Proposed Tariffs

STATEMENT OF ROYALTIES TO BE COLLECTED BY CMRRA-SODRAC INC. (2011-2013) AND SODRAC (2010-2013) FOR THE REPRODUCTION, IN CANADA, OF MUSICAL WORKS, AND BY SOCAN (2011-2013) FOR THE COMMUNICATION TO THE PUBLIC BY TELECOMMUNICATION OF MUSICAL OR DRAMATICO-MUSICAL WORKS, IN CANADA, BY ONLINE MUSIC SERVICES OF MUSICAL WORKS EMBEDDED IN MUSICAL AUDIOVISUAL WORKS FOR THEIR TRANSMISSION BY A SERVICE, IN CANADA, IN 2018

Short Title 1. This tariff may be cited as the Online Music Services Tariff (CSI: 2011-2013; SOCAN: 2011-2013; SODRAC:2010-2013)SODRAC Tariff No. 6, Reproduction of Musical Works Embedded in Musical Audiovisual Works for Transmission by a Service, 2018.

Definitions 2. In this tariff, “cue sheet” means a report containing the following information: the title of the musical audiovisual work, the title of each of the musical works embedded into the musical audiovisual work, the name of the author and composer of each of the musical works, the duration of each of the musical works, the duration of the musical audiovisual work; (« rapport de contenu musical »)

“audio track” means a sound recording of a musical work, and, for greater certainty, excludes a music video; (« piste sonore »)

“authorized distributor” means any person who has entered into an agreement with a licensee permitting that person to distribute the service; (« distributeur autorisé »)

“bundle” means two or more digital files offered as a single product; (« ensemble ») “CMRRA” means Canadian Musical Reproduction Rights Agency Ltd.; (« CMRRA ») “collectives” means CMRRA, CSI, SOCAN, and SODRAC; (« sociétés de gestion ») “CSI” means CMRRA-SODRAC Inc.; (« CSI ») “download” means the receipt by an end user of a file from a download service and making a reproduction thereof onto a storage device; (« téléchargement »)

“download service” means a service that transmits to end users a file that is intended to be copied onto aan end user’s local storage medium or device and results in a durable copy of that file; (« service de; (« téléchargement »)

“end user” means a person who accesses an online music service, whether the person pays a fee or provides other consideration for the service or uses the service free of charge; (« utilisateur final »)

“file” means a digital file of either an audio track or a music videoa musical audiovisual work; (« fichier »)

“free on-demand stream” excludes an on-demand stream provided to a subscriber; (« transmission sur demande gratuite »)

“free subscription” means the provision of free access to limited downloads or on-demand streams to a subscriber; (« abonnement gratuit »)

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“gross revenue” means, in relation to an online music service, all revenues received by a licensee whether in cash, in kind, in barter or contra, including revenues received for use of the service, and revenues received for promotional activities, such as advertising, that are attributed the aggregate of (a) all revenues payable by or on behalf of end users for access to streams or downloads delivered by a service or its authorized distributors, including membership, subscription and other access fees; (b) all other revenues payable to a service or its authorized distributors in respect of the service, including amounts paid for advertising, product placement, promotion and sponsorship, and commissions on third-party transactions; and (c) amounts equal to the value of the consideration received by a service or its authorized distributors pursuant to any contra and barter agreements related to the operation of the service; (« revenus bruts »)

“hybrid webcast service” means a webcast service where the files transmitted to an end user may also be copied onto a storage device for the purpose of listening to them later, and where the period for which such files are retained, or the number of files that may be so retained, or both, is limited, and established by the service; (« service de webdiffusion hybride »)

“identifier” means the unique identifier an online musica service assigns to a file or bundle; (« identificateur »)

“interactive webcast service” means a webcast service where the files are chosen by the end user and received at a place and time individually chosen by that person; (« service de webdiffusion interactive »)

“licensee” means a person that operates an online music service that is licensed under this tariff; (« titulaire de licence »)

