Copyright Review Commission Report - ICT Law and Regulation ...

There is healthy competition among associations as members are free to join any society or to move from one association toanother as long as they inform the society they are leaving. This competition provides incentives for associations to provide abetter service. Newly developed software gives instant and consistent feedback to ECAD as well as to member associationsand members. Although there are no limits on the establishments of new associations, small associations are not sustainabledue to the technological infrastructure required to run an association successfully (Gustav Gonsalez, interview, ABRAMUS,May, 2011).The lack of competition among associations on tariff setting has led some critics to accuse ECAD of abusing its monopoly.On the matter of fraud, there have been allegations, defences and counter allegations. Recently, allegations of fraud withinECAD have led to a parliamentary enquiry. In its defence, ECAD responded by putting out a public statement on its websitethat ECAD is no different from any other organisation where individuals sometimes transgress. However, it is claimed thatwhenever a single act of fraud is detected, it is politically exploited by ECAD’s critics and large user corporations, such ascable television. (http://respostadoecad.ecad.org.br 2011/06/11)1.6. COLLECTION OF ROYALTIESTypes of agreements between collecting societies and users: There are no blanket licences given and royalties are onlycollected for the works of members according to information given by users. There are no differences between the privateand public broadcasters’ obligation to pay royalties, rather different tariffs are charged. Collection from all the users is donecentrally by ECAD. ECAD collects on the behalf of the associations and provides the mechanism for representatives ofdifferent associations to reach consensus and make collective decisions. ECAD collects only for members of CollectiveManagement Societies and for members of foreign societies with whom local associations have agreements. There is thusno issue of non-members’ royalties.The amount collected has increased on an annual basis by more than 10% since the 1990s. In 1996, the collections of ECADrose by 14% to $68 million. Payments from television stations accounted for 21% of the total, and radio stations for 14%.General use payments represented 24% of the total. Payments from the cinema sector was only 0,3%. Over the years,ECAD has become more efficient, increasing rates of collection from users and distribution to associations, directly benefitingcomposers, performers, musicians, record labels and music publishers. Collections in 2006 of R$268 368 828,00 increasedin 2007 to R$302 206 444, which increased in 2008 to R$332 298 825,06, which, in turn increased to R$374 255 580 in 2009and R$432 953 853 in 2010. In four years, the revenue of ECAD increased 38%.Royalties are collected at different times from different users and distributed to the associations on a monthly basis to ensurea regular income for rights owners.Use of cue sheets by some or all users and the alternatives: Where manual cue sheets are used, the data is processedelectronically by the associations. This applies to domestic as well as international data. Associations maintain a goodelectronic database. The accuracy of music usage information is ensured through an auditing process. ECAD and theassociations are in an ongoing process of developing better software to measure usage directly. Composers, publishers,performers and recording companies are beneficiaries of royalties collected for the performance and reproduction of sound- 125 -