransmitters shall be weighted in direct proportion to the audience share of the station or stations whose programming is analyzed according to these rules relative to the fees paid by or attributed to cable retransmitters Non Broadcast Television Distribution (Pay, Specialty, Cable and Satellite Services) Those performance credits analyzed that are attributed to programs on pay, specialty, satellite, and cable television services transmitted by Canadian non-broadcast television licensees shall be weighted in proportion to the license fees paid under or attributed to Tariff 17 for each pay specialty and other television service. March

9 Audiovisual Internet Distribution 4.04 Programming Analyzed Those performances credits analyzed that are attributed to programs on the Internet transmitted by an online audiovisual service and its authorized distributors shall be weighted in proportion to the licence fees paid under or attributed to the service Broadcast Television and Television Retransmission Distribution All of the programming information available and received for programs carried by Canadian broadcast television stations that accurately accounts for the musical content of the programming televised by those stations shall be included in each distribution period and thirteen weeks of programming requested and received that is carried on a television station or stations affiliated with the PBS Network and that is retransmitted in Canada as a distant signal as defined in the Copyright Act shall be included in each quarterly distribution period Non Broadcast Television All of the programming information available and received for programs carried by Canadian non broadcast television that accurately accounts for the musical content of the programming televised by those non broadcast television services Audiovisual Internet 4.05 Definitions All of the programming information available and received for programs carried by the online services that accurately accounts for the musical content of the programming streamed by those online services Theme music shall mean music which identifies a program, a film or a series at the beginning, end, or within the program, film or series Feature, visual or source music shall mean music which falls into one or more of the following categories: (a) (b) (c) music which is performed by, or represented on screen as being audible to one or more of the characters in the scene portrayed; music performed in video clips; music performed in association with choreographed dance sequences; Dramatic, background, or score music shall mean music which is neither theme nor feature music Logo music shall mean music that identifies the production company at the beginning and/or end of a television program, film or television series which is not a theme. March

10 4.06 Dramatic, Background or Score, Theme, Feature, and Logo Use of Music Performance credits shall be given as either dramatic, background or score, theme, opening and closing theme, feature, or logo depending upon the use made of the music according to the notification on a cue sheet or audio visual cue sheet that is acceptable to SOCAN Theme Music Credit Theme music shall receive a full credit for each second of duration for the opening and closing theme in each program. Theme music that is within a program shall receive 60% of the credit normally attributed to a feature performance Feature, Visual or Source Music Credit Feature/visual or source music shall receive a full credit for each second of duration Dramatic, Background or Score Music Credit Dramatic, background or score music shall receive 60% of the credit normally attributed to a feature performance Logo Music Credit 4.07 Exceptions Logo music shall receive 5% of the credit normally attributed to a feature performance Commercial Messages (Jingles), Program Promotions (Promos), Public Service Announcements of One Minute Duration or Less and similar uses of music. With the exception of Public Service Announcements classified as programming in accordance with CRTC regulations and program promotions contained in the program promoted, the music contained in commercial messages, program promotions, and public service announcements of one minute duration or less and similar uses shall not be analyzed for distribution purposes Exercise, Dancercise and Similar Programs The music contained in broadcast and non broadcast television exercise or dancercise programs, other than the opening and closing theme, shall receive a credit that is ordinarily attributed to dramatic, background, or score music Performances of music in broadcast and non-broadcast television series between 2:00 A.M. and 5:59 A.M. Performance of music in television series broadcast between 2:00 A.M. and 5:59 A.M. shall receive 5% of the credit ordinarily attributed to that performance Performance of music on broadcast and non-broadcast television, which is performed during test patterns and static images. March

11 Performances of music on broadcast and non-broadcast television, which is performed during test patterns and static images, shall receive 1% of the credit ordinarily attributed to music performed during the regular program day Performance of music on broadcast and non-broadcast television, which is performed as music over text during program listings. Performances of music on broadcast and non-broadcast television, which is performed during program listings and as music over text shall receive 60% of the credit ordinarily attributed to music performed during the regular program day. March