“limited download service” means a download service where the downloaded files, through technological means,that uses technology that causes the file to become unusable upon the happening of a certain event or events, such as the end of the end user’s subscription; (« service de; (« téléchargement limité »)

“musical audiovisual work” Audiovisual work consisting predominantly of musical audiovisual content, including a videoclip, a concert, a musical, a variety show, a program of physical exercises, including any extract of such audiovisual work, fixed on any digital support whatsoever; (« œuvre audiovisuelle musicale »)

“non-subscriber” means an end user other than a subscriber, and includes an end user who receives limited downloads or on-demand streams from a service subject to the requirement that advertising be viewed or listened to; (« non-abonné »)

“on-demand stream” means a stream selected by its recipient; (« transmission sur demande ») “mixed bundle” means a bundle that contains at least one file containing an audio track and at least one file containing a music video; (« ensemble mixte »)

“music video” means an audiovisual representation of one or more musical works, including a concert; (« vidéo de musique »)

“non-interactive webcast service” means a webcast service where the end user exercises no control over the content nor the timing of the transmission of the files; (« service de webdiffusion non interactive »)

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“online music service” means a non-interactive webcast service, a semi-interactive webcast service, an interactive webcast service, a hybrid webcast service, a limited download service, or a permanent download service; (« service de musique en ligne »)

“permanent download service” means a download service, but does not includeother than a limited download service; (« service de téléchargement permanent »)

“play” means the single performance of a file by an end userstream or a limited download; (« écoute »)

“quarter” means from January to March, from April to June, from July to September and from October to December; (« trimestre »)

“repertoire” means, in relation to each collective, the musical works for which itSODRAC is entitled to grant a licence pursuant to section 3 of this Tariff; (« répertoire »)

“semi-interactive webcast service” means a webcast service where the end user exercises some level of control over the content of the files, or timing of the transmission of the files, or bothservice that delivers on-demand streams, limited downloads and permanent downloads of a musical audiovisual work to end users by any means whatsoever (e.g. cable, online, satellite); (« service de webdiffusion semi-interactive »)

“service provider” means a professional service provider retained by a collective society to assist in the conduct of an audit or in the distribution of royalties to rights holders; (« prestataire de services »)

“SOCAN” means the Society of Composers, Authors and Music Publishers of Canada; (« SOCAN »)

“SODRAC” means SODRAC 2003 Inc. and Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc.; (« SODRAC »)

“sound recording” has the meaning given to it in the Copyright Act, R.S.C. 1985, c. C-42; (« enregistrement sonore »)

“subscriber” means a person who accesses an online music service, pursuant to a contract or otherwise, whether the person pays a fee or provides other consideration for the service or uses the service free of charge; (« abonné »)

“webcast service” means a service that transmits files to end users, where the files arestream” means a file that is intended to be copied by the end user onto a local storage medium or device only to the extent required to allow listening or viewing the contents ofto the file at substantially the same time as when the file is received. (« service de webdiffusiontransmitted; (« transmission »)

“subscriber” means an end user with whom a service or its authorized distributor has entered into a contract for service other than on a transactional per download or per stream basis, for a fee, or for other consideration, including pursuant to a free subscription; (« abonné »)

“unique visitor” means each end user, excluding a subscriber, who receives a free on-demand stream from a service in a month. (« visiteur unique »)

Application

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3. (1) This tariff entitles a licensee, and theirservice that complies with this tariff, and its authorized distributors, in connection with the operation of an online music service,

(a) to communicate to the public by telecommunication, in Canada, a musical work in the repertoire of SOCAN, including, as of November 7, 2012, by making it available to the public by telecommunication in a way that allows a member of the public to have access to it from a place and at a time individually chosen by that member of the public;

(a) (b) to reproduce all or part of a musical work in the repertoire of CSI, where the work is embodied in an audio track, or of SODRAC, where the work is embodied in a music video, for the purposealready embedded in a musical audiovisual work for the purposes of transmitting it in a file to members of the publicend users in Canada via the Internet or another digitalsimilar computer network, cable and/or satellite, including by wireless transmission;

