29. 05. 2009

ANEM REPORT FROM THE ROUND TABLE: HOW TO REACH TO MORE REALISTIC TARIFFS PAID BY BROADCASTERS TO COLLECTIVE SOCIETIES, SOKOJ AND OFPS - MEASURES TO SUPPORT SUSTAINABILITY OF LOCAL MEDIA

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Continuing its activities directed at reducing the fees which have proved burdensome for the broadcasters, two days after the round table talks with the RBA (Republican Broadcasting Agency) and RATEL (Republican Agency for Telecommunication) representatives, ANEM organized another round table, this time with the representatives of collective societies, named “How to reach more realistic tariffs paid by broadcasters to collective societies, SOKOJ (Yugoslavian Composers’ Association) and OFPS (Organization of Serbian Phonogram Producers) - measures to support sustainability of the local media”. The meeting was held in Belgrade on May 28, 2009.

On ANEM call to participate in the round table, which was supported by USAID and IREX Serbia, large number of all invited authorities took part: from the Intellectual Property Office of Serbia – Branka Totić, the general manager, Zorica Gulas, the head of the Department for copyright and related rights, Marija Daskalović-Ilić and Vladimir Marić; from the Ministry of Science and Technological Development - Nevenka Novaković, a jurist; from the Ministry of Culture - Nataša Vučković-Lesendrić, Deputy Culture Minister in charge of the media; from SOKOJ - Aleksandar Kovačević, the general manager, Ana Novaković, the head of the Department for licenses and fees, as well as Marija Cvijanović, SOKOJ PR; from OFPS - Slobodan Nešović, a Board member, Petar Đurić, the general manager, Snežana Vujović, a Head of the Legal Department, and Aleksandar Porubović, a legal representative. Apart from them, there were also 10 representatives of 9 local TV and radio stations: RTV Zaječar, RTV Santos, RTV Trstenik, RTV Kragujevac, TV Jedinstvo, Radio Subotica, Radio City Niš, Radio Patak Valjevo and Radio Ema Bujanovac, as well as ANEM’s attorney at law Slobodan Kremenjak. At the round table, the representatives of USAID - Sibina Golubović; IREX Serbia - Richard Mc Clear and Jelena Olofsson; OSCE in Serbia - Ana Šolović; and NUNS (Independent Association of Journalists of Serbia) – Branko Vučković, a member of the executive board, also took part.

The main motif for organizing the round table was to find the solutions to assist the media in the time of the crisis, as well as to trace the course for future cooperation between collective societies and broadcasters, through open and constructive debate, with the participation of all the interested parties.

Branka Totić, the general manager of the Intellectual Property Office of Serbia announced the new Law on Copyright and Related Rights and commended the timing of the round table as another contribution to the public debate about the Law. The passing of the Law was primarily incited by issues detected in practice, primarily by the fact that the fees for using copyright and related rights were determined solely by collective organizations, without contracts or agreements with users.The major change envisaged by the new Law, which does not exist in the present legal solution, is heading in precisely that direction - meaning that the fees will be determined based on the contracts and agreements between collective societies and representative users’ societies. According to the Draft Law, a special body will be formed, namely a Commission for Copyright and Related Rights, which will assist in the case lacking agreement by approval of suggested fees. The tariff must be agreement between private rights of an author and public interests of the society using that right. According to the Law, performers and phonogram producers will be protected as well. The novelty is fee for rebroadcast of program by cable or satellite. The Intellectual Property Office had already organized a public debate about the Draft Law and had subsequently received 20 written proposals, including that of ANEM. The Office had carefully considered the suggestions and accepted many of them, which is evident from the offered legal solutions.   

