1. Fields of CRM, Legal Base of CMOs, Distribution Rules and Promotion of the Establishment of CMOs Victoriano Darias

2. Fields where Collective Management is Present  Music:  It is the field where collective management is more widespread, notably regarding copyright holders (authors and music publishers;  Collective management is the rule as regards musical works, although sometimes music publishers prefer to manage some rights directly (synchronisation rights, print music);  Collective management is less relevant regarding related rights (rights of performers and producers). It is employed for collecting amounts due for communication to the public. The bulk of income (album sales, interactive services (download, streaming), etc.) is managed by the record producer;  In some countries, performers and producers have joint societies (AT, BG, CZ, DK, FI, DE LV, LT, NL, SK, SL, UK).

3. Fields where Collective Management is Present  Audiovisual Works:  In the audiovisual field, individual management of rights is the rule. The producer is assigned the rights of all the rightholders and manages them directly;  Collective management is mostly applied on remuneration rights (authors, performers) or when it is compulsory (cable retransmission).

4. Fields where Collective Management is Present  Graphic and Plastic Arts:  Collective management takes mostly place as regards the resale right and public lending rights;  Some authors entrust the management of their exclusive rights to CMOs (e.g. reproductions for press clippings).  Literary Works:  The rule is individual management by the publisher;  But certain rights are managed collectively (communication to the public, public lending rights, reproduction for press clippings);  Reprographic rights (photocopies, etc.) are managed collectively.

5. Fields where Collective Management is Present  Private Copying Levies:  The right affects a wide variety of rightholders (authors, performers and producers of different fields, publishers, etc.);  Mandatory collective management;  In most countries there are specific intermediary collecting society for Private Copying Levies, which then distribute to the monies collected to the individual CMOs of every rightholder;  Sometimes this task is performed by the authors’ society on behalf of all the others (IT, HU, FI, DE, etc.);  In FR there are two intermediary collecting societies for private copying levies, one for music and one for audiovisual works and subject matter.

6. Legal Forms and Status of CMOs  No uniform approach:  Limited Liability Companies (PRS and PPL in the UK);  Subsidiary of other organizations (MCPS is a subsidiary of the Music Publishers Association in the UK);  Limited Liability Collective Companies (SABAM in BE);  Civil Societies with Variable Capital (SACEM in FR);  Not-for-profit associations (SGAE in ES, BUMA in NL, TEOSTO in FL, Artisjus in HU, ZAIKs in PL);  Foundations (STEMRA in NL);  Ad hoc legal forms (SIAE in IT (Economic Public Body of Associative Nature));  In some countries, they can have different legal forms. In Germany some CMOs are economic not-for-profit associations, while others are limited liability companies.

7. Legal Forms and Status of CMOs  The European Commission does not seem to have an issue with the legal form, but with efficiency;  2004 Communication on the Management of Copyright and Related Rights:  “Regarding their status, collecting societies may be corporate, charitable, for profit or not for profit entities.”  “[A]pparently, the efficiency of a collecting society is not linked to its legal form.”  “A collecting society may be duly constituted in the form it chooses or is required under national law, as long as it complies with the relevant national legislation pertaining to any such entity and provided the respective national law has no discriminatory effects.”  “This is subject to compliance with [EU competition rules] where a collecting society is constituted as a legal monopoly or where it is granted special rights under national law.”

8. Distribution Systems of CMOs in the EU  It is rare to find specific distribution rules in legal texts;  In some countries the Law establishes distribution keys regarding collection of private copying levies. In France, for example the following distribution keys are established:  Remuneration for private copying of sound recordings: 50% for the authors, 25% for the performing artists and 25% for the record producer;  Remuneration for private copying of audiovisual material: 33% for the authors, 33% for the artists and 33% for the producer.  Other provisions regarding the distribution of amounts collected tend to be of a more general nature.

9. Distribution Systems of CMOs in the EU  In Germany, the Law on the Administration of Copyright and Neighbouring Rights includes the following rules (Art. 7):  Obligation for CMOs to establish an explicit distribution key with clear rules on how, and according to which criteria the distribution is to take place;  The purpose of this provision is to exclude distribution at random and to provide for transparency;  The principles of the distribution key must be approved by rightholders through the CMO’s representative bodies and laid down in the CMOs statutes;  The Law also establishes that “culturally important” works and subject matter be promoted through the distribution keys;  Composers and performers of classical music and jazz obtain a proportionally higher share than pop musicians.

