What’s a collection society & why do we have them?
If you are in the music world, you really need to know that the owners of the copyright in songs and sound recordings are entitled to be paid royalties for when their works (songs) are used in various ways and in various places.
Collection of royalties for when works are used is generally done by collection societies. They collect royalties on behalf of their members who are artists, writers or musicians. Collection societies also act in the administration of the rights of copyright owners.
Collection societies are also very much about issuing licenses to companies/businesses who use copyright music as part of their activities. This is a very important part of their service. This collecting model goes way back to the 1800s when it was realised that owners of copyrights and creative works were entitled to be paid for any performances of their works. The owner of the copyright could not physically call on everybody that performed their works, so a system for collection was developed.
To understand the need for collection societies, let’s think about these things:
- Creators of artistic works are entitled to be paid for when their works are used, and in return, third party users, (anyone who wants to use the works of creators) must pay for the right and privilege of using these creative works.
- If the songwriters, music publishers and record companies had to negotiate every individual contract with every venue that played music or where music was performed (every coffee shop, radio station, television network, gymnasium, concert hall, shopping mall, etc) to use their copyrights, then the licensing system would just not happen. No-one would win, no-one would have their works used and no-one would get paid (!).
- If radio had to identify the owners of each song they played and negotiate every individual contract well … you get the idea – nothing would happen. There would be no commercial realisation in using other people’s songs. Songwriters’ songs wouldn’t get played, and radio stations wouldn’t be allowed to play music without a system in place.
- Copyright owners assign their ‘performance’ rights to a collection society to administer and collect on their behalf.
So, collection societies make it easier for third-party users to find the owners of works and in turn, creators are able to be paid for the uses. Sound simple enough, doesn’t it?…
Really, collective rights administration is the most effective way of managing rights use for both the original creator of the works and more importantly; assisting with commercial use of those rights by third parties (those organisations who are seeking permission to use original works). They can provide the infrastructure for the location of owners of original works, as well as act as the go-between when it comes to contracts and negotiation of terms and fees.
Collection Societies can provide the following:
- systems needed for the collection of royalties generated by copyright users
- identify copyright owners to potential copyright users
- the infrastructure for licensing of copyrights to other copyright users
- economic and efficient systems to promote the use of copyright material, making it accessible and streamlined
Let’s look at some of the key collection societies, shall we?
Key Collection Societies
Firstly, APRA is the Australasian Performing Right Association.
Remember that copyright owners have a variety of rights that they hold. One of those rights is the right to communicate or broadcast their copyrights (works) to the public. When musical works are communicated to the public (be it via the mediums of TV, radio or streaming, etc) a royalty is payable to the songwriter for that use. TV and radio stations have to pay license fees for the rights to play music/songs to the public part of their businesses. This is known as a broadcast ‘right’.
The licence fees for the use of musical works by radio, TV, etc, are determined and collected by APRA.
So really – APRA’s members are songwriters, who are the first owners of the copyright in songs.
APRA’s members register their songs with APRA, the songwriter/s assign a portion of the work over to APRA and APRA then collects royalties for public performance on the songwriter’s behalf.
APRA’s clients are third-party users of music (venues, radio stations and networks, TV stations, concert promoters, internet users, gymnasiums, coffee shops, hairdressing salons, etc), the list goes on and on.
What about collection societies and live performances?
Every time a musician or band performs live (and providing they are members of APRA) they will return a ‘Live Performance Return’ (LPR) to APRA. APRA will distribute the royalties to the songwriters whose works are being performed live. APRA collects the licence fees they have issued from venues who have live performances. These license fees are collected and combined into what’s called the distribution pool. APRA then allocates the royalties from that distribution pool to the songwriters whose works (songs) have been used in licensed venues, using the information supplied from the LPR’s.
The right to reproduce the work in a material form (meaning having a song recorded and manufactured) and communicate that recording to the public, gives rise to a payment known as the ‘mechanical royalty’. These royalties are collected by AMCOS; the Australian Mechanical Copyright Owners Association. AMCOS was established by Australian publishers to administer the collection and distribution of the mechanical copyrights and fees. Most composers and lyricists assign the mechanical copyright in their music to a music publisher prior to the commercial release of a sound recording of their music.
AMCOS collects and distributes mechanical royalties for the reproduction of its members’ musical works for heaps of different purposes. This can include the manufacture of CD’s, music videos/DVD’s, digital downloads and the sale of mobile ringtones, use of production music and the making of radio and TV programmes.
AMCOS was created by the collective music publishers in Australia to oversee the collection of mechanical recording copyrights
On the other hand, the Phonographic Performance Company of Australia (PPCA) issues licenses for the broadcast communication and public playing of recorded music (sound recordings) and music videos. Its members are Australian recording artists and record labels.
The PPCA is able to provide important administrative and commercial benefits to record companies and owners of sound recordings (sometimes the artist can own their own sound recordings, not the record company). The PPCA represents all owners of the copyrights in sound recordings.
So, anybody that plays recordings, recorded music or music videos needs to obtain a licence and be licensed by the PPCA so that the owner of the sound recording (the mechanical copyright) can receive royalty payments.
To reiterate, the Copyright Act gives copyright protection to sound recordings, which is separate to the copyright in music and lyrics. To broadcast or play sound recordings or music videos in public, you need to obtain a licence from the copyright owner of the sound recording or music video, as well as from the copyright owner of the music and lyrics.
PPCA licenses the sound recording while APRA licenses the music and lyrics.
So if you are a business playing music to the public you will need to obtain a licence from the PPCA to play sound recordings. Then darn it: you will also be needing a licence from APRA to cover you for the use of the copyright in the music and lyrics.
Collection societies are about maximising protection and ensuring the commercial rights inherent to copyright owners are in place. It would be costly and virtually impossible for individual copyright owners to do the work of a collection society.
As well as all that, external or third-party users of copyright would not be able to locate and licence the larger population of copyright owners. It would be waaaaay too much trouble!
Collection Societies are all about identifying various copyright uses. They can also assist in the collection of royalties earned by the use of copyrights. So by having these organisations in place, the commercial benefits for both sides (creators and users) are certainly in place.
Copyright Agency Limited (CAL) is responsible for the collection of copyright royalties in print materials: www.copyright.com.au
Australian Copyright Council: www.copyright.org.au
Arts Law Centre of Australia: www.artslaw.com.au
Australia Council for the Arts: http://www.australiacouncil.gov.au