12 5 Distribution - Concert Performance 5.01 Distribution - Concert Performances A concert, for the purposes of the distribution rules, shall mean a presentation of musical works licensed by SOCAN at a concert hall, auditorium, theatre or similar place of musical entertainment at which individuals attend for the primary purpose of hearing the performance of musical works in concert Performance Credits All performances taking place at concerts as defined in 5.01 that are licensed under the applicable tariff for which the proper license fee has been paid and for which programming has been received shall, subject to the distribution rules applicable to concert performances, receive performance credits based on the following: the license fees received as set out below the duration of the works performed as set forth in Rule Subject to Rule Concerts For a concert where the (pop music) Tariff 4.A and Tariff 5.B license fees are as follows, the maximum amount available for distribution is indicated in the schedule below. Level License Fees Maximum Amount Distributable 1 $ $ and over actual license fees received, plus a pro-rata share of the percentage of the revenue of those license fees collected under tariffs 3A, 5.A, 8, 9, 10, 11 & 12 and allocated to the concert pool, less net overhead not to exceed $2,000 per concert. March

13 A concert licensed under tariffs 4.B and 14 (serious music) shall receive a distribution amount available as if it were licensed under the 4.A Tariff (pop music), with each work receiving its duration s share of the total time of the concert, subject to the following: Concerts not licensed under Tariff 4 that are covered under a blanket license issued to a licensee, shall be deemed to be included in Level Circuses and ice shows for which licence fees received were $1,000 or more, shall be considered concerts for the purposes of Rule The overhead factor referred to in Rule 5, level 13, will be the overhead as at the time the distribution is calculated Performances licensed under Tariff 11.B, Comedy Shows and Magic Shows will be attributed credits equal to the license fees received Performances of music at major league Sporting Events licensed under Tariff 9, and for which SOCAN has received an annual fee of over $300.00, shall be considered a concert for the purposes of Rule 5. A sample of programming requested, and received, from major league sports teams, or obtained by SOCAN shall be included in each 4 th quarter distribution. Major league is defined as teams in the following leagues, including but not limited to: National Hockey League NHL; National Basketball Association NBA; Major League Baseball MLB; World Wrestling Entertainment WWE; Canadian Football League CFL. The performance data sample received or obtained, and the annual licence fee shall be processed as a single concert for each licensee. In each calendar year, teams having the following number of games will be surveyed, as follows: games = 1 log games = 2 logs games = 3 logs Prior to the application of rule to determine the distribution amount for a performance at a concert licensed under Tariff 4.B.2 (ACO Agreement), the licence fee received shall be multiplied by a factor of For a concert where the licence fee received is $500 or more, and at which there are two or more musical acts, royalties shall be allocated and distributed in the following manner: For concerts that feature one headline act and one support act, 90% of the royalties to be distributed on account of that concert shall be allocated to the headline act and 10% of the royalties to be distributed on account of that concert shall be allocated to the support act. March

14 5.03 Programming Analyzed For concerts that feature three or four musical acts, 70% of the royalties to be distributed on account of that concert shall be allocated to the headline act and 30% of the royalties to be distributed on account of that concert shall be allocated to the support acts, on a pro rata basis for share of each act based on music duration as defined in Rule For concerts that feature more than four musical acts, a distribution of the royalties on account of that concert shall be allocated according to the duration of the works performed as set out in Rule Where there are two or more headline acts and no support acts, the headline acts shall be entitled to a distribution of the royalties on account of that concert according to the duration of the works performed as set out in Rule For greater certainty, where there are two or more headline acts, and any support act(s), the headline acts shall share, in equal proportion, the percentage allocated to the headline act according to (a) Headline act or acts shall mean the act or acts that are the primary act or acts performing at the concert and that are featured as such in any advertisements or newspaper reviews. (b) Support act or acts shall mean the act or acts that are secondary to the headline act or acts performing at the concert and that are featured as such in any advertisements or newspaper reviews The complete programming information received for those concerts taking place in each distribution period for which licenses have been granted under the applicable tariff shall be included in each distribution In the absence of complete or reliable programming, SOCAN may make estimates of the number of works performed based upon the best available information that is acceptable to SOCAN Notification Period - All programming information for a concert performance must be received by SOCAN no later than twelve months after the concert performance occurred. Notifications of performances received after this twelve-month period may be included, in special circumstances, in the analysis of performance credits Performances at Venues where a cover charge or admission fee is levied Licensed performances of musical works controlled by SOCAN at premises licensed under Tariff 3.A (bars, etc.) shall, subject to the rules applicable to concert performances, be included in the Concert distribution under Level 1 in Rule , if it can be established to SOCAN s satisfaction March

