“It’s difficult to understand how SOCAN royalties are collected and split up”

Henderson & Co. is a boutique entertainment, media and trademark law firm located in Toronto. The company has been operating since 2000, and one of the founders is Kate Henderson, a lawyer and Registered Trademark Agent who took the time to share some of her thoughts with Milénio Stadium about the music industry. 

Henderson provides expert advice to artists, entrepreneurs and small to medium-sized businesses in this industry. During the COVID-19 pandemic the music industry was hit hard. Now that the Canadian population has achieved high vaccination rates, the recovering plan is underway.

A top international executive speaking to Music Business Worldwide magazine about what the pandemic did to the concert industry compares it to what the Internet has caused to the record industry. Henderson helps artists to navigate in this complex world of entertainment. The expert considers that it will take a while to recover from the last 18 months, but we can also expect more musical production offers. 

According to the tone of the latest web panel survey from Statistics Canada, Canadians have been spending more time online at home since the onset of the pandemic, and this has led to increased spending, usage of social media and messaging services and online streaming. More than four out of ten Canadians (44%) indicated that they had spent more online on technology, including computers, laptops and tablets, since the onset of the pandemic. This was also the case for smartphones (40%) and online video streaming services (42%). Young Canadians aged 15 to 34 (57%) were most likely to have increased their use of social media and messaging services, while seniors aged 65 and older (18%) were the least likely to have done so.

The debate around streaming it’s not new, but now with the big economic crisis, it could be the right time to analyze streaming income. Henderson believes that the financial compensation requires change to provide a fair playing field for artists.

Milénio Stadium: Why is it so difficult to have new songwriters and singers get a contract with a publisher?

Kaete Henderson: I think it may be hard to get a GOOD contract, with an advance and a reasonable delivery commitment, etc. But I think writers can get administrative publishing deals or run-of-the-mill publishing deals if they want them. It’s the same as always, in that there are many writers but few publishers. In particular, there are few publishers who will love a new writer so much that they are willing to spend money and commit resources to promote the writer thoughtfully.

MS: Do you agree that the pandemic is slowing the music business industry? Did you lose clients during the pandemic? 

KH: The pandemic certainly brought a full stop and huge losses to the live music industry. That’s going to be a while coming back, for sure, because even when venues re-open, audience numbers will likely still be limited for a while. That’s hard. So many people (not just musicians, but agents, tour crew, promoters, venues, the staff at the venues) rely on that industry. I think the rest of the industry, though, remained strong. Many of our clients took time to write and record new music. Labels were still signing artists and releasing tracks. I suspect, with people being at home a lot, maybe things like streaming and satellite radio consumption went up?

MS: Eight out of ten musicians make only $325 per year streaming their music. Do you think it’s fair, considering that they are using their intellectual property?

KH: The streaming income definitely is an area in which there needs to be some advocacy and change. This is now the primary way people listen to music. I think, first, the streaming services should probably be paying more for the use of the music (I don’t know enough about how that model works to provide specific insights). But, second, I know that money gets stuck at the label level. In my experience, labels often pay their artists the same percentage of streaming income that they would have paid for unit sales. So if the artist’s royalty is 18% of the dealer price of a hard copy of a CD/record, the label pays that same 18% of its net income on streaming. That’s too low, and it should change.

MS: Do the people in the music industry know their rights?  

KH: Often not. And in fairness, it can be very confusing. It’s difficult to understand how SOCAN (The Society of Composers, Authors and Music Publishers of Canada) royalties are collected and split up, and then throw neighbouring rights/SoundExchange and equivalents in there, and people can get very confused. There’s a lot of confusion about fair use (US) and fair dealing (Canada). I find many artists feel grateful to get any deal. Sometimes, there’s a perception that a manager or a label or a publisher is doing an artist/writer a favour by signing them, which can lead to bad deals and squandered rights. It’s always good to talk to a trusted industry person to get a sense of whether a deal is fair overall. 

MS: What is your opinion about Canadian copyright laws? 

KH: That’s a big question! In respect of the music industry, I think the copyright statutes we have work well for writers. The statute favours assumption of ownership for writers. If a writer assigns copyright (e.g., in a publishing deal), that assignment has to be in writing, signed by the writer, so there can be no “assumed” assignment of rights. I think the public performance royalty organizations do a relatively good job of administering music copyrights and paying musicians. 

Joana Leal/MS