This article originally appeared in the May/June 2017 issue of Canadian Musician.
By Michael Raine
It seems like a source of great frustration at SOCAN that many songwriters are not bothering to collect their live performance royalties. While most songwriters know SOCAN collects and distributes their performance royalties for radio, TV/film, and online use, many seem to be ignoring their most likely source of SOCAN royalties: concerts. Maybe they don’t know this revenue stream is available to them, or maybe they don’t think it’s worth the hassle. Either way, money is being left on the table.
“There are two issues,” begins Mike McCarty, SOCAN’s chief membership and business development officer. “One is an awareness issue and we work very hard to try to overcome that and appreciate this article because that’ll help; and two, even where there’s awareness, I don’t know if it’s a hesitancy or a lack of motivation to take the action they need to, to enable us to pay them, but between those two things, we spend an awful lot of time and energy here tracking down people who’ve played concerts in order to get the information we need from them to get them paid.”
So how does SOCAN get songwriters paid for concerts? “Several things have to come together,” says McCarty. “We have to have your songs in our database and you have to have them registered or, if not your songs, then the songs you performed. Then we have to get paid by the venue or the promoters – we have to have the licence fee – and then we have to know what you played. It’s kind of that simple. It’s really three things, but the latter one is where it tends to break down.”
To start off, as McCarty explained and all SOCAN members should know, the organization can only pay royalties on songs that are registered, so it’s paramount that all SOCAN members keep their song registrations up to date.Second, the venue or presenter putting on the show must pay the SOCAN licence fee. SOCAN uses the money from these venue licence fees to pay live performance royalties, so if the venue hasn’t paid SOCAN, then it doesn’t have any money from that show to pass on to the songwriters and other rights holders. Luckily, most venues that regularly host live music are licenced by SOCAN.
“There are a lot of businesses out there that willingly pay their fee and are happy to know that they’re supporting the ecosystem the music comes from,” adds McCarty, before cautioning, “There are also a lot of businesses that don’t and there are some pretty prominent entities whose business relies on music that you’d be surprised what their attitude is towards paying.” The lesson for artists is that it may be a good idea to ask the venue ahead of time if it’s licenced by SOCAN.
Aside from the licence fee, the other main criterion is there needs to be a ticket price or admission cost of at least six dollars. “I don’t know where the six dollars came from; it’s an historic figure that’s been there for quite a while and hasn’t been changed,” says McCarty. “So with inflation eating away at the value of our currency, it’s actually in relative terms gone down over the years. So it’s not a huge threshold and every bit helps.”
That six-dollar threshold is important for artists to know, because it’s common for a venue to set a five-dollar cover charge at the door, or for the artists themselves to set a price of five dollars or less to entice audiences. Musician-friendly venues will advise musicians, in such scenarios, to bump the price up to six dollars, but don’t count on it.
Luckily, there are folks like Shawn Creamer, owner of the Dakota Tavern in Toronto and The Hayloft Dancehall in Prince Edward County, ON. “Often, when I’m booking bands at the Dakota and it’s their first time through and they’re going to play on a Tuesday or Wednesday night, they tell me they want to set the ticket price at five dollars,” says Creamer. “We always tell them, ‘No, you should do six or seven dollars because then you can submit your set list [to SOCAN].’”
“God bless him! I love him! We’ll have to make him Licensee of the Year,” exclaims McCarty when Creamer’s words are recounted to him. “A lot of businesses and business owners just don’t understand what it is and how it works and they don’t connect the dots that this money they’re paying [in licence fees] goes to the people who wrote the music that’s being presented in their place. They might understand the value of music to their business, they just don’t get that connection, often because they’re handing money over to the artist. They’re saying, ‘Well I just paid you,’ but they didn’t pay them for their songwriting. These days, the way that music trends have gone, more and more recording artists and performing artists are doing songs that they didn‘t write by themselves or, in many cases, at all. Let’s say in the case of co-writing, the co-writers, generally speaking, usually aren’t on tour with [the performing artist] and they’re not benefitting from the ticket sales or the merchandise sales. Their only economic benefit from the concert business is through their SOCAN royalties.”
The last part of the equation – and where it often breaks down, as McCarty said – is getting the artist to actually submit their show information to SOCAN. Unlike, say, the broadcast or streaming royalties SOCAN collects and distributes, live performances royalties require some administrative work from the artist. Using the online SOCAN members portal, the artist is required to submit a Notification of Live Music Performance (NLMP) form, which details the basic show information, including venue, date, ticket or admission price (if applicable), other artists on the bill (if applicable), and the set list. SOCAN also requires proof of performance and McCarty says they’re pretty flexible about what they’ll accept as proof. It could be something like a ticket stub or website concert listing, or an email or contract from the promoter or venue. Altogether, it’s not a very onerous process, especially given the rewards.
“You’d be surprised at how much could be sitting there for you after a couple of years, even though you’re not a household name or a national touring act. So we certainly think it’s worth it for anybody to go get the money,” says McCarty.
Regarding how much SOCAN is paying, it is the greater of two options. First, the licence fee paid to SOCAN by the venue is three per cent of the ticket and door revenue from that show. That full amount is then passed on to the performing songwriter(s) and other SOCAN rights holders for the songs performed. So, for example, if the venue made $3,000 from ticket sales and admission, it pays $90 to SOCAN and that same amount is passed on as royalties to the relevant rights holders. But the great news for smaller acts is that SOCAN also pays a minimum rate of $75 per show. So even if only $100 dollars was made by the venue, and so only three dollars was received by SOCAN, it still pays out $75 as royalties for that show. So it’s obvious how the live performance royalties can quickly add up.
SOCAN has a pool of money from undistributed licence fees that it uses to pay the difference on those shows where the three per cent fee is less than $75. SOCAN is able to pay out more than it collects on some shows because it also collects a significant amount of money from licence fees for shows where the artist doesn’t submit their information, and therefore doesn’t collect their royalties.
That three per cent licence fee or $75 minimum is paid to all the relevant rights holders (i.e. songwriters and publishers) whose songs were performed. So, in the simplest example, if you’re a self-published, solo singer-songwriter performing your own songs, you keep all SOCAN live performance royalties that are paid for your performances. If you have an equal co-writer, it’s split 50/50. If you perform 19 songs you wrote and one song written by someone else, you get 95 per cent of the money and the other writer receives five per cent. If you have a publisher, they also get a cut.
“I understand people’s hesitancy in that it can seem complicated and we do think the process can be simplified – and we’re working on that to bring it up-to-date technology-wise and user experience-wise – but it’s sometimes a bit baffling when we’ll call somebody and say, ‘You know, we have money here for you and it’s not a trivial amount,’ and it seems to be hard to get them to send the set lists in,” says McCarty. With that, he tells Canadian Musician, “There are really three main points I’d like your readers going away remembering: send us your set lists, send us your set lists, and send us your set lists.”
You get the point.
UPDATE, Oct. 10, 2017: SOCAN and Muzooka have announced a new partnership that will see them integrate their live performance reporting technologies to make it simpler and quicker for artists to report their setlists and collect live performance royalties. For more info, CLICK HERE.
Michael Raine is the Senior Editor of Canadian Musician.