(b) (c) to authorize another persona third party to reproduce athe musical work for the purpose of deliveringalready embedded in a musical audiovisual work in order to deliver that file to the service a file that can then be reproduced and transmitted pursuant tothat uses it for the purpose set out in paragraph (a)(a); and

(c) (d) for permanent and limited downloads, to authorize members of the publicend users in Canada to further reproduce, the musical work already embedded in the musical audiovisual work for their own private use, a musical work that has been reproduced and transmitted pursuant to paragraph (a).

in connection with the operation of the service. (2) Despite subsection 3For greater certainty, this tariff does not apply to activities subject to a licence in force between SODRAC and the Canadian Broadcasting Corporation / Société RadioCanada or to activities subject to SODRAC Tariff No. 5 and SODRAC Tariff No. 7.

(a) apply to activities subject to a previously certified tariff, including SOCAN Tariff No. 16 – Background Music Suppliers (2010-2011), SOCAN Tariff No. 22 (Internet – Other Uses of Music), Part F (Audio Websites), SOCAN Tariff No. 24 – Ringtones and Ringbacks (2006-2013), the Satellite Radio Services Tariff (Re:Sound: 2011-2018; SOCAN: 2010-2018), and the Commercial Radio Tariff (SOCAN: 2011-2013; Re:Sound: 2012-2014; CSI: 2012-2013; Connect/SOPROQ: 2012-2017; Artisti: 2012-2014);

4. (b) (1) This tariff does not authorize the reproduction of a musical work of the repertoire embedded in a musical audiovisual work in a medley, for the purpose of creating a mashup, for use as a sample, or in association with a product, service, cause or institution; nor.

(c) authorize the reproduction or communication by telecommunication of a musical work for the purpose of providing a free preview of an entire music album by webcast, in association with the operation of a permanent download service for audio tracks.

(3) For greater certainty, this tariff (2) (a) This tariff does not entitle the owner of the copyright in a sound recording of a musical work to authorize the reproduction of athat work in the repertoire of CMRRA in a music video; and.

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(3) This tariff does not authorize the production of a musical audiovisual work or the synchronization of a musical work in a musical audiovisual work. It authorizes only the transmission by any means whatsoever of existing musical audiovisual works in which the musical work is already embedded.

(b) does not apply to the operation of a service that allows end users to store and retrieve – or allows end users to direct the operator of the service to store and retrieve – a musical work.

Period of Application (4) This tariff applies to activities from January 1, 2011, to December 31, 2013, except in relation to the reproduction of a musical work in the repertoire of SODRAC in connection with the operation of a permanent download service for music videos, for which the tariff applies from January 1, 2010, to December 31, 2013.

Royalties Payable Permanent Downloads 5. (1) Subject to paragraph (6)(b), the royalties payable in a month by a service that offers permanent downloads requiring a SODRAC licence shall be 5.64 per cent of the amount paid by an end user for the download, subject to a minimum of 2.6¢ per musical work in a musical audiovisual work that contains 19 or more musical works, per permanent download, and 8.04¢ per permanent download in all other cases.

Limited Downloads (2) The royalties payable in a month by a service that offers limited downloads requiring a SODRAC licence shall be,

(a) subject to paragraph (6)(a), where the payment is per transaction, 5.64 per cent of the amount paid by an end user for limited downloads, subject to a minimum of 1.73¢ per musical work in a musical audiovisual work that contains 19 musical works or more, per limited download, and 5.36¢ for other limited downloads; and

(b) subject to paragraph (6)(b), where limited downloads are offered with a subscription, with or without on-demand streams,

A x B C 4. (1) Subject to subsection 0, the royalties payable by a licensee that operates

where (a) a non-interactive webcast service for audio tracks shall be 1.49% of their gross revenues attributable to the operation of that service, payable to CSI;

