The use of musical works on digital platforms in light of SAYCO's Virtual Event Fees Manual for Unlicensed Channels
Autor: Cristian Moreno
In view of the debate that has been generated in recent days in Colombia by the Manual of Virtual Events Fees to Non-Licensed Channels (hereinafter the Fees Manual) issued by the Society of Authors and Composers of Colombia -SAYCO (in Spanish)-, and the implications that these fees bring for the new challenges that the global pandemic has brought to the music industry, it is worth recalling some relevant aspects on this subject in order to understand what is happening today with the use of musical works on virtual platforms, as it occurs in the so called "Virtual Concerts".
What are Collective Management Organizations?
These are associations of artists, authors and performers, through which a collective effort is made to simplify the management of copyrights, and therefore these entities represent, collect, manage and distribute the economic remuneration from the different uses of artists’ works.
In Colombia, a Collective Management Organization of Copyright and Related Rights finds its legal basis in Decision 351 of 1993 of the Andean Community of Nations, as well as in Article 10 of Law 44 of 1993.
In turn, by legal mandate, these organizations are inspected, monitored and controlled by the National Directorate of Copyrights –DNDA (in Spanish)–, so this same entity authorizes the operation of each Collective Management Organization in Colombia.
What are the rights that a Collective Management Organizations can license on behalf each author?
As is known, Copyrights (please read Author Rights in this context) there are two types of rights, those of moral character and economic rights, the second being those by means of which economic exploitation of the works is sought. Thus, within this category, the following rights can be found:
- Reproduction, meaning to affix the work in a medium that allows its communication or the obtainment of a whole or part copy of it, by any means or procedure (Article 14, Decision 351 of 1993).
- Transformation, being the right of the titleholder to authorize the adaptations, arrangements, and other transformations of the works, in other words, it consists of "authorizing another person the creation of derived works" 1.
- Communication, is the means by which the owner of the work can authorize or prevent acts by which a plurality of persons can have access to all or part of the work2.
- Distribution, which includes any form of making available to the public copies containing the work,keeping in mind that distribution "implies the materialization of the work [...] in a tangible medium"3, meaning a physical support of the work, which will be subject to legal regulations concerning tangible property.
- Making available, which is a right involving acts of reproduction and distribution4, consists of "an act of communication to the public on request, and allowing each person in the public to have access to the work from a place and at a time individually chosen by them" (Article 8 of the 1996 WIPO Copyright Treaty), regardless of the physical support, which is indispensable for the right of distribution.
With this in mind, the rights that are mainly managed collectively are the rights of communication and making available, if we take into account that the rights of distribution and reproduction are often authorized by the owners directly.
What does the Fees Manual mention?
Recently, the Fees Manual issued by SAYCO has been the bone of contention between the different parties interested in the use of musical works, be them the entertainment industry, authors, SAYCO or the DNDA itself. However, this discussion has also attracted the attention of those ordinary people who have seen their curiosity fed by journalists and the media.
In order to understand what this discussion is about, it is necessary to explore what that Fees Manual establishes, starting from the fact it is presented as an approach based on the Berne Convention, the Political Constitution in its Article 61, Article 45 of Decision 351 of 1993, which determines that the Collective Management Organizations are called to determine the fee for the public use of the works, as well as Decree 3942 of 2010, which establishes the criteria to be taken into account when establishing the fees for the use or exploitation of protected works, and Article 30 of Law 44 of 1993.
In the words of SAYCO, this Fees Manual is based on the search to establish a use rate structure not contemplated prior to the world pandemic and the challenges it has brought with it, which has resulted in the rethinking of authors and businessmen regarding the market for musical events, as is the case with virtual concerts. Likewise, this Fees Manual indicates that the rates will not apply to those events carried out through the digital platforms licensed by LatinAutor.
We recall that LatinAutor is an organization established by the various Latin American Collective Management Organizations, which seeks to facilitate the administration and exchange of information on the works used in the events in each of the member countries. Thanks to this organization, large platforms such as Facebook, Instagram, AppleMusic, Spotify, among others, have licenses for the use of musical works that allow their users to create and share content that includes songs or music from various authors or composers, provided they are not for profit.
The center of the debate is precisely whether the use of the musical work is for profit or not, since if there is an economic benefit from the events in which the musical work is performed, then the new fees established by SAYCO in its Fees Manual will be applicable. In this regards, it is understood that a virtual event will be for profit when the event is sponsored and/or the event charges a certain value for users to have access.
How much will licenses cost?
The Fee Manual establishes that for profit virtual events have rates ranging from 1.3% to 10%, depending on the intensity category, which includes criteria such as incidental, environmental, necessary or essential intensity. Similarly, the settlement of the percentages will be made on the final brute income of the event.
Additionally, the intensity takes into account the number of views and whether the events include a theme of a musical nature, which is then catalogued as essential use intensity.
It should also be pointed out that the fees are not fixed rates; they are simply references that provide the user with the necessary information to understand where the negotiation comes from, since their basis is founded on an agreement principle, in which a fee is established as a result of the negotiation between the parties.
Finally, this is not the first time that this type of debate has arisen in the country, which shows that it is an ongoing discussion among the various stakeholders in this market, from the times when collective management itself had its beginnings in France, when authors who met in cafes or restaurants, on hearing that their compositions being used, as a means of protest and claiming rights over their creations, resisted or simply stopped paying for the products consumed, since they argued that this was equivalent to what people were doing with their works.
1 RENGIFO GARCÍA, ERNESTO. Propiedad Intelectual: El moderno derecho de autor. Bogotá: Universidad Externado de Colombia, 1996. Pag. 172
2 LIPSZYC, DELIA. Derecho de autor y derechos conexos. París – Bogotá – Buenos Aires: UNESCO – CERLALC – Zavalia, 1993. Pag. 183
3 GUZMAN, DIEGO. Derecho del arte: el derecho de autor en el arte contemporáneo y el mercado del arte. Bogotá: Universidad Externado de Colombia, 2018. Pag. 102-103
4 Ibidem. Pag 106-107.