Audio Toyes #8 – What is SOCAN?
February 07, 2011
Along long time ago in a far off place there was a very creative individual who took some life experiences and turned them into a story with music. The individual recorded this new song and it became very popular. His local radio station was playing it daily and he had an arrangement with the station for payment because this song was providing the radio station with listeners and this allowed the radio station to sell advertising time on air. So it seems only fair, that this artist and the radio station split the revenue from this advertising income. The artists song grew in popularity and was picked up by another station. So the artist drove to the next town on his horse and buggy to arrange the same payment. Within a few more days hundreds of radio stations all over the continent started to play the artists song. Most of which the artist had previously been unaware had existed. Now they were using this individuals song and profiting from it, without sharing in these profits. This was not right. Many artists in the early days of radio found themselves in this position and were unable to handle the huge undertaking of contacting every station...and taking action if these stations did not pay up. This is around the time that songwriters from all over the continent got together and formed an alliance with one another. They called this alliance SOCAN:
Society of Composers, Authors and Music Publishers of Canada
Together, these artists could manage to collect data from their local radio stations about how much revenue was created from advertising and on how many times each artists song was played. Based on this information SOCAN decided how much each radio station should pay to SOCAN. SOCAN (run by the songwriters) then turn around and paid each individual who rightly deserved revenue from these stations. Now a system was in place to allow radio to use songs written by individuals they may not know but could pay them what was rightly theirs. SOCAN then expanded as more industry’s began to use music to sell goods. Retail outlets, live venues, theme parks and airlines were just a few added to the list of business's that paid SOCAN for the use of music. Now, as a member of SOCAN you will be paid your due share for any type of performance royalty (excluding usage in educational facilities or religious services). That is pretty much the basics of SOCAN and publishing for songwriters.
Do not confuse performance royalties with mechanical royalties. Mechanical royalties come from duplication of a specific product. An example. Tod designs a chair and gives you a license to make a whole bunch of them. You sell your chair for $10 a unit and Tod gets $1 from each unit. If someone else decides to make Tod’s chair design...you have no right to any profit from those chairs.
Its the same in the music industry. If Tod writes a song and licenses Brian Adams to record it. Brian Adams produces millions of copies and sells it for $10 a unit and gives Tod $1 per unit. If someone else comes along and records a new version of Tod’s song, Brian Adams does not have any right to the profits produced by this new recording. This is an example of mechanical royalties. As a songwriter you receive a certain percentage of revenue from someone selling a recording of your song. Each different recording of your song is owned independently by whoever paid for the recording time and session players on that recording (usually the record label).
Can be a little confusing but it really does make sense.