Guest Post – Collective Rights Management in Nigeria: Unitary v Multiple Collecting Society Models by Olumide Mustapha (@lumes_bg)

music

The recent reports regarding the Concerned Copyright and Intellectual Property Owners’ (CCIPO) open letter to the Honourable Attorney-General of the Federation, Mohammed Adoke-Bello (SAN) (AG-Fed) is of tremendous import with regards to the development of the music industry in Nigeria. The letter contained a plea by the CCIPO for the AG-Fed to intervene on behalf of the former to compel the Nigerian Copyright Commission (NCC) to approve another collecting society for owners of music copyrights.

 

The matter centres around the issue of collective administration of musical copyrights in Nigeria. In particular, the issue of the collection of royalties and the monopoly of the Copyright Society of Nigeria (COSON) in this area, being the only body approved by the regulator, the NCC, to operate as a collecting society for music rights.

 

As it stands, COSON has both been very vocal and visible with respect to its fight against criminal copyright infringement as well as holding various organisations and industries liable in civil law for lack of payment of license fees. This is in addition to its public relations offensive and educational activities to promote the issue of copyright in the music industry. The organisation’s efforts over the last two years have been commendable and the amount of fees they have been collecting and distributing have reportedly been increasing year on year.

 

Where the organisation has been heavily criticised has been in relation to its royalty calculation and distribution formulae, and associated methods. Lack of transparency has also been a levied at the company in addition to the issue of its lack of adequate infrastructure for monitoring the uses of works by commercial users throughout the country.

 

Now, while I am in total agreement with the wide held view that competition is crucial to the development of any industry and economy, the area of collective rights management is unique and therefore requires a gradual process of development until it can be (fully) de-regulated.

 

The mere approval of another collecting society will not in itself ensure that more users will pay license fees for use of music in their respective businesses, nor that music owners will enjoy greater compensation for use of their works. The tendency of (over)- “fragmentation” that is prevalent in most spheres of Nigerian social and economic structures will likely be the result of this desire for ‘de-regulation’, resulting in more confusion, higher transaction costs and ending in less users paying license fees or using music.

 

What   is Collective   Rights   Management:   Pro-Monopoly   v Anti-Monopoly

 

Collective management of copyrights is a system in which owners of works authorize collective management organisations (“Collecting Societies”) to monitor the use of their works, negotiate with prospective users, issue licenses against appropriate remunerations, (usually on the basis of a tariff system), collect such remuneration and distribute it amongst the owners of the works.

 

The rationale for this system arises from the impracticability of managing these activities individually. The transaction costs involved for rights owners to individually administer the public performance rights, (for example), to their works would likely end up being more than the price of the license fee for the use of same.

 

Thus, third-party organisations represent the interests of a group of owners and these ‘collective rights’ organisations, (by virtue of their core activities), enjoy economies of scale when administering these rights on behalf of a large group of rights holders.

 

COSON has repeatedly argued that it is adequately protecting the interests of Nigerian music copyright owners, citing the many civil suits it has filed against various organisations and industries that use music in the course of their businesses. The anti-monopoly advocates, on the other hand, point to COSON’s lack of transparency and accountability, with particular regard to monitoring of works and royalty distribution amongst its members.

 

NCC: Collecting Society Approval Powers

 

Nigeria’s current legal framework with regards to the collective management of music rights (and its regulation) is contained in the Copyright Act Chapter C28, Laws of the Federation of Nigeria 2004 (the “Act”), and the Copyright (Collective Management Organisation) Regulation 2007. We operate what can be described as a unitary Collecting Society model with the flexibility to accommodate multiple societies, while having NCC as the overall regulator.

 

Based on our system, the NCC is not obliged to grant any other organisation a license to operate so long as it is of the opinion that COSON is adequately serving the interests of music copyright owners. Also, because the Act is silent on what would constitute the ‘adequate protection of interests’, it is presumably left to the NCC to decide upon.

 

Going Forward

The primary focus should be on issues surrounding the distribution methods of COSON as well as the adequacy of its infrastructure for the monitoring of the use of works. Audio recognition software as well as the use of ‘field operatives’ to gather accurate evidence of use of works by businesses, broadcasters and other commercial users should be the short to medium term aim. The accurate collation of music usage by licensees also serves the secondary purpose of providing a basis for a more equitable distribution of royalties and license fees amongst members. Commercial users are not mandated by law to keep playlists and logbooks so it is even more imperative for COSON to carry out these activities.

 

Both sides in the dispute must not lose focus of the ultimate goal; to wit, having a suitable administrative framework for music copyright administration in Nigeria, that would involve a simple and efficient method for users to obtain lawful   licenses   to   enjoy   creative   works,   whilst   ensuring   the   equitable distribution of fees and the rewarding of creators thereby stimulating further creativity and innovation. It seems both sides of the argument have this intention in mind and must therefore cooperate and engage in continuing dialogue to find some middle ground on which a consensus can be built.

 

Olumide Mustapha Esq (QSEW) is a Media and Entertainment Attorney. He can be reached by telephone on +234 810 421 55 00, or by email at lumimustapha@gmail.com. He also tweets from the handle @lumes_bg.

