Paper presented as part of #NECLIVE 2014 Music Panel Discussion: ‘Slaying the Collective Rights Monster’

 

Music Lesson and Collective Administration

delivered by

Prof. Adebambo Adewopo 

Introduction

Ladies and gentlemen, permit me to thank the organizers of this conference especially Mr. Ayeni for inviting me to share my thoughts on the debate on the issue of collective administration, which have assumed notoriety in copyright law and administration in Nigeria. I have not been particularly keen on speaking on the issue outside my tranquil academic and practice domain but having found Mr. Ayeni most compelling, and armed with an ally in Mr Tunde Laoye, my partner in the firm L & A Legal Consultants, (a quiet achiever in this field of law, who unknown to many, master minded many achievements in the entertainment and media law practice). However, I decided to honor the invitation for two reasons. Firstly, in all of my career as an academic, practitioner and public administrator of IP, the dynamics of collective administration of copyright have never ceased to intrigue me, perhaps more than trade mark infringement or piracy, in a way that compels deep reflection on the subject as part of the expansive and eclectic landscape of intellectual property, the discipline of my consuming passion. Secondly, I have observed that recent development, despite the usual cacophony, has actually yielded some progress, pointing, ironically, to some measure of ‘melody’ or perhaps ‘harmony’ that lies beneath the medley of discordant tunes. Only a few issues have been more contentious in the copyright law and administration than collective administration. So permit me in the next 15 minutes in what I have titled Music Lessons And Collective Administration, to briefly reflect on the foundations and the dynamics of collective administration, in its epic past and engaging present, as as a way of drawing us to see the bigger picture of its future, perhaps as the theme suggests, we may find a way to ‘slay’ the ‘monster’ that it has become. That picture helps us to see not just the potential collection and distribution profile as part of the revenue streams arising from collective administration but more importantly as part of the effort to develop a sustainable collective administration system that generations of artistes can derive both pride and livelihood as part of the gains of the copyright system. That in retrospect, have always been my desire.

The truth of the matter is that a music composition (or even a movie script), actually begins its life under copyright law by the reward it guarantees in the ‘bundle of rights’, comprised in the ‘exclusive rights’, reserved for its creator, which adds fillip to any moral, psychological, cultural or spiritual satisfaction from creativity. Collective administration is one of copyright’s modern day invention for creators and artists to aggregate incentives from an increasingly expanding media for the exploitation at the lowest possible transaction cost. Of course from the user’s perspective, it facilitate access to license, reduces search and information cost incurred by users in the utilization of works.[1] I will not bore you with the rudiments of collective administration or collective management organization, its vehicle or agency, as I have already acknowledged the marked awareness and in good measure, the basic knowledge (as shown in Tuface’s presentation and that) of this august audience about the subject, including even the newest entrant into the Nigerian music scene.  To set the tone for my discourse, let me start from the lens or perspective of global historic narrative from which I wish to invite us to re-evaluate the Nigeria experience as this interesting enterprise called collective administration continues to evolve and unfold before us.

 

Historical Context: A Glimpse from the Past

Collective administration debate has always been intense and tenacious and so much has happened over many years, as it appears, without haven’t reached a full circle. Since the French SACEM[1], the first ever CMO founded in 1851, over a century and half history of collective administration, has been a significant yet controversial aspect of copyright and intellectual property across the world. At the dawn of the twentieth century, it was later the turn of the other early CMOs, particularly PRS in UK[2] and ASCAP in US, both in 1914 and other societies across Europe, including Germany, Italy, and spreading across Sweden, Norway, among other European entrants. Since then, CMO have been a permanent feature in the copyright architecture. Undoubtedly, CMO is one of copyright’s gift to the music world and one that has continually bequeathed music with its full apparatus of protection serving economic as well as the wider social and cultural functions. However, the evolution of collective administration has not been the exclusive preserve of the copyright domain alone, it has never been more legally, economically and politically significant and controversial than it is today.

