SOCAN Tariff for Adult Entertainment Clubs

Summary#

This is a notice from the Copyright Board setting the fee rules called SOCAN Tariff 3.C – Adult Entertainment Clubs (2023-2025). It requires adult entertainment clubs that use recorded music to pay 5.50¢ per day for each person the venue is allowed to hold, for the years 2023 to 2025, with reporting and possible audits.

What it does#

• Sets the royalty rate at 5.50¢ per day multiplied by the venue’s authorized capacity (seating and standing) as shown on its liquor licence or a similar official document.
• Covers the playing of recorded music in adult entertainment clubs during 2023 to 2025.
• Defines a “day” as the period from 6:00 a.m. one day to 6:00 a.m. the next day.
• Requires clubs to file an estimated-payment report and send the estimated royalty to SOCAN no later than January 31 of the year covered by the tariff.
• Requires a final report, showing authorized capacity and the number of days the club operated as an adult entertainment club, to be filed with SOCAN no later than January 31 of the following year; royalties are then adjusted up or down.
• Allows SOCAN to audit a club’s books on reasonable notice; a club may choose an independent auditor from a list provided by SOCAN. If an audit shows underpayment by more than 10%, the club must pay the auditor’s fees.
• States that all amounts are exclusive of taxes and that late amounts accrue interest daily at 1% above the Bank Rate published by the Bank of Canada (interest does not compound).

Who's affected#

• Owners and operators of adult entertainment clubs in Canada that play recorded music.
• Venues whose capacity is set by a liquor licence or another official capacity document.
• SOCAN (the music rights society) and music creators, who receive the collected royalties.
• It is not clear from the notice whether clubs that use only live music are covered; the tariff specifically targets recorded music.

Why it matters#

• Clubs will need to track the number of days they operate and the authorized capacity shown on their licence to calculate and report fees.
• The fee is charged per person capacity per day, so larger venues pay more; that could affect operating costs for some clubs.
• The rules include audits and interest for late payments, so accurate reporting matters.
• The tariff is a way for music creators to be paid when their recorded music is played in these venues.