15 that an approved cover charge or admission fee of $6 or more, exclusive of taxes, was paid by those in attendance at the licensed premise Contrived Concerts If, in SOCAN s opinion, a concert, as defined in paragraph 5.01 is presented primarily to enable a member or members to receive a performance credit, then SOCAN shall have the right to attribute a credit equal to the licence fee received Musical Festivals and Similar Events Attribution of License Fee and Applicable Credits Where concerts are presented as part of a music festival or similar event for which a single licence fee is received on account of all the concerts presented at the festival or event the following shall apply The attribution of the license fee for the purposes of the determination of the applicable level in Rule , shall be deemed to be the total fee received for the entire festival or similar event divided by the total number of days during which concerts were presented Where more than one concert is presented on a day of the festival, the maximum royalties available for distribution will be as per the Level determined in , divided by the number of concerts that were presented on that day In the absence of accurate information concerning the total number of concerts presented during the entire event or the number of concerts presented on a given day, a reasonable number or numbers shall be attributed for the purpose of the application of this rule. March

16 6 Distribution - Cinema Performances 6.01 Programming Analyzed Motion Pictures SOCAN shall obtain the best available performance information relating to motion pictures exhibited across Canada. These performances shall be included in the analysis of Motion Picture performances and shall receive one credit per week, per screen exhibited. In addition, any motion picture not included in the sample data but which is exhibited within Canada and for which evidence of exhibition is provided to SOCAN and for which a license fee has been paid shall be included in the distribution Cinema commercials and trailers are not analyzed for distribution purposes Programming Analyzed Hotel and Motel In-Room Services (Audio-Visual) All of the performance information received pertaining to the audio-visual component of a Tariff 23 licence and for which the licence fees have also been received shall be included in the analysis of the audio-visual performances of Hotel and Motel In-Room Services and shall receive one credit per viewing reported Programming Analyzed Movie Rentals Online For the period beginning January 2013 onwards, all of the performance information received pertaining to the movie rental online component of Tariff 22 licence and for which the licence fees have also been received shall be included in the analysis of the audio-visual performances of Movie Rentals Online and shall receive one credit per viewing reported Determination of Performance Credits The performance credits shall be given according to the rules applicable to the theme, feature, dramatic, background or score, and logo use of music on television, as stated in Rules 4.05 and Weighting Performance Credit Value (a) The value attributed to the Motion Picture performance credit shall be determined by taking the amount of Cinema pool revenues attributable to Tariff 6 and dividing it by the total number of Motion Picture performance credits. (b) The value attributed to the Hotel and Motel In-Room Services (Audio-Visual) performance credit shall be determined by taking the amount of Cinema pool revenues attributable to the audio-visual portion of Tariff 23 and dividing it by the total number of Hotel and Motel In-Room Services (Audio-Visual) performance credits. (c) The value attributed to the Movie Rental Online performance credit shall be determined by taking the amount of Cinema pool revenues attributable to the audio-visual portion of Tariff 22.D and dividing it by the total number of Movie Rental Online performance credits. March