I have said that, with a view to use two of the most pertinent features in the historical character of collective management to explain its tumultuous trajectory that was automatically implanted in its development in the Nigerian environment, like everywhere else. The first is that CMO, having emerged and established itself as a new culture both in the US and UK, did not immediately gain acceptance without contestation and eventual judicial affirmation. In the early stages of ASCAP, it took the US Supreme Court to affirm the performing rights of ASCAP members. Indeed ASCAP, like other CMOs, was born into controversy. It took the famous and often quoted words of Chief Justice Oliver Wendell to affirm the juridical stature of ASCAP as a performing right organization (PRO).

“ It is true that the music is not the sole object but neither is the food, which probably could be got cheaper elsewhere…if music did not pay, it would be given up. If it pays, it pays out of the public’s pocket. Whether it pays or not, the purpose of employing it is profit and that is enough.”[1]

That decision consolidated ASCAP’s position and emergence as Americas’ and the world’s largest performing rights society of authors, song writers and composers and the only one for that matter until SESAC and BMI were founded in 1931 and 1941 respectively.  That is a different story altogether. In succession, the Supreme Court again in another decision in 1923, which held that performances by radio broadcast required license from the copyright owner[2] further reinforced CMO as one of copyright’s most important structures. In the UK, PRS did not secure its first license, which was with BBC until 1923, ten years after its formation. Television broadcast license was not issued for the first time until 1937, over two decades after. Why? The conundrum or the ‘monster’ called CMO, the new continental invention of copyright, which took years of advocacy, controversy and revision of copyright law to firm take root within the copyright system. Decades beyond Europe and America, collecting societies as it was then called, like wild fire, continued, to ‘rock’ the copyright world across South America, Asia, Australia and more recently Africa in crises only different in their time frame and magnitude. An overview of the Nigerian experience in the last two decades or more reveal the perplexities and complexities inherent in collective administration and its conduct[3].

The second instructive point is that CMO is by its intrinsic nature a monopoly and have always been so, which nature has made it prone to controversy especially as it pertains to collection and distribution of money. And as we all know, everybody wants money and people gather every and any where there is money, one of man’s mortal friend. Particularly when combined with the vibrancy of the musical and artistic talents, in whose company there can never be a dull moment. The music lesson of collective administration teaches us to understand that we must never use the music we cannot pay for and in paying, we should realize that we are also paying for every entitled interests in that company. Ironically, its monopolistic nature is the historical narrative that is used to explain its compelling relevance as a building block in copyright administration. Apart from being a natural monopoly, it has, in many jurisdictions including Nigeria, become a legal monopoly, which is not the same thing as a natural monopoly, though both mutually exclusive, can subsist within the same framework. Natural monopoly paradigm has dominated the analysis of collective administration of performing right beyond question, with only a model response found in a regulated framework. Hence, under most copyright laws, CMO is regulated by competition or anti-trust law and relevant regulatory regimes, which provides the necessary safeguards against the abuse of its monopolistic nature or dominant position as the case may be. That is why in the absence of competition law in Nigeria, copyright Act has established a legal and regulatory framework for CMO, in particular reference to the Copyright (Collective Management Organization) Regulation 2007 issued pursuant to the enabling Copyright Act under which COSON was licensed as CMO in May 2010 after several decades of controversy and debate

The legal monopoly is implied in the provision that the Commission shall not approve another society in respect of any class of copyright owners if it is satisfied that an existing approved society adequately protects the interest of that class of copyright owners. The only condition for the departure from the existing legal monopoly is the invocation of that provision, which would require an empirical evidence rather than a mere opinion, for the exercise of regulatory discretion in that direction. It is instructive to note that the emergence of BMI in the US was predicated more on the failure of negotiation between ASCAP and its licensees than the perceived benefits of anti-trust or competition that was introduced to break ASCAP’s monopoly. As a matter of duty, COSON must never overlook the need to be seen, at all times, to demonstrate the highest level of responsibility, accountability and transparency in the conduct of licensing, collection and distribution in order to engender trust and goodwill of the music and larger industry, particularly as a a non-profit making entity by legal definition. Collective administration, after all, is a collective right, as the term suggests, not an exclusive right.

