Royalties for Music in Adult Entertainment

Summary#

This is Re:Sound Tariff 6.C (2019-2023), a royalty schedule published by the Copyright Board that sets fees for the use of recorded music accompanying adult entertainment in Canada. It requires establishments that play such recordings to pay a daily, per-person capacity fee for the years 2019, 2020, and 2021–2023.

What it does#

• Sets the way royalties are calculated for recorded music that accompanies adult entertainment: annual fee = daily rate × venue capacity.
• Daily rates are:
  • 2019: 2.70¢ per person per day
  • 2020: 3.88¢ per person per day
  • 2021–2023: 5.06¢ per person per day
• Requires estimated royalty payment and a report no later than January 31 each year, with a final reconciliation and report by January 31 of the following year.
• If an establishment opens after January 31, the first payment is due within 30 days of opening.
• Reporting must include the establishment’s name and address, operator contact, capacity with supporting documents, and days of operation.
• Establishments must keep records for six years and allow audits; if an audit shows royalties were understated by more than 10 per cent, the establishment must pay the audit costs and the shortfall within 30 days.
• Confidentiality rules allow sharing of information with Re:Sound’s agents, SOCAN, and the Copyright Board, among others, for collection, enforcement or distribution purposes.
• Late payments accrue interest daily at a rate equal to 1% above the Bank Rate (no compounding).
• Transitional rule: royalties owed on or before February 27, 2021 were due on May 31, 2021, adjusted by multiplying factors (2019: 1.00711; 2020: 1.00042).

Who's affected#

• Owners and operators of places where adult entertainment is performed, including adult entertainment clubs, nightclubs, dance clubs, bars, and hotels that use recorded music.
• Venue managers who handle billing, licensing, and record-keeping.
• Collective licensing organizations involved in music rights collection and distribution, such as Re:Sound and SOCAN.
• It may be unclear how this applies to venues that mix adult entertainment with other programming; the tariff targets performances that “accompany adult entertainment.”

Why it matters#

• Venues that use recorded music with adult entertainment now have a clear, capacity-based fee to pay. Larger venues will pay more because the fee multiplies by capacity.
• The daily-rate increases from 2019 to 2021–2023 can raise operating costs for affected establishments.
• The tariff creates ongoing paperwork and record-keeping obligations, plus the possibility of audits and added interest for late payments.
• These costs and administrative duties could affect pricing, staffing, or choices about whether to use recorded music at adult-entertainment events.