Zorica Gulas, the head of the Department for Copyright and related rights at the Intellectual Property Office presented the offered legal solutions in more detail, regards to the main topic of the debate: the decrease of fees. The first major novelty is that the Law does not prescribe the maximum amount of fee, which is liberally agreed between users and collective society. She pointed out several advantages of that method: the users are familiar with the clear criteria on the basis of which the fees for copyright and related rights are decided upon, and agree to pay them voluntarily; court fees, which occurs when users refuse to pay the fees, would be diminished; also, there would be as many types of fees as there are user categories, etc. Another major novelty prescribed by the Law is that, if the agreement cannot be reached, the fee is approved by the Commission. The Copyright Commission ought to comprise 5 experts. There was a passionate debate and many suggestions for the election of the Commission members, and the following solution was reached: although the members of the Commission are appointed by the Government at the Office’s suggestion, 2 members of the Commission and one deputy will be proposed by collective societies and by the users’ societies each. On the other hand, the president of the Commission and his deputy will be motioned by the Office. The Office also keeps the right to choose suitable candidates from the proposed ones. If collective societies and users’ representatives do not manage to reach an agreement, the Managing Board of the society will propose the fee and forwards it to the Commission for approval. If the Commission agrees with the fee, it will pass an approval decision, which is final. If not, it gives its opinion on the matter, presents the reasons for disagreement and forwards that to the collective society, which must renew the negotiations with the representative users’ society until a certain deadline, or supply a new proposal for the fee. That way, the current solution, which authorized the collective society to decide on the fee independently and which proved inadequate, will be completely avoided, because the organization will not have such jurisdictions any more.

Slobodan Đorić, the RBA councilor, proposed several amendments of the Law. First of all, he expressed his belief that the Commission members must not have conflict of interests, as well as that the Commission should have broader jurisdiction in order to prevent conflicts between collective societies and users, as well as the clashes between two collective societies, which would diminish court expenses. He reminded the participants of several problems. It is feared that, unless the fees are limited to a maximum amount, collective societies will increase them according to their individual interests. Furthermore, another important issue is how to determine the scope of income on the basis of which the fees are calculated – in that respect, the Commission should take into consideration the sales of program, advertising, teleshopping, as well as selling programs for which works of art and sponsorship were used, while it should not take into consideration the resources for acquiring the equipment, loans, the resources reached via project competitions, nor the resources acquired from the local communities aimed at public broadcasting of information and regulated by contracts (which does not include the resources that media receive from the local municipality budgets). Đorić stressed that it is not completely clear provision that the fees should be determined on the basis of the broadcasters’ expenses if they have no income. He suggested that in that case the fees should be determined as a flat rate, based on a contract. He also touched upon the broadcasters’ obligation and proposed an introduction of unique software for all broadcasters.

Jasna Milanović, ANEM’s coordinator, stated that numerous requests from the members in favor of the fees’ reduction and the upsetting results of an internal survey were the major motifs for organizing the round table. The surveys conducted among the members in February and May this year, showed that the crisis had caused the decrease in advertising income and reduced the possibility of collecting the fees, while at the same time the high fees imposed by collective societies were simultaneously an additional burden for broadcasters. The results of that internal research show that each collective society individually costs broadcasters from 5 to 20% of their overall expenses, which, together with the broadcasting expenses and frequency fees, comprises a major part of overall expenses. A large number of surveyed stations, more precisely 85% of them, believe that there should be a unique fee for all the societies which protect copyright and related rights. They also suggest that such unique fee ought to be 3-5% from the marketing income, as well as that the current fees be reduced by 20-50%. Additionally, 80% of them are of the opinion that the basis for the fee calculation ought to be exclusively the marketing income, while 17% of them consider marketing and sponsorship incomes. Significant complaint of the surveyed stations is the lack of transparency of work of collective societies, since there is a big misunderstanding among broadcasters what they are actually paying for and whether the money really goes to the authors and those who enjoy the related rights. Keeping in mind these results and fighting for the interests of member stations, since the beginning of this year ANEM has stated several suggestions at all public debates and within the Ministry of Culture workgroup. First, a fee should be defined in proportion to the importance which using the protected works of art from the societies’ repertoire has for the users’ income. Second, the fee ought to be decided upon in collaboration with the broadcasters, and not independently, without market analyses and without them being based on market conditions. Then, the income on the basis of which the fees are calculated ought to be well defined, and the maximum fee limited to 3-4% for all collective protection of copyright and related rights, which would be paid to a unique account. The collective societies would, subsequently, divide it among themselves. Moreover, it is necessary to equalize the fees for all the broadcasters. Apart from that, ANEM stations request easier forms for keeping records about using some copyright and related right work of art, because they have significant problems with those in practice.