Present Context

Those two points I have attempted to underscore in the global history of CMO as the important narratives and imperatives of the Nigerian experience since the 80s when the debate started. I have briefly delved into that history to establish my first point of reference that the controversy and the crises that has attended collective administration especially in music area in Nigeria are not unusual, uncommon or without precedence as experienced in its formative years across the copyright world: except that each country adds its own peculiar socio-cultural and environmental flavor within the time frame it took to evolve. From the 80s and the 90s, it is high time collective administration stabilized and began to fulfill the objectives for which the legal framework was introduced in the copyright law in Nigeria.

I will quickly proceed to proffer what I call the two imperatives for stability of collective administration or for slaying the collective right monster as it were (using the organizer’s own term) within the framework of licensing, collection and distribution, the three pillars on which a CMO is known to function:

1. First is the strict observance of extant copyright laws and regulation under which CMO functions, and not the rule of men or ego or undue sensationalism that has reigned for so long. That observance should be supported by best practice on which the conduct of collective administration ought to be built.
2. The second is the recognition of the peculiar socio-economic conditions existing in Nigeria, which conditions are relevant in the interpretation and enforcement of the law and the development of industry and customary practices in accordance with the law.

Both injunctions involve the human element of building a culture of trust, accountability and transparency in the conduct of collective administration. This is because of some of the uncertainties in the framework of collective administration that should be allowed to hinder its smooth operation. An illustration of that point is on the issue of representation. As a matter of law, there is no principle or proposition existing anywhere under Nigerian law or legal system that permits any entity or agency relationship or private treaty to appropriate or administer rights, duties, privileges or liability that is not duly, legally or contractually vested on it. In effect, no CMO in Nigeria has the legal or constitutional right or authority to administer copyright in any work not assigned or licensed to it by the original author or creator of such work. To argue otherwise is not only inconsistent with the spirit and intendment of extant copyright law and regulation but also would be alien to existing Nigerian law and jurisprudence. The so-called customary obligation of CMOs to represent the interest of non-members is not the same as the mandatory legal authority to license their works or collect royalty on their behalf without express or voluntary authorization that is required by law. That thinking may have been influenced first by the Continental culture, and then reflected in the PRS orientation allowed or permissible under English unwritten constitutional model, which cannot be transplanted into Nigerian legal system without regard to our constitutional system whereas a sharp contrast obtains in the US with its relatively closed membership model[1]. To perpetrate the English practice in Nigeria would be a distortion and a travesty of our law and would be most ludicrous. The conception of our jurisprudence and the intendment of the copyright law and regulation does not support collective administration or management of rights or aggregation of proprietary rights by whatever name it is called, without express authorization of rights in the work. The assignment of the works, which forms the repertoire of the organization is the basis of the authorization to administer or manage the rights in the works, once it is licensed to operate as such. That is the foundation on which our written constitution and jurisprudence is built. That is why the acquisition of repertoire and membership rather than a bare body, even if it is licensed, is crucial to the existence of any CMO. It is the life-blood on which it runs and without which it becomes naked, barren and lifeless. Its licensing activities are predicated on the acquisition of repertoire, which it is authorized by two instruments, first, the instrument of approval to operate as CMO and then, the assignment or contract by which it acquire the right to administer its repertoire on behalf of its members.

Future Context

At this juncture, it is instructive for me to say that collective administration in Nigeria by any stretch of imagination have come a very long way and gradually evolving. The foundation is gradually developing particularly with the recent focus on negotiation of tariff as the crucial part of licensing activities. Attempting to predict the future is often a notoriously hazardous task, especially in a constantly changing terrain as copyright administration, but collective administration itself is going to face one of its toughest challenge not just with the Nigerian situation with its own dynamics but with the rapid technological advancement that has confronted copyright system itself; a development that has precariously and radically transformed and compelled the theatre and nature of exploitation of creative works including music beyond the collective to answer to the demands of the digital in a manner that may eventually render the collective painfully obsolete in favor of individual control and administration, the original domain conceived by copyright. In retrospect, that challenge has the effect of questioning the original conception of collective administration as serving the primary economic function of reducing transaction cost for administering creative works as against individual administration. Today’s digital world continues to raise the question of a possibly more efficient and effective co-ordination and near zero transaction cost for individual management offered by digital rights management (DRM) than collective management would offer, despite considerable investment by CMOs in digital rights management.[1] The survival of collective management will depend largely on its own response to both the digital and industry dynamics in which it operates. The latter is comprised in the negotiation of its own interest with the interest of its large industry of users across different sectors, particularly the broadcasting and media, cinema, hotel and other commercial entities.  Let me quickly add here before I make my final statement, that the experience in the music sector should serve as an important lesson for the film sector in forming their CMO as I am aware that they are already making arrangements in that direction, which I believe is long overdue for the administration of the rights of film producers and directors of Nollywood as well as audio-visual performers alike who, in the light of the newly adopted WIPO Beijing Treaty of 2012, have now been accorded global protection for the first time in the history of international copyright law.[2] In that undertaking, consultation, co-operation and consensus, are the key strategies in adopting a suitable model that takes into cognizance the complex interplay of vested interests with associated rights existing among industry players and stakeholders. Emphasizing inclusion rather than exclusion is an important part of the industry dynamics that will determine the future of collective administration in any of the relevant copyright industry that wishes to maintain a sustainable collective administration machinery this country.