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To read further on COSON and its battles, disputes and progress, check out BON, COSON and MUSIC-SHUNs: 5 THINGS.

 

 

 

Aereo and the Disruption of Public Broadcasting

Aereo Logo

Startup and tech buffs love disruption, and for good reason too. Technology has intervened, over the course of human development, to change existing business models and sometimes make them obsolete. Usually, after some initial resistance, the market follows the disruption and old businesses either [try to] adapt, like Blockbuster or close shop and move on, like Kodak Film.

 

The US Supreme Court is about to rule on the legality of the attempt of a company named Aereo to disrupt conventional free-to-air television broadcasts. Aereo offers its users a service through which they can watch live TV online for a monthly subscription of $8-$12. The TV broadcasters, whose content Aereo offers, are upset because Aereo has not obtained licenses to rebroadcast their content and they are convinced that this is clear piracy. Their sentiment is underscored by the existing lucrative situation, where cable and satellite companies pay huge sums to TV broadcasters to retransmit/rebroadcast popular shows. This is where the impact of the disruption will be felt, should the Supreme Court rule Aereo’s business to be legal.

 

Aereo's Antennas. Photo Credit: Washington Post

Aereo’s Antennas. Photo Credit: Washington Post

The case turns on whether or not Aereo’s transmissions to subscribers are “public performances” or “private performances” of the TV broadcasts. If we revisit our Copyright 101 notes, we will remember that broadcasts are eligible for copyright protection and one of the implications of this is that the copyright holder has the exclusive right to control how they are transmitted/communicated to the public. What is the difference between public and private performances? Well, there isn’t a rigid distinction, but generally, private performances fall within the realm of family, home viewing, of a non-commercial nature. Anything outside that would probably be a public performance.

 

There is also a judicial precedent (i.e. a previous decision of the Court of Appeals) which will come into focus during the presentation of arguments at the Supreme Court; the Cablevision case. “Cablevision involved a cable company that held licenses to transmit live copyrighted programs, but also sought to offer subscribers an unlicensed service known as a “Remote Storage Digital Video Recorder” (RS-DVR).” [Quote is from the US Solicitor-General’s amicus brief (opposing Aereo) to the Supreme Court, in the Aereo matter. Full brief can be found here.]

Aereo AntennaAereo2

The RS-DVR allowed subscribers to record programs for later viewing, with the recordings stored in central servers housed and maintained by Cablevision. The courts ruled that the RS-DVR transmissions were private, rather than public performances, for various reasons, including that the transmission from the RS-DVR could only be received by one subscriber.

 

That factor, the capability of reception by a sole subscriber, is central to Aereo’s business model and legal arguments. The US Solicitor-General in fact suggested in his brief that Aereo engineered its business model around the Cablevision decision. So how does Aereo work?

 

Aereo has a central hub of “thousands of dime-sized antennas that are rented to individual users.” [See more in article from Time here.] The antennas capture live free-to-air TV signals, with each antenna serving no more than one subscriber at a time, depending on what program the subscriber chooses to watch. Aereo believes that a ruling that its business is piracy would have serious implications for cloud computing and would throw the Cablevision precedent out of the window. The District and appeal courts have agreed with Aereo so far. However, one of the judges at the Court of Appeals dissented.

 

According to the judge, Judge Denny Chin, in his dissenting opinion, [full judgement available here) Aereo’s technology platform is “a sham”. He says the system has been “over-engineered in an attempt to avoid the reach of the Copyright Act and take advantage of a perceived loophole in the law.” To my mind, he provides a great example of how the system is a sham. In spite of Aereo’s seemingly innocuous position that it provides users with a technology platform to make and access unique private recordings, Aereo’s antennas broadcast the Superbowl live (and simultaneously) to 50,000 users. It would indeed be curious for this not to be held to be public broadcasting.

 

The Judge goes further to distinguish Aereo’s case from Cablevision, with the key point that Cablevision involved a company that already paid license fees, while Aereo pays none. The subscribers in Cablevision already had the ability to view the recorded transmissions; Aereo’s do not. Aereo is functionally a cable company, doing what cable companies typically do, except for its attempt to avoid getting licenses to rebroadcast programming.

 

However, many legal scholars support Aereo, according to the previously referenced TIME piece. One such scholar is quoted as saying “Aereo simply provides an antennas for viewers to privately transmit free over-the-air broadcast television signals. It does nothing more than make it easier for viewers to access already free broadcast service.” But, I would counter, this (i.e. that the broadcasts are free-to-air) is irrelevant to the underlying intellectual property rights and what non-copyright holders have the power to do.

 

I am not an American qualified lawyer but I believe that Aereo’s business should be held illegal. It is clear that their thousands of dime-sized antennas, rather than a single large receiver, is a less-efficient way to structure the business. And, while taking advantages of loopholes in laws is legal and loopholes are in fact the bread and butter of many wealthy lawyers around the world, I agree with Judge Chin that there are enough differences between Aereo and Cablevision to hold that Cablevision does not apply here.

 

We watch and observe.