Law & Policy, Music Business

BON, COSON and MUSIC SHUNS – 5 THINGS

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Nigerian law colleague and blogger Rotimi Fawole provides a synopsis of how collecting societies work and his take on the COSON, BON fight.

If you are also looking for more comprehensive discussions on Performance Rights Organizations/Collecting Societies and the various legal issues that arise in the context of music publishing/licensing, then be sure to reference the following archived AML articles as well:

1.PAUL PLAY v. ULTIMA LTD. & MTN: Did COSON Have the Legal Authority to Collect Royalty Fees In Behalf of an Unregistered Member?

2. A Bird in Hand is Worth Two in The Bush: Why Nigerian Artists Are Advised To Register With One of ASCAP, BMI, or SESAC

Cheers,
Uduak

It has now been widely reported  that IBAN* and BON** (associations of independent television and radio broadcasters) have chosen, in response to lawsuits by COSON, seeking the payment of royalties for its members, to stop playing the music of COSON-registered artists. Here are a few bits and bobs on collecting societies and royalty payments.

  1. What is a Collecting Society?

A collecting society is an organisation that, as the name suggests, collects royalties income on behalf of its members. What income? Well, you’d have to go back to Copyright 102, on who owns the music, for copyright basics. However, to quickly summarise, the music and the process through which it is made confers exploitable rights on different people. If you’re a busy song writer or a touring singer, the chances are that you cannot track all the stores, radio and tv stations, digital platforms, etc. playing or selling your music. Collecting societies do this for their members. Examples of collecting societies outside Nigeria are The Harry Fox AgencyPRS for MusicASCAP, NORM, SAMRO and so on. In Nigeria, we have COSON – the Copyright Society of Nigeria. COSON is the collecting society for musical works and sound recordings in Nigeria. What are musical works and sound recordings? See Copyright 101.

2.   Does COSON represent only singers/artists?

In theory, no. I reckon COSON would also argue that it doesn’t just represent singers in practice.  In theory, COSON should represent and indeed holds itself out to represent everyone in the music-making process – singers, writers, instrumentalists, producers and so on. However, the nature of copyright is such that if a producer or instrumentalist was hired and paid a one-off fee for their work, it is deemed a work-for-hire and copyright vests in the employer. Which brings me to the “in theory” part, because in Nigeria,  most singers write their own songs and the producer (hired and paid a one-off fee) sequences the music with software. After Cobhams, not too many others hire session bassists, guitarists, percussionists, etc., unless you’re part of a fuji or highlife band, but you get the drift. If a singer who’s written his own music (or his label), hires a producer (on a one-off fee) who lays the beats, who owns the copyright in the work? The artist? That’s right. But I am more than happy to be corrected if my assessment is wrong.

3.   How do Collecting Societies pay their members?

I’m just going to copy and paste the ASCAP formula . You can find it on their webpage, here.

Use Weight  X  Licensee Weight  X   “Follow The Dollar Factor”   X   Time of Day Weight   X   General Licensing Allocation

+

Radio Feature Premium Credits
(for radio performances only where applicable)

+

TV Premium Credits
(for performances in highly rated series, where applicable)

=

CREDITS

— USE WEIGHT

The factor, or value, attached to each type of performance (theme, background, promotional, etc.)

X

LICENSEE WEIGHT

This factor reflects the license fee paid by a station (or group of stations) and the number of hours included in the appropriate survey. The licensee weight is also referred to as the “hook-up” weight with respect to network television, reflecting the number of stations carrying a broadcast. Other surveyed media – such as the 300 highest-grossing live concerts, symphonic and chamber concerts, websites, background music services, airlines, circuses and ice shows – are also assigned “weights” based on license fees paid to ASCAP.

X

“FOLLOW THE DOLLAR” FACTOR

This factor ensures that the license fees that ASCAP receives from any medium are paid to writers and publishers for performances on that medium. The money we receive from radio stations is paid out for radio performances, the money we receive from TV networks is paid out for TV performances, etc.

X

TIME OF DAY WEIGHT (if applicable)

On television, the value of a performance can vary depending on the time of day; for example, whether it takes place in prime time or in the middle of the night.

X

GENERAL LICENSING ALLOCATION

Fees collected from non-broadcast, non-surveyed licensees (bars, hotels, restaurants and the like) are applied to broadcast feature performances on radio and all performances on television, which serve as a proxy for distribution purposes.

+

RADIO FEATURE PREMIUM CREDITS (for radio performances only, where applicable)

Songs that earn certain threshold numbers of radio feature credits in a quarter receive additional credits in that quarter.

+

TV PREMIUM CREDITS (for TV performances only, where applicable)

Theme, underscore and feature performances in highly rated network and local TV series earn additional credits as TV Premium payments.

=

CREDITS

CREDITS X SHARE X CREDIT VALUE = $ ROYALTY

“When all of these factors are computed, we arrive at the number of total performance CREDITS. After establishing the number of credits generated by a performance, the next step is to allocate these credits among all of the writers and publishers of the work based on the SHARE each should receive. ASCAP is advised of the correct shares to be paid when members submit Title Registrations. For example, if two co-writers of a song share royalties equally, each will receive 50% of the total credits. The final step is to multiply credits by the appropriate CREDIT VALUE to arrive at the ROYALTY payment.”

You can also view BMI’s method here.

How does COSON pay its members? They also describe it on their website and here’s another copy and paste:

“At COSON, there are two categories of distributions: Specific Distribution and General Distribution.

“When a license is issued for a clearly identifiable work or a log is received from which the royalty due to a particular work is clearly discernible (e.g radio & TV promos, road shows, jingles, ringtones, etc), the copyright owner/s is entitled to a royalty based on how much the society has collected on behalf of the owner from the user. The only deduction in this case will be the administrative cost.

On the other hand, a general distribution is made to members across the board, in cases where the royalty collected cannot reasonably be ascribed to any specific work or where the members at an AGM have decided that a token be paid to all members irrespective of the amount of use of their works. General distributions are usually done once in a year.”

Texthelaw has the full story.

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Africa Music Law™

AFRICA MUSIC LAW™ (AML) is a pioneering music business and entertainment law blog and podcast show by Fashion and Entertainment Lawyer Ms. Uduak Oduok empowering the African artist and Africa's rapidly evolving entertainment industry through brilliant music business and entertainment law commentary and analysis, industry news, and exclusive interviews.

Credited for several firsts in the fashion and entertainment industry, Ms. Uduak is also a Partner and Co-Founder of Ebitu Law Group, P.C. where she handles her law firm’s intellectual property law, media, business, fashion, and entertainment law practice areas. She has litigated a wide variety of cases in California courts and handled a variety of entertainment deals for clients in the USA, Africa, and Asia.

Her work and contributions to the creative industry have been recognized by numerous organizations including the National Bar Association, The American University School of Law and featured in prestigious legal publications in the USA including ABA Journal and The California Lawyer Magazine. She is also an Adjunct Professor at the prestigious Academy of Arts University in San Francisco.
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