Russian Culture Ministry Makes Royalty Proposals, and Collection Societies Scoff

As the saga over copyright royalty collection continues in Russia, the culture ministry has comes up with a set of proposals aimed at improving the system. However, collection societies say the proposals are unfeasible.

According to the ministry's proposals, collection societies are to pay at least 75 percent of all collected money to rights holders, with the remaining 25 percent spent on operation costs and other uses.

The proposals also stipulate that collecting societies provide rights holders' access to their records, including data on collected and paid royalties.

The ministry's proposals are apparently aimed at increasing the transparency of collecting societies' operations, and stepping up payments to rights holders.

"In theory, the idea is excellent," Artemy Karpychev, deputy general director of RAO, the state-approved authors’ rights collecting society, tells Billboard, adding that there would be substantial obstacles in the way of implementing it.

"The 75-percent figure is what we already have, on average," he said. "But if it has to be applied to every type of authors' rights separately, for some of them, collection will have to be stopped. Take, for instance, collecting public performance royalties from restaurants and cafes," he explained. "Transaction expenses for that type of collection are very high."

According to Karpychev, giving rights holders access to collecting societies' data bases would require substantial investment.

"Here, we have the issue of security, and for this kind of data, security would have to be close to what banks have," he said. "We also have the [recently enacted] law on personal data storage. To comply, collecting societies would have to not just update their software, but completely change the structure of data storage."

The copyright royalty collection issue has been in the limelight in Russia for several months. This past summer, the country's three main collecting societies -- RAO, VOIS, which deals with neighboring rights, and RSP, which collects a one-percent tax on imports of electronic devices that can be used for copying content -- announced a merger.

Soon, the communications ministry sharply criticized the existing copyright royalty collection system, accusing existing collecting societies of insufficient transparency and suggesting that collecting should be done by a state agency.

Last month, it became known that the collecting societies' consolidation plans were no longer certain.


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