Aleksandar Kovačević, the general manager of SOKOJ, in the name of his organization, has stated several remarks about the Draft Law on Copyright and Related Rights and commented the suggestions of other participants. SOKOJ understands the requests for a single account, but that is not a realistic option for now, he believes. Such debate was already held, at the Offices request, but the agreement could not be reached. SOKOJ proposes that the basis for calculating fees be the whole income, just like before, because that is the only way to prevent abuse and manipulation.  SOKOJ supports passing the Law and the regulation that the fees be determined by agreement. That is why SOKOJ had insisted on removing the regulation about the maximum fee of 10% of income. He reminded the participants that SOKOJ had already such practice and that such agreements had defined and regulated all the issues (the fee, the income basis, how to keep records, etc.), as well as the negative basis (or what is not taken into consideration when calculating the fee). If the broadcaster has no income, SOKOJ is in favor of the solution that, just like before, expenses or minimum fees should be calculated, below which the repertoire would not be available.  Aleksandar Kovačević reminded the participants that SOKOJ contained the whole Serbian and almost whole international repertoire, so it is problematic that the suggested Commission should define the fees. It could mediate the process in a way, but could not know the value of a work of art, which is another remark on the Draft Law. SOKOJ general manager announced that his collective society is working on the software which will enable all the broadcasters to record the music more efficiently. SOKOJ will provide it at its expense, and it should be available by the end of the year. It will enable them to have exact insight into the usage of copyright material, which will lead to the more precise calculation of fees.

Petar Đurić, the OFPS general manager, invited all the broadcasters to find the information about stimulating measures regarding the fees on their website. He pointed out the recording system as the main problem. Users are obliged to register the broadcasted programs, in which period and for how long. Only 10% of all forms received by OFPS are correct. A correct recording system is the only way to charge fees realistically, because only in that case can it be estimated how many phonograms the user actually used. A more precise recording system would solve the problem of collective societies’ transparent work, because it would enable better insight into which authors ought to be paid and how much. OFPS is working on new software which will enable easier registering of phonogram usage. The project will be financed by OFPS. Further negotiations about increasing or reducing fees depend precisely on the recording system. The OFPS general manager claimed that broadcasters must be more aware that they are using something that does not belong to them, and should pay fees for it. That is why such gatherings are beneficial for everyone: for collective societies to determine fair fees, as well as or the broadcasters, to understand what they are paying for. OFPS supports passing the Law on Copyright and Related Rights and has minor amendments on its Draft, added Petar Đurić at the end.

Snežana Vujović, the head of the OFPS Legal Department, clarified stimulating measures which the OFPS managing board had approved for broadcasters, and are posted on their website:
1. Stimulating measures regarding the payment of the balance between the advance payment and the final amount, in six installments. The condition necessary to exercise the aforementioned stimulating measure is that the broadcaster pays the debt for 2008 (according to annual financial report for 2008) within 30 days. That measure is currently in practice.
2. A 20% discount for the annual financial report for 2009. The aforementioned discount can be approved if the broadcaster pays all the debts for 2009, as well as earlier debts. This measure will be used in 2010.
She also stated that OFPS had reached several out-of-court agreements with broadcasters, against which court proceedings had been initiated due to their failure to pay the fees. She stressed that OFPS is disposed for discussion about broadcasters’ fees, but suggestions have to be concrete.