(b) a semi-interactive webcast service for audio tracks shall be 1.49% and 5.3% of their gross revenues attributable to the operation of that service, payable to CSI for 2011 through 2013 and to SOCAN for 2012 and 2013, respectively;

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(c) an interactive webcast service for audio tracks shall be 1.49% and 5.3% of their gross revenues attributable to the operation of that service, payable to CSI and SOCAN, respectively;

(d) a hybrid webcast service for audio tracks shall be 3.13% and 3.48% of their gross revenues attributable to the operation of that service, payable to CSI and SOCAN, respectively;

(A) (e) a permanent downloadis 5.64 per cent of the gross revenue from the service for audio tracks shall be 8.91% of the amountthe month, excluding amounts paid by end users for thepermanent downloads of audio tracks, payable to CSI;,

(f) a limited download service for audio tracks shall be 8.91% of the amount paid by subscribers for the service during the month, payable to CSI;

(g) a semi-interactive or interactive webcast service for music videos shall be 2.99% of their gross revenues attributable to the operation of that service, payable to SOCAN; and

(h) a permanent download service for music videos shall be 5.64% of the amount paid by end users for the downloads of music videos, multiplied by SODRAC’s share in those works payable to SODRAC.

(B) is the number of plays of files requiring a SODRAC licence during the month, and

(C) is the total number of plays of files during the month, subject to a minimum equal to the greater of 30.08¢ per subscriber; and 0.097¢ for each play of a file requiring a SODRAC licence. Where a service does not report to SODRAC the number of plays of files as limited downloads, (B) will be deemed to equal either (a) the number of plays of the same musical audiovisual work as an on-demand stream during the month, or (b) if the musical audiovisual work has not been played as an on-demand stream during the month, the average number of plays of all musical audiovisual works as on-demand streams during the month.

On-Demand Streams (3) Subject to paragraph (6)(b), the royalties payable in a month by a service that offers on-demand streams but does not offer limited downloads shall be

A x B C Minimum Royalties

(2) The royalties payable by a licensee pursuant to (a) paragraph 0 shall be no less than $100 per year, payable to CSI;

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(b) paragraph 0 shall be no less than $100 per year, payable to SOCAN, and $100 per year, payable to CSI;

(c) paragraph 0 shall be no less than $100 per year, payable to SOCAN, and $100 per year, payable to CSI;

(d) paragraph 0 shall be no less than $100 per year, payable to SOCAN, and $100 per year, payable to CSI;

(e) paragraph 5(2)(b)(A) shall be no less than $0.036 per downloaded file containing an audio track, if contained in a bundle containing 13 or more files containing audio tracks, or $0.066 per downloaded file containing an audio track otherwise, payable to CSI;

(f) paragraph 0 shall be no less than $100 per year, payable to CSI; (g) paragraph 0 shall be no less than $100 per year, payable to SOCAN; and (h) paragraph 0 shall be no less than $0.066 per music video containing only one musical work, and $0.026 per musical work in a music video containing two or more musical works, where both of these amounts are to be adjusted for the partial ownership of the musical works by SODRAC.

Mixed Bundleswhere (A) is 3.07 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads,

(B) is the number of plays of files requiring a SODRAC licence during the month, and

(C) is the number of plays of all files during the month, subject to a minimum equal to the greater of 16.37¢ per subscriber; and 0.054¢ for each play of a file requiring a SODRAC licence. For clarity, if the service permits an end user to copy files onto a local storage medium or device for later access, the service shall pay royalties pursuant to paragraph (2)(b), not pursuant to this subsection.

Free On-Demand Streams (4) Subject to paragraph (6)(a), the royalties payable for free on-demand streams shall be the lesser of 16.37¢ per unique visitor per month and 0.054¢ per free on-demand stream requiring a SODRAC licence received by that unique visitor in that month.

