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The Society of Authors, Composers and Publishers of Music (Sacem) is an organization created to protect the rights of—as its name suggests—authors, composers, and publishers. During the summer of 2022, several vacation rental owners received letters from the organization requesting that they pay royalties.
But why are short-term rentals subject to copyright royalties? Let’s look at the connection between these two fields, which at first glance seem to have nothing in common. When you rent out a property for a temporary period, it is important to know whether you need to pay Sacem fees.
What is Sacem?
Sacem is a private, non-profit organization whose primary purpose is to manage copyright royalties related to the commercial broadcast of music, in order to enhance the experience of the public in the space where the work is being played. Managing these rights involves collecting and then distributing these royalties, in the form of money, to the relevant authors, composers, and publishers. The medium of broadcast can vary: television, radio, CD player, etc.
Thus, royalties paid to Sacem are fees paid by third parties to legally use and broadcast music for commercial purposes. In practice, the most common example that helps clarify the context in which Sacem intervenes is nightclubs. DJs play music—in other words, protected musical works—to enhance the experience of the nightclub's customers. In this context, the music is broadcast for commercial purposes, so it is necessary to pay fees to Sacem.
Why are vacation rentals subject to copyright royalties?
It is easy to understand why royalties must be paid when works are broadcast during a concert or in a nightclub, but it is more complex to grasp the reasons for vacation rentals.
To understand Sacem's perspective on this issue, it is necessary to remember what a vacation rental consists of. These are premises made available to the public following a commercial transaction (the booking). In these accommodations used for commercial purposes, there may be equipment that allows for the broadcast of music: a television, a radio, a CD player, a speaker, etc.
Therefore, for Sacem, providing equipment that allows for the broadcast of protected musical works to the public in vacation rentals is done with the goal of:
- increasing profits related to the rental business. potentially increasing its appeal on booking platforms. making the travelers' stay more pleasant.
In this interpretation, the link between copyright royalties and vacation rentals is more understandable. It is through these arguments that Sacem justifies its request for short-term rental owners to pay for the broadcast of protected works via the equipment in their rentals.
What is the potential amount to pay as an owner according to Sacem?
In the letters received by some vacation rental owners, the organization called on them to pay an annual flat fee of 223.97 euros to be able to provide devices that allow for the broadcast of protected musical works in their vacation rentals.
This flat fee corresponds to the broadcast of works during 105 to 110 days of rental per year, or 2 euros per day. In the event of non-payment, following a "legal compliance" notice from the Court of Cassation, owners face a fine of up to 300,000 euros.
Legal gray area: can copyright royalties really apply to vacation rentals?
Even if Sacem's reasoning makes sense, owners and professionals in the vacation rental industry are still questioning whether this interpretation by Sacem is legally validated. Legal professionals have looked into the matter and have come up with elements that may call Sacem's reading into question.
Indeed, a specific case defined by the Court of Justice of the European Union (CJUE) dating back to 2020 challenges all parties in this debate. It concerns the specific case of renting a car equipped with a device that plays music (a radio). It was accepted that copyright royalties do not need to be paid in the context of a car rental. Thus, a parallel between a car rental and a vacation rental can be drawn. However, the specificity of the case presented requires jurisprudence for everyone.
Furthermore, in an article on this topic from the Service Public published on August 4, 2022, specific situations for the application of copyright royalties were clarified. It would seem that Sacem is entitled to request royalties if there is "forced sound reinforcement of a space receiving the public" or "reception of a signal retransmitted on a television in an accommodation."
Do vacation rentals fall into one of these categories? Can vacation rentals be considered rental cars? Or is Sacem's interpretation correct? All of this remains to be confirmed and established by the courts.
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