Why the future could be brighter for artists

Music Copyright Society of Kenya (MCSK) recently distributed royalties to musicians

In the past 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 artists have accused the Collecting Societies, also referred to as Collective Management Organisations (CMOs), of inefficiency and failing in their mandate. Others have accused them of corruption. Some members of the public have even wondered if these societies should exist; questioning whether they are legally recognised.

Some users of musical works have accused the organisations of harassment and application of outdated methods of collection of royalties.

This is, therefore, an attempt to answer some of these questions so as to assist Kenyans understand why the societies exist and why users of copyright works should comply by paying the set royalties.

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. Those rights must, therefore, be managed jointly or collectively, hence the name Collecting Societies.

These organisations are owned and managed by members who authorise them to manage their works in return for a share of the royalties collected. To enable efficient management of rights and offer easy access to artists’ work, the copyright laws provide for their establishment.

Collecting societies exist globally, having first been founded in late 1800s in Europe. In those countries, royalty payment compliance is very high and artists can enjoy decent life on royalties alone.

In Kenya, 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). And soon there might be a society to represent visual arts and producers of audio-visual works.

The Collecting Societies are private entities registered as companies limited by guarantee. They are licenced annually and regulated by Kenya Copyright Board (KECOBO). Their tariffs are published after a fairly rigorous process with public participation.

KECOBO, as the oversight regulatory agency, is well-placed to address the question of whether Collecting Societies are failing in their mandates or are corrupt.

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. Out the Sh80 million, 54 per cent went to PRISK, 24 per cent to KAMP and 13 per cent to MCSK.

Revenue leakages

This performance follows measures put in place by the regulator to ensure transparency in collection of royalties, including the joint invoicing and deposit in a common supervised account. The measures have partially sealed some loopholes that led to revenue leakages and cutting of unnecessary costs.

The anticipated passage of Copyright Amendment Bill 2017 will assist KECOBO to further stamp its authority in the management of Collecting Societies.

The collection methodologies are similar to those of other Collecting Societies globally. Tariffs are set and collected by, among others, taking measurement of business premises.

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, usually by design.

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 collecting 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 especially in a difficult economic environment.

Technology has the potential of providing the collecting societies with new tools and approaches for collection of royalties. KECOBO has been toying with methods of collection 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 licence 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, this can be implemented as soon as next year. Of course this will depend on whether other government agencies and ministries, especially the Treasury, approve the decision. If this is implemented, the amount of royalties payable to artists might increase while businesses would run smoothly. This system will finally deliver for artists an important campaign promise.

Mr Sigei is the Executive Director, Kenya Copyright Board. [email protected]