The Distribution Of Royalties
Correspondent | Monday December 11, 2017 17:09
The concert left the entire audience in total awe; the crowd was so impressed by the various acts and performances that everyone in attendance did not want the concert to end. On that note, I want to use this opportunity to wish all other valuable readers season greetings, enjoy the festive season, be safe and remain blessed.
In this edition of the Copyright Forum, we continue our discussions with the topic of distribution of royalties. As a Collective Management Organisation, (CMOs), COSBOTS is charged with a mammoth task of building a comprehensive database of rights holders (members) and their original works.
This is known as documentation and forms the primary basis from which the process of distributions of royalties commences starts. Distribution as defined by our rules, means any allocation or dissemination of collected licensing fees, (monies) otherwise referred to as royalties, to rights-holders and owners of copyright works. .
It is crucial for a CMO to have effective and efficient documentation and distribution systems to best achieve its mandate. Many modern time CMOs continuously evaluate systems for both online delivery of information and to handle their documentation and distribution processes.
COSBOTS is currently evaluating database systems and ERP’s that are indented to assist the society to achieve higher efficiency in its processes and improve on delivery to its main stakeholders Since COSBOTS commenced operations six (6) distributions have been done.
Allocation of royalties is based on the frequency of exploitation or usage of the right holders works/songs by the various categories of users.
The actual allocation exercise is painstakingly tedious. The CMO needs to ensure that the distribution is fair and equitable and is in accordance with international rates. To ensure this desired outcome, each one of the 6 COSBOTS distributions has required months of data processing.
To run a distribution process, it is important to consider the following essential components:
l Is there revenue available for distribution? The revenue must be identified, analyzed and quantified.
l It is advisable to align the Society’s distribution period with its financial period.
l The Society makes deductions for both administration expenses and for the social and cultural fund in arriving at the Net Distributable Revenue (NDR)
l A defined performance period must also be determined: For example: April 2016 to September 2016. It means that all program logs sheets falling within that period are used for all users licensed for this period. The performance period must include the distribution classes of users, for example radio broadcasters, television broadcasters etc.
l Documentation must be in place as earlier indicated..
Different methods of distribution may be deployed by CMOs, such as dividing the NDR by the number of songs performed/used, or by the airplay time (per second billing).. Some computerized systems provide options on whether to use frequency of play, airplay time or other such related methods. The decision to choose which method to use is determined by several factors such as the system used by the Society, the standard & format of data, data volumes and the rights being distributed.
COSBOTS distributes royalties among members and members of affiliated societies according to the established distribution rules. Society’s distribution rules differ from country to country and so are distribution methods used.
In the 6 COSBOTS distributions the method of frequency of airplay was used, in this method a value point is assigned to the number of times that the song has been played. This method is suitable for manual distributions.. The value point (VP) determined is multiplied by the number of times the song was played and the product becomes the distributable amount for that particular song.
Members of sister societies are distributed royalties for their music used in Botswana in the same manner. After allocating amounts to each work, the amounts per work are broken down and divided between the rights holders in each song. Rights-holders include the composer, lyricists, arranger, adapters, interpreters, publishers etc.
The Society’s distribution rules, which are published for public consumption and can be found on the COSBOTS website contain specific guidelines regarding the breakdown in percentage terms of how royalties are shares between each key role. Performers may be distributed through a separate distribution which is also based on rate of performances.
This concludes this years’ installment, we wish to end by thanking you for your audience and continued support. We shall meet again in the New Year. Happy holidays once again
l I think this should be removed as it has a potential of confusing the readers into thinking that we already have a social and cultural fund.
l I personally think this would raise more questions than answers as one may wonder how sampling works as it is not explained. So I would suggest that instead of trying to explain it further, these two sentences could be omitted so as to cut on the number of words used.