The role of collective management

organisations and the importance

of good governance
Leonardo de Terlizzi
Legal advisor
CISAC

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Agenda

• Overview
• CISAC: who we are and what we do
• Our members
• Global royalty collections
• Role and importance of collective management
• For rightsholders
• For users
• Good governance
• Importance
• CISAC activities in this area

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1. OVERVIEW

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CISAC - who we are

• International Confederation of Societies of Authors and

Composers
• Founded in 1926
• Non-governmental, not-for-profit organisation
• The leading worldwide network of authors’ societies
• 239 societies
• 123 countries
• Over 4 million creators
• All artistic repertoires

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Repertoires managed by CISAC members

MUSIC DRAMA AUDIOVISUAL LITERATURE VISUAL ARTS

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CISAC – what we do

• Key goals:
• Promote the rights and protect the interests of
creators
• Promote and strengthen the system of collective
management of authors’ rights
• Support the network of collective management
organisations

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CISAC – what we do

• Main activities:
• Government relations and lobbying: Advocate for
favourable authors’ rights laws and policies
• Artist relations, building relationships between creative
community and policymakers
• Technical and legal support to our members
• Establishing and maintaining information networks to
support accurate collection and distribution of royalties
• Work on governance of members, to help ensure good
governance and efficient collection and distribution of
royalties

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CISAC - worldwide presence

Headquarters:
• Paris, France

Regional Offices:
• Hungary
• Burkina Faso
• Chile
• China

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Global collections – headline figure
Global collections 2015

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Global collections – by region
Global collections 2015

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Global collections – by repertoire

Global collections 2015

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Global collections – by type of use
Global collections 2015

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2. ROLE AND IMPORTANCE OF
COLLECTIVE MANAGEMENT

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Collective management
Copyright Basics

• In most countries, copyright laws have been adopted to

protect creators and creative works
• These laws allow creators to:
• Control the use of their works
• Receive an income derived from the use of their works
• Creators get specific rights with respect to their works:
• Moral rights
• Economic rights
• Only the creator can do the acts protected under the legal
rights or authorise others to do these acts (i.e. give a license
to another person): they are exclusive rights

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Collective management
Types of Authors’ Rights

• Moral rights:
• Paternity: claim authorship or maintain anonymity
• Integrity: object to derogatory treatment such as distortion,
mutilation or any other modification of the work
• Economic rights:
• Reproduction: make a sound recording of the work - copy
• Broadcasting/communication to the public
• Public performance
• Making available online
• Rental and lending
• Translation
• Adaptation

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Collective management
Authors’ societies - What Are They?

• Private organisations
• Formed by creators who share common interests
• Usually owned by the members and managed on
their behalf
• Usually run on a not-for-profit basis
• Some exceptions exist:
− For-profit entities
− State bodies
• Present in most countries

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Collective management
Authors’ societies - What Do They Do?

• Enter into agreement with copyright owners (usually of the

same category) to administer certain rights on their behalf
• The nature of these agreements differs by countries
assignment-mandate from the copyright owner
• Rights that the creator will prefer to have the society
administer
• Core functions:
• Negotiate tariffs, issue licenses, and collect royalties
• Monitor use
• Distribute collected royalties to its members
• Educational and cultural activities
• Enter into representation agreement with foreign societies
• Enforcement
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Collective management
Authors’ societies - music

• Authors represented:
• Composers, lyricists and music publishers
• Repertoire managed:
• All types of music
• Collecting royalties for:
• Radio, TV, cable
• Online services
• Commercial establishments that use music
(nightclubs, restaurants, bars, hotels, etc.)
• Mechanical rights licensing

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Collective Management
The benefit for Copyright Owners

• Provides a solution where granting individual licenses is impractical or

impossible
• Difficulties for individual creators:
• Identifying and contacting potential users
• Negotiating license fees
• Monitoring use
• Taking legal action against unauthorised use
• Collective management offers:
• Reduced administration costs - cheaper than negotiating with every
user
• Better negotiating position and greater bargaining power
• Other functions: educating users, public awareness campaigns,
lobbying and public activities, social and cultural functions

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Collective Management
The benefit for Users

• Provides a solution where obtaining individual licenses is impractical or

impossible
• Broadcasters, online services, operators of commercial
establishments where music is played in public - use a large number
of works
• Impossible for these users to contact rights holders and negotiate
separate licenses
• Easier and cheaper to obtain a broad license from on entity
• Collective management offers:
• One point of contact
• No need to negotiate with many individual rights owners
• Access to wide repertoire, through blanket licensing
• Saves costs of securing individual licenses

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Collective Management
The benefit to society at large

• Ensures legal access to the works

• Ensures that creators are remunerated for the use of their works
• Makes authors’ rights work in practice
• Fosters national creativity and cultural diversity by promoting local
creators and increasing their bargaining power
• Ensure the future of culture and creativity, and the prosperity of right
owners and commercial users
• Creative industries contribute to the economic wealth and the social
well-being of a nation
• Creative industries revenues represent 3% of the world’s GDP and
employ more people than the car industry of Europe, Japan and the USA
combined (29.5 million vs. 25 million)