17 7 Distribution - Radio & General, Pay Audio and Satellite Radio Performances 7.01 Duration Credits The performances analyzed within the Radio & General, Pay Audio and Satellite Radio distributions, unless otherwise stated, shall receive duration credits according to the duration of the music performances as follows: 7.02 Exceptions Duration of Work Credit Less than 1 Minute 1 1:00-6:59 4 7:00 or longer One credit per minute Commercial Messages and Advertisements (Jingles), Program Promotions (Promos), Public Service Announcements of One Minute Duration or less and similar uses of music. The performance of music licensed by SOCAN that is contained in commercial messages, program promotions, public service announcements of one minute duration or less and similar uses shall not be analyzed for distribution purposes Bridge, Theme, Signature Tunes, Dramatic Music or fill music. The performance of bridge, theme, signature tunes, dramatic music or fill music shall receive a credit that is equal to its duration as reported to SOCAN. The duration of the music performed in each calendar quarter and reported shall be totalled and each second shall be given one forty-fifth of a credit. If no timings are given a reasonable attribution shall be made Monologues, comedy routines, poetry and other similar works Medleys Performance credits claimed for works that are classified as monologues, comedy routines, poetry and other similar works shall be treated as follows: If there is no musical accompaniment then those works shall not be considered to be within SOCAN s repertoire for licensing or distribution purposes. If there is musical accompaniment and this musical accompaniment is considered to be dramatic or background music then the music portion shall receive 20% of the credit ordinarily attributed to a composer and the spoken word portion that is performed with that music shall be treated as lyrics and receive the credit ordinarily attributed to a lyricist. Medleys shall receive a credit equal to the actual duration of the medley pro-rated among all of the works contained in the medley. March

18 7.03 Programming Analyzed Radio CBC CBC Network and Regional Programming All of the programming information available and received shall be included in the CBC pool in each distribution period. CBC Local Programming 1050 days per year pro-rated equally over each distribution period and in proportion to the population of each locality, received on account of CBC local programming from across Canada, shall be included in the CBC pool in each distribution period Survey of Commercial and Non-Commercial Radio Survey of Commercial Station Programming Each station that is requested to provide programming information to SOCAN shall be asked four times per year. The four requests shall consist of four seven consecutive day periods. One of the periods from each station shall be included in the Survey of Radio pool in each distribution period. Survey of Non-Commercial Station Programming A representative number of days of programming information, consisting of: Either one three day or one four day period in each calendar quarter from each non-commercial station paying annual license fees to SOCAN of $2,000 or more, shall be included in each distribution period Either one three day or one four day period in each calendar year from each non-commercial radio station paying annual license fees to SOCAN of less than $2,000 shall be included in the Survey of Radio pool for each distribution period Census of Commercial and Non-Commercial Radio All of the programming information available and received by way of census for each commercial station and non-commercial station shall be analyzed in the Census of Radio pool for each distribution period. For stations for which the programming information is received by way of survey and census, only the census data will be analyzed. March

19 Background Music Services Programming Analyzed A representative sample of programming information, consisting of 104 days of programming information supplied by background music services in each calendar year shall be pro-rated equally over each distribution period. Performance Credits Works performed that appear on the programs requested and received according to shall receive one credit equal to a performance credit that is ordinarily attributed to a performance in the Radio and General Distribution In-Flight Programming Audio Programming Each musical work listed in the audio programs received from Canadian based airlines for a given period shall receive one credit equal to the credit that is ordinarily attributed to a performance in the Radio and General Distribution. Audio Visual Programming The music contained in each film listed in the audio visual programs received from Canadian based airlines shall receive one credit equal to the credit that is ordinarily attributed to a performance in the Cinema Distribution according to Rule Pay Audio Services A sample of programming information, consisting of 21 days each distribution period, of the 84 days of programming information supplied by pay audio services in each calendar year, if available. Whereas programming information for the Pay Audio Royalties is not available for the years 1997 to 2001, the amounts collected on account of those years and available for distribution under these rules, will be distributed based on programming for the years 2002 to 2004 inclusive on the following basis: Royalties collected for the period prior to 2002 will be distributed in equal proportion allocated to 12 calendar quarters commencing with the distribution for the first quarter of Hotel and Motel In-Room Services (Musical Services) As no programming information for the musical services portion of a Tariff 23 licence is available for the period prior to January 1, 2007, the amounts collected on account of those years and available for distribution will be distributed based on the programming information that is subject to Rule For the period from January 1, 2007 onwards, royalties collected for the musical services portion of a Tariff 23 licence will be distributed based on the programming information that is subject to Rule , or, as may be required, based partly or exclusively on the programming information received from the musical services licensed under Tariff 23 and for which the licence fees have been received. March

