Traditionally, in areas where there are many creators and users of copyrighted works, collective licensing bodies or collective management organisations (“CMOs”) have managed the copyrighted works for the creators. This is because it is impractical for a creator to negotiate and license the use of his or her works to numerous users individually.
It is similarly impractical for a user to negotiate and license the use of the works from numerous creators individually. For example, it is common for restaurants to play background music. It is not practical to expect a restaurant to approach the lyricists and composers of all the songs that it plays to negotiate for a licence and pay a fee to each of them individually.
For a collective rights management ecosystem to function well, CMOs would have to balance the interests of both creators and users and treat them fairly. The World Intellectual Property Organisation (WIPO) recognises that this is important for a vibrant, thriving copyright marketplace. The principles of transparency, accountability and good governance outlined by WIPO can form the foundation for how CMOs operate and enhance the collective rights management eco-system. However, in some instances, implementing these principles may result in higher cost of operation, which will be passed on to creators and/or users.
Despite the fact that consultation is over, the issues, proposed for consideration, are very interesting. Some of them are still topical not only for Singapore, but also for other countries.
The CMO should be able to provide information on the works it manages. This includes being able to identify the works, as well as the scope of the licence that it is authorised to grant. However, to do this, the CMO would have to expend effort to ensure that it has this information. Further, where a CMO has reciprocal arrangements to collect for other CMOs, it would have to depend on the other CMOs for such information. The additional cost to CMOs will ultimately be passed on to creators and/or users.
It is not productive for a user to need to go to multiple CMOs to obtain the necessary rights for their situation. CMOs should adapt to how works are being used and ensure that they have sufficient rights to meet the manner of use, so that users need only go to one CMO for the necessary licence. However, with different CMOs managing different rights and/or different territories, it will require significant coordination amongst CMOs, as well as with creators, to arrive at a true one-stop shop for users.
Ideally, users should be charged for the actual use they make of the specific works. However, this will require users to report actual usage and CMOs to collect such information from users. The additional cost to CMOs will ultimately be passed on to creators and/or users.
Ideally, creators should be paid for the actual use of their works. However, where sampling, estimations and proxies are used as a basis to determine royalty distribution, these should be clearly explained to creators. Ideally, this should be accepted by creators. However, imposing a burden on CMOs to collect usage information from users would likely increase CMOs’ operating costs, which would ultimately be passed on to creators and/or users.
CMOs should endeavour to keep their costs as low as possible, so as to maximise the distribution to creators. They should leverage technology to maximise efficiency. They should also make regular distributions to provide some income stability to creators.