From the horse’s mouth: Where royalty truth lies

In the last few weeks there has been a raging debate about the entire system of royalty management since the music collecting societies - Kenya Association of Music Producers (KAMP), Performers Rights Society Kenya (PRISK) and Music Copyright Society of Kenya (MCSK) - distributed their royalties.

Some artistes accused the collecting societies, otherwise also referred to as collective management organisations (CMOs), of inefficiency while others alleged that they were corrupt.

Some members of the public wondered if they should exist at all, questioning the basis of their existence in law.

Some users accused the organisations of harassment and application of outdated methods of collection. Others doubted if they paid their members or rendered accounts.

The reason for the existence of collecting societies is that whereas majority of the rights available under copyright are managed by individual or corporate rights holders, there are some rights that cannot be managed individually for practical reasons.

EFFICIENCY

Those rights must, therefore, be managed jointly or collectively, hence the name collecting societies or collective management organisations.

They are managed by members who authorise them to manage their works in return for a share of the payment of royalties collected.

To enable efficient management of rights and offer easy access to artists’ work, the copyright laws of Kenya provide for their establishment.

Currently, we have collecting societies for music authors (MCSK), producers (KAMP) and performers (PRISK).

Actors are also represented by PRISK while publishing or reprography is represented by Reproduction Rights Society of Kenya (KOPIKEN).

Collecting societies are private entities registered as companies limited by guarantee.

TRANSPARENCY

They are licensed annually and regulated by the Kenya Copyright Board (Kecobo). Having been licensed, their tariffs are published after a fairly rigorous process with public participation.

As far as the recent distribution is concerned, the societies collected Sh118 million and distributed Sh80 million, representing 68 per cent of the collections.

As such, they performed extremely well with the distribution nearly matching the obligatory 70 per cent compared to 54 per cent; 24 per cent; 13 per cent for PRISK, KAMP and MCSK respectively for last year.

This performance follows measures put in place by the regulator to ensure transparency in collection including the joint invoicing and deposit in a common supervised account.

The measures have partially sealed some loopholes that led to revenue leakages and cut unnecessary costs.

PAYMENT COLLECTION

The anticipated passage of the Copyright Amendment Bill, 2017 will assist Kecobo to further stamp its authority on the management of these societies.

As far as collection methodologies are concerned, these are similar to those of other collecting societies globally.

Tariffs are set and collected by amongst others, taking measurement of the premises, counting seating capacity and considering number of items that play music.

The societies’ staff visit to collect payments. The process of assessment of premises is perilous to the staff of the societies and is considered a nuisance by some users.

As a result, compliance by users is very poor in all sectors. This partly explains the amount distributed by MCSK and other societies.

COMPLIANCE

Users have complained about the tariffs stating they are quite high and proposing their own procedures for determination of tariffs.

The suggestions have not received traction with collecting societies as they are afraid of losing royalty income. The impasse often leads to unnecessary litigation.

The historically poor compliance places a heavy burden on the few that the collecting societies can reach to make up for the rest who fall through the net.

This thereby creates an endless cycle. Sadly, those who have not complied were the loudest critics about the poor pay to artists.

The poor compliance represents a big threat to artists’ rights as it puts into question the future of these organisations.

The societies must adapt to local and technological realities.

The payment of copyright dues is clearly a new concept to many business owners who use copyright works. It is hard for them to understand and comply.

TECHNOLOGY

Technology has the potential of providing the collecting societies with new tools and approaches to collection of royalties.

Kecobo has been toying with methods of collections that do not involve direct contact with the users and the use of police in enforcement.

These include imposing a music levy on food and hotel establishments to be collected in the same manner as catering levy; music levy on alcoholic beverages; a subscription model for media houses that pays for every song played and a flat royalty at NTSA license desk.

Universities can collect a nominal fee for the photocopies done in the campuses in favour of book authors’ royalty. Any shortfall can be made up from flat rate collections.

Subject to an impact study and the setting of appropriate fees on those platforms, the implementation can be as soon as next year.

Of course the realisation will depend on other government agencies and ministries, especially the Treasury approving.

If this is implemented, there is reason to believe that the amount of royalties payable to artists can consistently grow while businesses can run smoothly. This system will finally deliver for artists an important campaign promise.

Mr Sigei is the executive director, Kenya Copyright Board