20 7.1 Distribution Private Copying Royalties Distribution of amounts collected on account of the right of remuneration for private copying ( private copying right ) received from the Canadian Private Copying Collective (CPCC) shall be distributed in accordance with the following rules Definitions for the purposes of paragraph 7.1 only: Private Copying Royalties shall mean monies collected on account of the private copying right. Writer shall mean any writer who is a member of SOCAN who has assigned to SOCAN the private copying right as provided for under the Copyright Act of Canada or a writer member of a performing right society affiliated with SOCAN where such a society has granted that right to SOCAN. Publisher shall mean any publisher member of SOCAN that has assigned to SOCAN the private copying right as provided for under the Copyright Act of Canada or a publisher member of a performing right society affiliated with SOCAN where such society has granted that right to SOCAN. Claim shall mean the right of SOCAN to request from the CPCC the payment of private copying royalties to SOCAN for the work of a Writer and/or Publisher. Member shall mean a writer and/or a publisher as defined above Allocation of Amounts Received from the CPCC Only those works determined by the CPCC, in accordance with its by-laws, rules, regulations, policies and agreements among its members, to be entitled to a distribution and subject to these rules, shall qualify for a distribution by SOCAN to its members or to its affiliated societies, and Only those Members on whose behalf SOCAN is entitled to claim and for works it has received royalties from the CPCC on account of the right of remuneration for private copying shall qualify for a distribution by SOCAN Works Entitled to a Distribution Subject to these rules, a Writer shall receive a distribution credit for those works that SOCAN is entitled to claim and has received royalties from the CPCC on account of the claim made by SOCAN Subject to these rules, a Publisher shall receive a distribution credit for those works that SOCAN is entitled to claim and has received royalties from the CPCC on account of the claim made by SOCAN Distribution for Works Performed in 2000, 2001, Distribution of private copying royalties collected by CPCC and received by SOCAN for works performed in any of the years 2000, 2001 and 2002, shall be distributed in accordance with the following rule: March

21 The proportion of the private copying royalties of a work allocated to the Writer(s) shall in no case be less than the proportion of private copying right that are allocated to the Publisher(s) of that work, if any, regardless of whether the Publisher(s) has assigned the private copying right to SOCAN or another entity or regardless of whether a claim has been made on the Publisher(s) behalf by SOCAN or another entity Distribution for Works Performed in 2003 and Subsequent Years Distribution of private copying royalties collected by CPCC and received by SOCAN for works performed in 2003 or subsequent years shall be distributed in accordance with the following rules: Rules 13.03, and 14 will not apply to distributions falling within this section so that the proportion of the private copying royalties of a work allocated to the writer(s), if any, may be less than the proportion of private copying royalties that are allocated to the publisher(s) of that work, if any, regardless of whether the publisher(s) has assigned the private copying right to SOCAN or another entity or regardless of whether a claim has been made on the publisher(s) behalf by SOCAN or another entity For published works registered with SOCAN or after April 25, 1996, SOCAN will distribute the private copying royalties received in accordance with written instructions received from all of the member(s) sharing in the work For unpublished works or for published works registered with SOCAN prior to April 25, 1996, in the absence of a specific written notification from all of the member(s) sharing in the work or by a performing right society that is affiliated with SOCAN, the private copying royalties associated with such work shall be credited as follows: Unpublished Works Compositions without lyrics Percentage of Private Copying Royalties Composer(s) 100% Compositions with lyrics Percentage of Private Copying Royalties Composer(s) 50% Lyricist(s) 50% Original Unpublished Works with a Maximum Duration of Public Domain Text of 25% of the Duration of the Entire Work. Where Public Domain lyrics or text of a maximum duration of 25% of the entire work are included in an original unpublished work, the composer or composers shall receive 90% of the private copying royalties normally attributable to a fully copyright protected work. March