Finally, the Nigerian environment is not completely without progress compared with the past debacle, particularly the stalemate of the last decade. The current dispensation under which tariff is been debated, contested and negotiated towards eventual resolution demonstrates one of the remarkable development in the epoch of collective administration. We should, however, emphasize that the paramount rule is that tariff must be fair, reasonable and non-discriminatory subject to negotiation inter partes, and if need be arbitration and adjudication, and which in my humble view does not call for alarm. With the current momentum of awareness and engagement, what is crucial is that it is no longer fashionable neither is it acceptable for no remuneration to be paid for the exploitation of music or any other intellectual property rights for that matter in today’s Nigeria, particularly against the currency of the knowledge-driven global economy in which Nigeria is not just a producer but a net exporter, at least in our present context, as far as music and entertainment is concerned. This is the lesson of collective administration that teaches us how to play and probably what music to play because you must pay for what you play.

 

* Paper delivered at the Nigerian Entertainment Conference held at Eko Hotel Lagos 23rd April 2014

* Adebambo Adewopo is Professor of Law, Nigerian Institute of Advanced Legal Studies.

 

 

References:

[1] See generally Herinan C Jehoram, Basic Principles of Copyright Organizations, 26 Copyright 214, 215 (1990), Ulrich Uchtenhagen, Copyright Collective Management in Music, WIPO, Geneva, Paula Schpens, Guide To the Collective Administration of Authors’s Right, UNESCO, 2000, Adebambo Adewopo, Nigerian Copyright System Principles and Perspectives, Odade Publishing, Lagos, 2012.

[2]  Societe des Auteurs Compositeurs et Editors de Musique. 1851

[3] There was Mecolico (Mechanical Copyright License Company formed in 1910 preparatory to the passing of the English Copyright Act 1911 which protected musical works for the first time in English copyright history. Mecolico later merged with CPS (Copyright Protection Society) in 1924 to form the MCPS (Mechanical-Copyright Society).

[4] Herbert v. Shanley 24242 U. S 591 (1917).

[5] M. Witmark & Sons v. L. Bamberger & Co. 291 F. 776 D. N. J 1923

[6] See Adebambo Adewopo, Collective Administration in Nigeria, in Nigerian Copyright System Principles and Perspectives, Odade Publishing, Lagos, 2012, Chapter 3, 80-115.

[7] On the contrary in the US, CMO deliberately limits its membership. While some countries impose open membership requirement, others do not. ASCAP’s closed membership led to the formation of BMI, the second CMO with which the admitted composers and song writers negotiated license with the broadcasters. See Sigmund Timberg, The Anti-Trust Aspects of Merchandising Modern Music: The ASCAP Consent Judgment of 1950, 19 L & Contemp. Probs. 294, 312-13 (1954). In the Scandinavia, under the Extended Collective License (ECL), a CMO is required to represent the interest of non-members only where it reaches a certain size. In Norway, many composers in TONO, the well established society left to form their own new CMO.

[8] Ariel Katz, The Potential Demise of Another Natural Monopoly: New Technologies and the Administration of Performing Rights Journal of Competition L. & Economics 2(2) 245-284.

[9] Treaty for the Protection of Audio Visual Performers adopted at the WIPO Diplomatic Conference of member states in Beijing, China on 25 June 2012.