One month in, CBC's online music service facing funding, royalty, and content pressures

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Issue Date: 
Mar 30 2012 - 12:15pm

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Just a month after the launch of the Canadian Broadcast Company's brand new online music service, CBC Music (you can see our coverage of it here), the service is facing the pressures of cuts in its funding, calls from songwriters and publishers for higher royalties, and from artists questioning the CBC's dedication to Canadian art.

Canada's government has announced its new budget, which slashes CBC funding 10% -- dropping more than $100 million of its $1.16 billion -- which a Spinner.com article suggests "will no doubt have a tremendous effect" on CBC Music.

Meanwhile, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) is calling to revisit CBC's "flat-rate" royalties deal. Commercial radio and other online services in Canada pay royalties "per-song;" as it technically doesn't earn any profits, the CBC gets the flat rate. SOCAN argues the sheer volume of music CBC is offering for free makes a flat fee unrealistic. Some artists and competitors agree.

"As there is a new format [live-streaming] and the CBC is currently paying a nominal fee, it only seems fair that a new rate be negotiated," said singer-songwriter Jim Cuddy. "What concerns private industry is that in the face of massive cutbacks CBC sees fit to launch a new service that won’t generate meaningful revenue," said Rob Braide, of Stingray (more in RAIN here), a commercial webcaster.

Read more about SOCAN's calls for new royalty terms in the Globe and Mail here.

Finally, while Canada's "CanCon" law requires broadcasters to play at least 35% Canadian-produced content, this doesn't apply to online programming, including the CBC's new service. "Therefore (there is) no requirement to direct that percentage of overall royalties to the Canadian music industry... even though CBC Music uses tax dollars for its royalty payments," writes Spinner.com. While some maintain the mandate of the CBC itself ensures its relevance to Canada's people and music, some would like a content requirement formalized for online.

"We come at everything with a Canadian perspective and the focus is much more heavily Canadian than it would be on most surfaces," CBC spokesperson Steve Pratt explains.

But artist Paul Banwatt disagrees: "The whole point of CanCon is the recognition that we're a small population and we want to make sure that our voices, with distinctly Canadian things to say, aren't drowned out. Cultural expression crosses borders more easily now than ever, so you would think the need for protection is at its height."

Read more from Spinner.com here.

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