10. Distribution Systems of CMOs in the EU  Draft Directive on Collective Management of Copyright and Related Rights:  Obligation for the General Meeting (or the Supervisory Function) to establish the policy on the distribution of collected amounts, the use of non-distributed amounts and the rules on deductions (Art. 7.5);  Obligation of the CMO to regularly and diligently distribute and pay amounts due to all rightholders it represents (Art. 12.1);  Distribution and payments no later than 12 months from the end of the financial year in which the rights revenue was collected (unless objective reasons) (Art. 12.1);  Accurate distribution and payments, ensuring equal treatment of all categories of rightholders (Art. 12.1);

11. Distribution Systems of CMOs in the EU  If after five years the CMO is unable to distribute the due amount to a rightholder, and provided that it has taken all necessary measures to identify and locate the rightholders, the CMO may decide on the use of the amounts as established by its General Meeting, without prejudice to the right of the rightholder to claim such amounts from the CMO (Art. 12.2);  Access to other types of payments (sometimes called collective distribution) (social, cultural or educational services) funded through deductions from revenue must be based on fair criteria (Art. 11.1);  Access to these services must be granted even after termination of the relationship, although criteria may take into consideration the revenues generated by the rightholder and the length of the relationship (Art. 11.2);

12. Distribution Systems of CMOs in the EU  Regarding management of rights on behalf of other CMOs:  Regular, diligent and accurate distribution and payments of due amounts (Art. 14.2);  No discrimination on tariffs, management fees or conditions for the collection and distribution of revenues (Art. 13);  No deductions, other than management fees, unless other CMO expressly consents to such deductions (Art. 14.1).  Transparency rules both in regards for members of the CMO and sister CMOs (Arts. 16 and 17):  Revenue collected;  Amounts due per category of works and per type of use;  All deductions made;  Outstanding amounts for the period concerned.

13. Distribution Systems of CMOs in the EU  Regarding deductions for social, cultural or educational purposes (or the promotion of the legal digital offer in the Spanish case), note that they are established by law in many Member States;  Oftentimes these deductions are made to collection from private copying levies (e.g.: France 25%);  The Draft Directive seems to take no issue with legally required deductions as regards members of a CMO(Recital 16);  It is unclear whether this is the case as regards amounts collected on behalf of sister CMOs.

14. Distribution Systems of CMOs in the EU  CISAC has included some provisions on distribution in its Professional Rules:  Base distributions on actual usage of Works or, if not practicable, on the basis of a statistically valid sample of actual usage of Works;  Distribute any monies due to each Sister Society in accordance with the Binding Resolutions; and as soon as practicable after collection and in any event no less than once a year;  Apply the same level of diligence and fairness to all distributions, irrespective of whether such distributions are being made to its Affiliates or to its Sister Societies.  It also has a Distribution Technical Committee devoted to issues that arise around the distribution of the royalties collected by CISAC member societies. The DTC also manages the database on distribution methods of CISAC member societies.

15. Promotion of the Establishement of CMOs  The number of CMOs in the different EU Member States varies considerably:  In France, there are 27 CMOs (although this includes intermediary collecting societies and CMOs that are part of other CMOs);  In Spain, there are 8;  13 in Germany;  5 in Ireland;  There is therefore no uniformity in the number of CMOs that exist in EU Member States.

16. Promotion of the Establishement of CMOs  The Republic of Macedonia currently has two CMOs:  ZAMP Macedonia (music authors);  MMI (record producers).  There is room for the creation of CMOs in the following fields:  Performing artists in music (could be done jointly with record producers);  Artists in audiovisual material;  Audiovisual producers;  Authors of Graphic and Plastic Arts;  Literary Works (including reprography);  Private Copying Levies.  Note that for the most part the rights managed by these societies are rights that require mandatory collective management.

17. Promotion of the Establishement of CMOs  Historically, CMOs have been created at the initiative of rightholders themselves (usually prominent artists), occasionally after legal disputes over the recognition of rights (e.g.: SACD and SACEM in France, ASCAP in the US);  Sometimes they have initially been created by users (e.g. BMI in the US);  In order to promote the creation of new CMOs in the Republic of Macedonia, the public authorities may establish a dialogue with:  Unions or guilds of creators in the different fields (performing artists, film directors, script writers, actors, writers, etc.);  Prominent artists;  Trade associations (audiovisual producers, publishers, etc.);  Current CMOs (to create intermediary collecting society for private copying levies);  Foreign CMOs, to establish a subsidiary.

18. Promotion of the Establishement of CMOs  Find out potential obstacles for the creation of new CMOs:  Burdensome authorisation procedure;  Burdensome administration rules;  Bad precedents in efforts of enforcing rights by current CMOs;  Work out solutions to potential problems:  If holders of rights generating little revenue consider the administration rules too burdensome, consider:  Creating multi-repertoire societies or societies for performers and record producers (potential conflict with Art. 132(3));  Combine operations (e.g. Backoffice operations);  Seek out expertise from international umbrella organizations (e.g. CISAC).