22 Published Works Compositions without lyrics Percentage of Private Copying Royalties Composer(s) 100% Publisher(s) 0% Compositions with lyrics Percentage of Private Copying Royalties Composer(s) 50% Lyricist(s) 50% Publisher(s) 0% Original Published Works with a Maximum Duration of Public Domain Text of 25% of the Duration of the Entire Work. Where Public Domain lyrics or text of a maximum duration of 25% of the entire work are included in an original published work, the composer or composers shall receive 90% of the private copying royalties normally attributable to a fully copyright protected work and the publishers will not receive any private copying royalties Copyright Arrangements of Musical Works in the Public Domain General Subject to the rules governing shares applicable to works in the Public Domain with new lyrics and subject to notification from affiliated performing right societies and to rule , the percentage of the private copying royalties of a copyright protected arrangement of the music of a work in the Public Domain, or the adaptation of the lyrics of a work in the Public Domain shall be 25% respectively. The remaining percentage shall not be controlled. Definitions A work in the Public Domain means a work in which no part of the work is protected by the copyright law of Canada. A copyright arrangement, adaptation or orchestration of a work in the Public Domain shall mean a musical work or that part of a musical work that is protected to the extent provided under Canadian Copyright Law. March

23 Published Copyright Arrangements Public Domain Work Without Lyrics Arrangement Without Lyrics Percentage of Private Copying Royalties arranger(s) 25% publisher(s) 0% non-controlled 75% Arrangement With New Lyrics Percentage of Private Copying Royalties arranger(s) 25% lyricist(s) 50% publisher(s) 0% non-controlled 25% Public Domain Work With Or Without The Original Public Domain Lyrics Arrangement Without The Original Public Domain Lyrics Percentage of Private Copying Royalties arranger(s) 25% publisher(s) 0% non-controlled 75% Arrangement With New Lyrics Percentage of Private Copying Royalties arranger(s) 25% lyricist(s) 50% publisher(s) 0% non-controlled 25% Unarranged adaptation of the original Public Domain lyrics or an adaptation of any Public Domain lyrics Percentage of Private Copying Royalties adaptor(s) 25% publisher(s) 0% non-controlled 75% March

24 Unarranged Public Domain Work With New Lyrics Percentage of Private Copying Royalties lyricist(s) 50% publisher(s) 0% non-controlled 50% Arrangement with an adaptation of the original Public Domain lyrics or any other Public Domain lyric. Percentage of Private Copying Royalties arranger(s) 25% adaptor(s) 25% publisher(s) 0% non-controlled 50% Unpublished Copyright Arrangements Public Domain Work With or Without The Original Public Domain Lyrics Arrangement Without Any Lyrics Percentage of Private Copying Royalties arranger(s) 25% non-controlled 75% Arrangement With New Lyrics Percentage of Private Copying Royalties arranger(s) 25% lyricist(s) 50% non-controlled 25% Unarranged Public Domain work with adaptation of the original Public Domain lyrics or an adaptation of any other Public Domain lyrics. Percentage of Private Copying Royalties adaptor(s) 25% non-controlled 75% March