Slobodan Kremenjak, the attorney at law (from the Živković & Samardžić office, which functions as ANEM Legal Department), and an expert on the media law, reminded the gathered that there were mechanisms for collective societies to realize higher income while broadcasters paid more realistic fees. So far it had not been mentioned that the difference between the maximum and the minimum fee in SOKOJ was only 1%, stated Kremenjak. Not all the broadcasters are the same, but they are in the situation in which they all pay the same fees: both those who broadcast music all day long and those who have informative programs in which, realistically, much less music and other works of art are used. He suggested that a broader difference in fees ought to be made, depending on the type of program. Collective societies might invest more into the promotion, to instruct the broadcasters about copyright and related rights in general. He said we could all work together on that. It is important that broadcasters be fully informed about SOKOJ repertoire, which must be found on their website in full, because that also contributes to transparency. The common conclusion is that the existing model of calculating fees is not sustainable; thus, any new model proposed by the new Draft Law must be better. As far as the basis for calculating fees is concerned, so far there were no major issues in practice, said Kremenjak, but it is important to avoid double payment, which sometimes happens when programs are sold. If a broadcaster sells its program, collective societies charge double fees for that, from broadcaster and buyer. It is similar with cable broadcasters. Currently, their fee is calculated on the basis of the number of programs and number of users, notwithstanding the fact that some of the programs had already been paid for (e.g. when a terrestrial channel is broadcasted via cable system). Such calculation is mostly detrimental to small, local broadcasters, warned Kremenjak. He also mentioned the Copyright Law and said that it is noteworthy that broadcasters and collective societies have their own representatives in the Commission, and that the fees are determined according to a mutual agreement, just like ANEM for a long time requested.

After the statements, there were questions and issues, which were debated on during the ensuing discussion. Broadcasters remarked that the procedure of keeping records of used copyright and related rights works of art was complicated and difficult. It required an employee to work on that full-time, so they saw introducing software for filling them in as the best solution both for the broadcasters and collective societies, but also for the authors who would thus get more realistic fees on the basis of the usage of their works of art. Since most broadcasters use professional broadcasting software which already contains log files with the broadcasted music, it might be the most useful and efficient way to use the existing software, ANEM broadcasters suggested. The transparency of work proved to be another crucial issue. In that respect, the suggested legal solutions which enable greater insight into the work of collective societies (e.g. the obligation to publish the information on their website) were supported.  A significant disparity between the broadcasters’ opinions and those of collective societies was evident when they discussed determining the income on the basis of which the fees were calculated. While broadcasters believe that it should be only the marketing income, collective societies think that the concrete income acquired by using works of art is a clear enough parameter which all should respect. In that sense, the societies believe that the adequate solution for determining fees and the basis for their calculation is via agreements, prescribed by the new Law. The participants agreed that the problem of fees ought to be solved systematically so that they would be sustainable, rather than reduced without any criteria. One of the conclusions of the round table discussion was that much should be done in the field of promotion and education so that the broadcasters might have a better grasp of what copyright and related rights were, and that they are legally bound to register the works of art they had used and pay a fee for that. The broadcasters invited the representatives of collective societies to give them a helping hand in the time of crisis and accept the changes happening on the media scene and the media market.

During the discussion it was pointed out that ANEM so far had the most influential arguments while fighting for the rights of its members, which contributed to the improvement of their position, according to SOKOJ and OFPS. The participation of all the invited organizations and authorities in one place and, notwithstanding the mutual misunderstandings of collective societies, their goodwill to negotiate with the broadcasters, i.e. users, although they are not legally obliged to do so, indicates that ANEM advocacy efforts to improve the position of broadcasters do give results. Clear sign that ANEM stands are widely accepted by the authorities are the provisions of new Law on Copyright and Related Rights draft, which is in many essential points identical to ANEM stands and publicly spoken requests, which are submitted to IP Office. In it the regulations of the existing Law have been significantly improved for broadcasters and other users, because fees are determined by mutual agreements; the managing boards of collective societies cannot decide on fees independently any more, because even when the agreement cannot be reached, the proposed fee must be approved by the Commission, which can refuse the motion, in which case the procedure is renewed; the members of the Commission will be experts; the transparent work of collective societies is mandatory, etc. The stated legal solutions are a proof that ANEM had the right arguments when representing its members before collective societies and other relevant bodies.

Still, the current situation requires changes even before the new Law is passed. ANEM will, therefore, continue to work on improving the broadcasters’ situation through direct negotiations, as well as other advocacy efforts. Some advances can already been seen: OFPS has adopted stimulating measures for broadcasters, SOKOJ has announced new software which will enable stations to register used works of art more easily, and both organizations have, by and large, showed goodwill for further negotiations on the topic of fees, too.

The round table have shown that the partnership between broadcasters and collective societies ought to be upgraded further, and that such gatherings, as well as direct negotiations, are the right path to finding solutions of mutual interest.