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3. GOOD GOVERNANCE

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CISAC Membership criteria

• Art. 8 Statutes - A society will qualify as a member if it:

• Effectively ensures the advancement of creators’
interests
• Has at its disposal effective machinery for the collection
and distribution of royalties
• Assumes full responsibility for the administration of the
rights entrusted to it
• Carries out its activities for the common good of
creators and not for any specific segment or group of
creators
• Carries out its activities in accordance with the
Professional Rules

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CISAC Professional Rules:
Overview

• Professional Rules (together with Binding Resolutions) =

our code of conduct for societies
• Reflects our members’ long-standing commitment to the
highest standards of collective administration of rights:
− governance
− business activities
− financial management
− transparency and reporting
• Unique to CISAC

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CISAC Professional Rules:
Overarching Principles (Preamble)

• Ensure the advancement of creators’ interests

• Conduct operations with integrity, transparency and
efficiency
• Effectively collect and distribute income to creators,
publishers and sister societies on a fair and non-
discriminatory basis
• Encourage the lawful dissemination of works by facilitating
the licensing of rights in return for equitable payment

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CISAC Professional Rules:
Areas Covered

• Deal with issues including:

• Corporate governance • Licensing

• Membership • Collection
• Documentation • Distribution
• Complaints dispute resolution • Transparency

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CISAC Professional Rules

Corporate Governance

Transparency and Accountability

Licensing and Collections

Documentation

Distribution

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CISAC Professional Rules
Corporate Governance

• Rule 5
• – each CISAC member shall at all times:
− be open to creators & publishers of all nationalities
− permit a creator & publisher to terminate their membership
− maintain a fair balance between creators and publishers
• Purpose
− Non discrimination is a key element
− There should be equal treatment of
• Creators
• Publishers
• Sister societies
− Examples: voting power, distribution rules, deductions, frequency
of distributions…

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CISAC Professional Rules

Corporate Governance

Transparency and Accountability

Licensing and Collections

Documentation

Distribution

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CISAC Professional Rules
Transparency & Accountability

• Rules 7-12
A CISAC member must provide certain information to:
• CISAC
• online declaration stating that it has complied with all
applicable laws and regulations
• audited accounts
• annual report
• information on its Sister Societies and mandated territories
• Its Affiliates
• Annual report, licensing income, explanation of deductions,
explanation of distribution rules…
• Its Sister Societies
• Annual report, licensing income, explanation of deductions…

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CISAC Professional Rules

Corporate Governance

Transparency and Accountability

Licensing and Collections

Documentation

Distribution

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CISAC Professional Rules
Licensing & Collection

• Rules 15-16
A CISAC Member must:
− license only in accordance with scope of mandates
− use its reasonable endeavors to license all uses of its repertoire
− grant licences on the basis of objective criteria
− not unjustifiably discriminate between users
− promptly collect all income due under the licences which it issues
− take all appropriate steps to collect unpaid income

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CISAC Professional Rules

Corporate Governance

Transparency and Accountability

Licensing and Collections

Documentation

Distribution

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CISAC Professional Rules
Documentation

• Rule 17
Each CISAC member must shall, in accordance with the Binding
Resolutions, keep accurate and up to date documentation relating
to the scope of:
a) its repertoire;
b) the rights which it is mandated to administer
c) the territory in which it is mandated to administer

• Binding resolutions:
• dealing with documentation and distribution technical rules
• dealing with use of identifiers and industry standards
• defined by the community of CMOs
• Regularly updated

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CISAC Professional Rules

Corporate Governance

Transparency and Accountability

Licensing and Collections

Documentation

Distribution

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CISAC Professional Rules
Distribution

• Rule 18A
• Each Member shall:
a) base its distributions on actual usage of Works or, if not
practicable, on the basis of a statistically valid sample of actual
usage of Works;
b) apply the same level of diligence and fairness to all distributions
(…)
c) provide, and keep current, accurate documentation of its
distribution methods in the CISAC Distribution Methods
Database; and
d) distribute any Royalties due to its Sister Societies or to its
Affiliates in accordance with the Binding Resolutions.

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CISAC Professional Rules
Monitoring and Enforcement

• Declarations by members
• Compliance reviews
• By the CISAC Secretariat
• On a random basis
• And in addition: on the basis of identified priorities
• Procedure for hearing complaints from other societies
• Support from Secretariat in helping societies meet the rules
• Sanctions for non-compliance
• Possible expulsion from CISAC

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CISAC’s work on good goverance

• Increases efficiency of overall system

• Guarantees a professional approach to the management
of the creators rights among CISAC members
• Instill confidence between the society and:
• Sister Societies
• Affiliates - creators and publishers
• Users
• Governments and state agencies
• Reinforce the legitimacy of collective management of
rights

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THANK YOU
leonardo.de.terlizzi@cisac.org

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