Collective rights management organisations

Why are collective rights management organisations necessary?

In an age of mass utilisations, collective rights management organisations bring creative artists and users of works together. Collective rights management organisations act as a link between them: they bundle the rights and make it easier for users to purchase them. Conversely, they guarantee the creative artists that they will be remunerated for the use of their works.

Why does a small country like Switzerland need five societies?

Under the provisions of the Federal Copyright Law, the Federal Government is required to designate one collective rights management organisation to administer rights for each work category and for the neighbouring rights. Accordingly, authority to manage copyrights is today held by SUISA for music, ProLitteris for literature and visual arts, SSA for dramatic works, SUISSIMAGE for audiovisual works and SWISSPERFORM for all neighbouring rights. 

Why should the state operate collective rights management organisations of this nature?

The collective rights management organisations are not state-run organisations, but private cooperatives (ProLitteris, SSA, SUISA and SUISSIMAGE) and an association (SWISSPERFORM). Collective rights management organisations are self-help organisations representing creative artists. However, they require Federal authorisation in order to operate, and they are also subject to supervision by the Swiss Federal Institute of Intellectual Property (IGE).

Who can make use of the collective rights management organisations?

Anyone wishing to utilise the rights to works or performances is able to purchase these rights as a bundle from the collective rights management organisations. Conversely, the creative artists represented by the collective rights management organisations receive remuneration in return. In this way, the collective rights management organisations are a link between the creative artists and users, thereby contributing to cultural diversity and prosperity. 

Can I appeal to the Office of Price Control if I disagree with the tariff?

The collective rights management organisations are not free to set the tariffs since these must be agreed by a Federal Arbitration Board (ESchK) composed of equal numbers of representatives from each party. The Federal Arbitration Board is also required to consult the Office of Price Control before reaching a decision. This means that the Office of Price Control investigates the tariff during this phase. Once the tariff has been approved in legally binding manner, it applies for all users and is also binding on the courts.

But isn’t it only the big, well-known artists who reap the benefit of the collective rights management organisations?

When it comes to distributing the remunerations, the artist’s popularity has no bearing but rather the success of a work or performance because by law, the distribution must be carried out “in accordance with the earnings of the individual works and performances”. This means that if a work is frequently broadcast, performed or copied, its authors receive the royalties corresponding to the utilisation. In addition to this individual distribution, 10% of the total income is apportioned to social welfare and cultural funding for the benefit of all rightholders. 

How can creative artists have an influence on the collective rights management organisations and exert control?

Four authors’ rights societies are organised as cooperatives, SWISSPERFORM as an association. The governing body of these societies is the General Assembly or the Delegate Assembly as applicable. Guaranteed involvement in management decisions is a prerequisite for granting of authorisation to administer rights. Added to this is the institutionalised supervision by the Swiss Federal Institute of Intellectual Property.

Why do the collective rights management organisations pay their bosses such princely salaries – and what’s more, at the expense of consumers?

The administrative costs, including wages, are borne exclusively by the members. A percentage deduction is made from the royalties to be paid out in order to cover the expenses. The management salaries are set and clearly accounted for by the managing boards. The general assembly can exert influence on wage policy through the election of the managing board or to a certain extent through the budget approval. To date, the society members have supported the societies’ wage policy. The Swiss Federal Institute of Intellectual Property (IGE) is entitled to take countermeasures should it deem necessary.

Like health insurance funds and banks, the collective rights management organisations are subject to federal oversight, yet they remain private organisations, obligated to the members of the cooperative or association. A labour market comparison of salaries is therefore made with private sector companies of similar standing in terms of turnover and workforce size. The heads of the societies must possess the highest professional qualifications for the tariff negotiations with users (industry, media) as well for the important task of maintaining international contacts.

The collective rights management organisations simply have to administer monopolies and don’t have to face any competition.

No! The tariffs are not simply set by the authorities as is the case with the Post Office or in certain neighbouring countries, but have to be negotiated with the user associations and submitted to the responsible Federal Arbitration Board for approval. The collective rights management organisations endeavour to obtain as much as possible for their members. Pulling in the opposite direction are the user associations representing the industry. These negotiations are extremely tough and the outcome is not infrequently appealed to the Federal Supreme Court. As a general rule, both sides have to make concessions. Should the members be dissatisfied with their society, they can elect different persons to the boards of their society or entrust their rights to another society in Europe. 

The collective rights management organisations are bloated. For example, why does one franc in five go on administration at ProLitteris instead of to the authors?

The administrative costs vary from society to society and are borne exclusively by the rightholders. They vary from 6% to 20%. They are comparatively high at ProLitteris due to the fact that the money collection is very laborious: in the case of the photocopier tariff for example, by law around 70,000 invoices a year have to be despatched and the incoming monies accounted for. To this must be added all new users, that is to say companies that have commenced operation during the tariff period. Because not every company is prepared to pay the legally due remuneration without further ado, reminders and legal proceedings are sadly unavoidable. Nonetheless, ProLitteris has succeeded in steadily reducing its administrative costs in recent years. 

If the members are dissatisfied with the cost deduction, they are entitled to withdraw the rights from the society. A low cost deduction is thus the goal of every society. There are however limits to the potential reduction in administrative costs given the small scale of the Swiss market; measures to make money collection more efficient have to date always failed at the political level.

How much does it all cost and who pays for it?

Administrative costs vary from around 6% to 20% of the income according to the society and rights concerned. The higher the collection costs, the higher in turn the administrative costs. The administrative costs are deducted before distribution of the income to the rightholders. This means that they are borne by the rightholders themselves.