25 Arrangement with an Adaptation of the original Public Domain lyrics or an adaptation of any Public Domain lyric. Percentage of Private Copying Royalties arranger(s) 25% adaptor(s) 25% non-controlled 50% Unarranged Public Domain work with new lyrics. Percentage of Private Copying Royalties lyricist(s) 50% non-controlled 50% Arrangements of copyright works, new lyrics or adaptations of Public Domain lyrics in copyright works The distribution of private copying royalties attributed to an arrangement of a copyright work, to a copyright work with new lyrics, or to a copyright work that incorporates an adaptation of Public Domain lyrics, shall be established according to an agreement, in writing, between the copyright owner and the lyricist or adaptor. In the absence of such an agreement, the new arranger, lyricist, or adaptor, shall not receive any private copying royalties Translations of Copyright Works Unauthorized Translations and Unauthorized New Versions of Existing Musical Works. Credits for private copying royalties attributed to the translator or new lyricist of the new lyrics of an unauthorized translation or new version of a copyright work shall be held in suspense for a period not exceeding six months from the time that SOCAN is advised, in writing, of a claim by the translator, or new lyricist of the new lyrics. If at the end of that six-month period the translation or new version has not been authorized then all credits attributed to the original work, the translation, or the new version of the work shall be made in accordance with the notification given by the original copyright owner. The interests of any authorized parts of an unauthorized translation or version shall continue to receive distribution credits in accordance with the rules. March

26 7.1.6 Performance Period When a translation or a new version has been authorized, SOCAN shall make all future distributions on account of the allocation agreed to by the parties Authorized Translations The percentage of private copying royalties of authorized translations of copyright works are allocated as follows: Published Translated Works Percentage of Private Copying Royalties composer(s) 50% original lyricist(s) 25% translator(s) 25% publisher(s) 0% Unpublished Translated Works composer(s) 50% original lyricist(s) 25% translator(s) 25% Percentage of Private Copying Royalties Translations of copyright arrangements of works in the Public Domain that are subject to rule In each case where the new musical arrangement contains lyrics the lyricist(s) and the translator(s) shall share equally. Published Copyright Arrangements with Translation arranger(s) 25% translator(s) 25% publisher(s) 0% non-controlled 50% Percentage of Private Copying Royalties Unpublished Copyright Arrangements With Translation Percentage of Private Copying Royalties arranger(s) 25% translator(s) 25% non-controlled 50% The periods for which the CPCC will distribute private copying royalties to SOCAN are subject solely to the by-laws, distribution rules, regulations and procedures of the CPCC. March

27 7.1.7 Payment Period Provided the distribution from the CPCC is received by SOCAN within a reasonable time that allows SOCAN to make a distribution to its members, SOCAN shall use its best efforts to distribute the amounts that are received from the CPCC at the next SOCAN quarterly distribution of performing rights royalties following receipt of the amounts from the CPCC Adjustments and Disputes All royalty distributions received from the CPCC are subject to verification by SOCAN for completeness and reasonableness prior to distribution by SOCAN Although SOCAN is not required to review the royalty distributions received from the CPCC for accuracy, SOCAN shall have the right to withhold and/or adjust any private copying royalty distribution on account of a work erroneously credited by SOCAN or the CPCC A dispute by any party regarding a work for which a claim has been made may prevent the CPCC from distributing the private copying royalties of that work to SOCAN or may prevent SOCAN from allocating those amounts received from the CPCC to a Writer and/or Publisher. If private copying royalties have been received by SOCAN, the royalties shall be held in suspense pending resolution of the conflicting claim by the parties, Rule 16 applicable to Notification, Reallocation and Disputes regarding Shares applicable to performing rights shall apply where applicable to the private copying right of equitable remuneration Overhead The amounts allocated to writers and publishers referred to in paragraph shall be net of any cost of distribution determined by SOCAN to be those costs associated with the allocation and distribution of those amounts to its members. 7.2 Distribution - Ringtone Ringtone Downloads Analyzed For the period beginning January 2009 onwards, license fees collected for Tariff 24 licences will be distributed based on all of the available and received information pertaining to ringtones supplied, which is provided by Tariff 24 licensees. This information shall be analyzed in the Ringtone pool for each distribution period. Where that information is missing or incomplete, the license fees collected on account of Ringtones supplied in a particular quarter will be based on the information received to date for that same quarter. 7.3 Distribution Satellite Radio Satellite Radio Performances Analyzed A sample of programming information consisting of 21 days each distribution period, if available. Where performance information is missing or incomplete, the distribution on account of Satellite Radio in a particular quarter will be based on the information received to date for that same quarter. March

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