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Patrick Rogers, the president of Music Canada, expressed his disappointment with the recent announcement from the Canadian Radio-Television Telecommunications Commission regarding a new heavy tax to be levied on music streaming services. The commission stated that streaming platforms would be forced to donate 5% of their revenues to traditional media organizations in the country. Almost half of that money will go directly to bolster struggling radio stations.
“Canada’s broadcast regulator, the CRTC, announced that music streaming services will need to pay an unprecedented 5% of their Canadian revenues to support the legacy broadcasting system. Almost half of that money will be used to prop up traditional radio. If that sounds like outdated thinking, it’s because it is,” he said.
Major streaming services, not unsurprisingly, took the new tax lying down. Amazon, Apple, and Spotify too filed appeals against the CRTC’s ruling. Rogers is concerned that should the appeals fail, it could mean a reduction in investments in Canada’s music industry—or even an exodus. That was what happened in Uruguay, where Spotify threatened to leave before clarifications were made.
While Canada remains a considerable streaming haven, Rogers predicts the services will pass on additional costs directly to the subscribers. This could deter the fans from using the licensed platforms for streaming and thus negatively affect how artists are paid through plays. Time will tell if this antiquated solution the CRTC has foisted upon its regulatory failings effectively acquiesces to legacy media without damaging the emergent streaming economy. For now, Canada’s music tax has certainly lit a fire under a debate that already was quite heated.
