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

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Cross-border licensing of digital rights is a reality and a necessity. The MCPS (Mechanical-Copyright Protection Society) andPRS (coined the PRS Alliance) has already agreed with EMI Music Publishing and the German collecting society GEMA toclear the rights of EMI’s Anglo-American songs for online and mobile usage across Europe.Mobile service providers make extensive use of sound recordings in their offerings to consumers. PRS and MCPS collectroyalties for the mobile exploitation of music works, namely for the exploitation of performing rights (communication to thepublic) and mechanical reproduction rights. All rates for digital use are informed by the Joint Online Licence (JOL) confirmedby the Copyright Tribunal (CT84-90/05 of 19/07/2007). The rates were amended in 2009 to reflect market conditions. Therates for ringtones include 12% of gross revenue for real tone services or 15% for monopoly ringtone services or minimarates. This is a joint rate and it is based on the historical MCPS rate of 10%/10p minima and PRS rate of 5%/5p minima. Thereduction in rates for real tone services (i.e. those using actual sound recordings) was negotiated with major players in theindustry. For music services (i.e. full track music or music videos) the rates vary dependent on exploitation: On-Demand (10,5% GR or minima); On-Demand Subscription (8% GR or minima); Webcast (6,5% or minima); Webcast Subscription (5,75% or minima); Single Artist Webcast (10,5% GR or minima); Single Artist Webcast Subscription (8% GR or minima); Interactive Webcast (8,0% GR or minima) or Interactive Webcast Subscription (5,75% GR or minima); Interactive Webcast (8,0% GR or minima); and Interactive Webcast Subscription (5,75% GR or minima).Non-music or general entertainment services (i.e. Internet TV or VOD) are licensed by PRS under non-precedential triallicences prior to a substantive scheme being launched. These are negotiated with licensees under a Board-approved trialapproach. Simulcast of linear TV i-For music services (i.e. full track music or music videos), the rates once again varydependent on exploitation.PRS makes provision for annual increases of its tariffs. The inflation adjustment criteria are detailed in each tariff. The mostcommon method to calculate the annual increase is to use the mean (to the nearest whole percentage point) of thepercentages by which the Retail Prices Index and Average Weekly Earnings index (unadjusted) change in the year.7.3.3. CONSULTATION AND DISPUTESPRS has a voluntary consultation process detailed on its website.http://www.prsformusic.com/users/businessesandliveevents/musicforbusinesses/customerconsultation/Pages/Abouttariffconsultations.aspx.The tariffs are regulated by the Copyright Tribunal, which has the power to decide whether the terms and conditions of alicence are reasonable and whether someone has unreasonably been refused a licence. Users or their representativebodies, depending on the circumstances, can refer the terms and conditions of a licence to the Copyright Tribunal, which willadjudicate on the reasonableness thereof. Collecting societies have no corresponding right to make referrals to the Tribunal.- 158 -
This provision is intended to rectify the imbalance in power that can often be the case in the negotiations between powerfulmonopoly players and significantly smaller players.7.4. COLLECTION OF MUSIC ROYALTIESCollecting societies in the UK collect large sums every year. The Hargreaves Review (Independent Review of IP and Growthavailable at http://www.ipo.gov.uk/ipreview.htm) estimated that close to £1 billion is collected annually. A report byPricewaterhouseCoopers (Music Collecting Societies. Evolution or Regulation? Assessment of Recent Proposals on theReform and Regulation of Collective Rights Management in the Music Industry, June 2005 page 11) notes that:Revenues collected in the UK are high relative to income per capita and are also reflective of the relative size of the overall music marketin the United Kingdom. The high level of revenue collected in the UK is indicative of significant ‘depth’ of collection.Royalties are typically collected by PRS from users annually. However, where appropriate, PRS collects royalties on a morefrequent basis (biannually, quarterly or monthly or per event). Collection by PRS for UK Broadcast and Online is dependenton the online licensing scheme in question and it could be monthly or quarterly depending on revenues generated.PPL works closely with The Trading Standards Office to ensure licences are taken. Each provider of an Internet musicservice that falls within PPL’s remit, such as online radio, has a licence that covers the provision of the service to anyreceiving device, with no distinction drawn between desktop and mobile devices.Collection by PRS for UK Public Performance: UK collecting societies have a monitoring team who check both thecompleteness and accuracy of reporting. PRS only collects on behalf of its members. Virtually all composers, lyricists andmusic publishers in the UK have assigned their relevant public performance copyrights to the PRS, which thus has aneffective de facto monopoly on the grant of licences for copyright music in the UK. PRS derives its income principally from itslicensing activities. It deducts administration costs and then passes on royalties to its members in accordance with its ownrules of distribution. PRS has reciprocal arrangements with similar collecting societies in most countries.7.5. DISTRIBUTION OF ROYALTIESPRS derives its income principally from its licensing activities. It deducts administration costs. Article 48 of the PRS foundingdocuments permits certain deductions from the amount collected for distribution for pension and benevolent fund purposes.These amounts are set out in the PRS Report and Accounts made available to Professor Pistorius. The remainder of thefunds is then distributed to its members in accordance with its own rules of distribution. PRS has reciprocal arrangementswith similar collecting societies in most countries.In the 1995 MMC Report (Monopolies and Mergers Report) it was noted that the distribution to members should be improved.The Report noted that the collecting society must be clear about the distribution to members and the system must beconstantly benchmarked. It is important to note that Professor Frank Kelly of Cambridge University developed a complex setof algorithms for the determination of music use within an industry and an area. For example, the Cambridge University- 159 -
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TABLE OF CONTENTSLIST OF ABBREVIATI
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11.8 RECOMMENDATIONS ..............