(5) Subject to paragraph (6)(a), where a service that is required to pay royalties under any of subsections (2) to (4) also offers permanent downloads, the royalty payable by the service for each permanent download requiring a SODRAC licence shall be 5.64 per cent of the amount paid by an end user for the download, subject to a minimum of 2.6¢ per musical work in a musical audiovisual work that contains 19 musical works or more, per permanent download, and 8.04¢ per permanent download in all other cases.

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Adjustments (6) Where SODRAC does not hold all the rights in a musical work, (a) (3) Forfor the purposes of paragraph 5(2)(b)(A), where an end user pays for a mixed bundle, the amount paid by the end user for the files containing audio tracks in the bundle shall be deemed to besubsection (1), paragraph (2)(a) and subsections (4) and (5), the applicable royalty shall be the relevant rate multiplied by SODRAC’s share in the musical work; and

(a) the price of the bundle, multiplied by the sum of the prices of the files containing audio tracks when not sold in a bundle, divided by the sum of the prices of all files in the bundle when not sold in a bundle; or

(b) when information required to calculate paragraph 0 is not available, the price of the bundle multiplied by the number of files containing audio tracks, divided by the sum of the number of files containing audio tracks and two times the number of files containing a music video.

(b) (4) Forfor the purposes of paragraph 0, where an end user pays for a mixed bundle, the amount paid by the end user for the files containing music videos in the bundle shall be deemed to be(2)(b) and subsection (3), only the share that SODRAC holds shall be included in (B).

(7) For the purpose of calculating the minimum payable pursuant to paragraph (2)(b) and subsection (3), the number of subscribers shall be determined as at the end of the month in respect of which the royalties are payable.

(a) the price of the bundle, multiplied by the price of the files containing the music videos when not sold in a bundle, divided by the sum of the prices of all files in the bundle when not sold in a bundle; or

(b) when information required to calculate the amount in paragraph 0 is not available, the price of the bundle, multiplied by two, divided by the sum of the number of files containing audio tracks and two times the number of files containing a music video.

Previews (5) Despite paragraphs 0 to (b), a person who operates, in association with the operation of a permanent download service for audio tracks, a service identified in those paragraphs only for the purpose of providing a preview of not more than 90 seconds of an audio track by webcast is not required to pay any royalties with respect to the operation of that service.

Taxes (8) (6) All royalties payable under this tariff are exclusive of any bank fees and any federal, provincial or other governmental taxes or levies of any kind.

ADMINISTRATIVE PROVISIONS Reporting Requirements: Service Identification

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6. 5. No later than the earlier of 20 days after the end of the first month during which a licensee, in connection with the operation of an online music service, communicates or reproduces a file requiring a SOCAN, CSI, or SODRAC licence under this tariff, or authorizes another person to do the same, and in any eventand the day before the service first makes thatsuch a file available to the public, the licenseewhichever comes first, the service shall provide to SOCAN, CSI, and SODRAC the following information:

(a) the name of the person who operates the service, including (i) if athe name of the corporation, its name and a mention of its jurisdiction of incorporation,

(ii) if a sole proprietorship, the name of the proprietor of an individual proprietorship, (iii) if a partnership, the name of each partner of a partnership, and or (iv) in any event, the names of the principal officers or operators of the service or any other service,

(iv) together with any other trade name under which the service carries on business; (b) the address of its principal place of business; (c) the name, address and email address of the persons to be contacted for the purposes of notice and, if different from that name, address and email, for the exchange of data and for the purposes of invoicing and payment of royalties, the provision of information pursuant to subsection 16(2) and any inquiries related thereto;

(d) the name of each online music service operated by the licensee; (d) (e) the name and address of any authorized distributor; and (e) (f) the Uniform Resource Locator (URL) of each Internet sitewebsite at or through which the service is or will be offered; and.

Sales Reports (g) all of the services identified in paragraphs 0 to 0 that the licensee operates. Music Use Report Definition 7. 6. (1) In this section, “required information” means, in respect of a file, where available (a) its identifier; (a) (b) the title of the musical work or works it containsaudiovisual work in the languages in which the service offers them and, if applicable, the title in the original language;