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LIST OF TABLESTable 1: Cases of Non
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NORMOSPsPOSAPPLPPL (India)ProLitter
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These problems are addressed in the
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xxi.The report considers developmen
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1.3.8. Determine whether all money
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1.4.9. The CRC derived considerable
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2.3 SUBMISSION BY THE DEPARTMENT OF
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Aspects of Intellectual Property Ri
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(1) Subject to the provisions of th
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Copyright Tribunal or an arbitrator
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society, the South African Recordin
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3.2.14. With the liquidation of SAR
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the final rate or rates to be appli
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(a)that payment is to be made to th
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information as to their use to enab
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The WCT and WPPT oblige members to
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Once the handset technology changed
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4.3.16. In 2009, in what was coined
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4.4.6. In exchange for the above li
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operators are licensed by NORM to p
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5.2 FUNCTIONING OF COLLECTING SOCIE
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the grant of licences. Article 17 o
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6.1.3. The CRC’s assessment of th
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6.3.3. SAMPRA should be given one y
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Corporate Governance GapsKing II Re
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King IIIPrincipleKing IIIRequiremen
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King IIIPrincipleKing IIIRequiremen
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8 COLLECTION OF MUSIC ROYALTIES8.1
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8.1.4.2. Needletime royalties are n
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8.1.7.4. For the past five years, V
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PRS (UK)SPRE (FRANCE)SUISA(SWITZERL
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DetailsPerformance RightsSound Reco
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8.2.7 Comparative Study Performed b
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y a collecting society. A rights ho
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agency, its rights being derived fr
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Mr Robinson said DALRO assumed the
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10.1.6. The distribution to publish
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10.4.4. Most of the other collectin
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10.6.3.4. South African English-lis
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10.10 CONTRACTUAL RELATIONSHIPS BET
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10.12.2. The Regulations should rec
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licence that the licensee comply wi
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11.4.6. The details of ICASA’s ta
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RecommendationsTimelines for Recomm
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enterprises. There was a suggestion
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Copyright as it relates to copyrigh
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13.4 DEPARTMENT OF ARTS AND CULTURE
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Table 28: Comparative Study’s Key
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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about 30%, which is the highest amo
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15.1.3. The Copyright Tribunal’s
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15.1.20. Local music content requir
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for the selected artists. The outco
Page 114 and 115: King III Report by Institute of Dir
Page 116 and 117: Paranagua Pedro, “Strategies to I
Page 118 and 119: Copyright Amendment Act of 1984Copy
Page 120 and 121: APPENDIX 1(B): SUMMARY OF ORAL REPR
Page 122 and 123: Due to the fact that the existing c
Page 124 and 125: Mr BrottelProtection of copyright m
Page 126 and 127: 1.1.3. LIST OF ENTITIES VISITED AND
Page 128 and 129: In the 2009 Annual Report of ABRAMU
Page 130 and 131: The implementation of this law led
Page 132 and 133: ecordings. In respect of audio-visu
Page 134 and 135: In 1995, ECAD distributed 72% of it
Page 136 and 137: niches in the market to ensure fair
Page 138 and 139: Proprietary rights allow authors to
Page 140 and 141: International royalty distribution
Page 142 and 143: 3.2. Relevant LegislationsThe prese
Page 144 and 145: IPRS uses the standard tariffs in r
Page 146 and 147: Ad-hoc workshops on copyright are c
Page 148 and 149: meaningful living out of their crea
Page 150 and 151: 4.1.3. LICENSING AND LEGAL REGIMESI
Page 152 and 153: Ballet teachers; Teachers in the fi
Page 154 and 155: It was founded in 1928 by the Norwe
Page 156 and 157: 6.2. STRUCTURE OF COLLECTING SOCIET
Page 158 and 159: 6.5. COLLECTION OF MUSIC ROYALTIEST
Page 160 and 161: 1957, when the Managing Director of
Page 162 and 163: 16.4.14 SWISSPERFORM: CHF4 millionI
Page 166 and 167: algorithm could be used to determin
Page 168 and 169: Collecting societies in the UK all
Page 170 and 171: APPENDIX 3: RECOMMENDATIONS BY MITT
Page 172 and 173: 1.PREAMBLEThe Music Industry Task T
Page 174 and 175: The environment in which the music
Page 176 and 177: 3.1.3 IMPLEMENTATION AND ACCESSION
Page 178 and 179: In this regard, the Minister should
Page 180 and 181: 3.5.6 OMBUDSMANThe music industry s
Page 182 and 183: RECOMMENDATION 23:The MITT recommen
Page 184 and 185: The MITT further recommends that DA
Page 186 and 187: APPENDIX 4A: EXTRACTS FROM COPYRIGH
Page 188 and 189: (f)(g)doing, in relation to an adap
Page 190 and 191: (i)requiring notice of any intended
Page 192 and 193: (b)any organization claiming to be
Page 194 and 195: PERFORMERS’ PROTECTION ACTNO. 11
Page 196 and 197: the parties may agree to refer the
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Page 206 and 207: ANNEXURE 5: COPY OF SARRAL’S CONT
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Page 210 and 211: ANNEXURE 6: SARRAL’S AUDIT REPORT
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TERMS OF REFERENCESNO’SREQUIREMEN
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