GROWING ROLE OF CMOs IN A TRANSFORMING MARKET

The landscape of copyright licensing and royalty collection is vast and complex, to say the least. A composer or author can be liable to fetch royalty from various sources globally. These sources work under their copyright laws. It would make it challenging for an individual composer or author to collect their dues. Here is where a CMO steps in.

What exactly is a CMO, and what is its role?
‘CMO’ stands for Collective Management Organization. A collection society that enables copyright owners and administrators to collect royalties generated by several types of use.
As an organisation, a CMO is owned and operated by its members and needs to conduct its business fairly. It has to be legally authorized to collect the due royalties on behalf of its members.
A few examples of CMOs include GEMA (Germany), SACEM (France), and SUISA (Switzerland).
The oldest and leading CMO in India representing the authors, composers, and publishers of music is The Indian Performing Right Society Ltd. (IPRS).

The Indian music industry has broken free of the traditional business models and is sailing the global waves. It means innovation, advancement, and being relevant are vital to every vertical of the industry.

With international publishers now eyeing the Indian music market, the CMOs also have their work cut out.
To know more about the change, growth, adapting to global standards, and the future role of Indian CMOs, we spoke to our CEO Mr. Rakesh Nigam for his insights.
Here below is a brief insight into the interview. Members can watch the full interview here. https://youtu.be/PBGyeL_pnv4

The traditional boundaries of the Music Industry have stretched like never before. It also includes the role of a CMO. How has this role grown and changed?
Post the amendments in the Copyright Act, in 2012, authors and composers were given an inalienable right to royalty. The law enables the content creator, their legal heir, or a Copyright Society representing the creator to collect a royalty for the content. For any individual, collecting royalties from various sources and grant licenses to publishers or end-users across the globe to use the copyrighted work would be daunting. Similarly, a publisher or an end-user cannot possibly trace and apply for a Licence from every content creator whose work they want to use.

Hence the role of a CMO becomes significant as they bring all the concerned parties together on a common platform. The CMOs play a crucial role in protecting the economic interests of authors and composers. It also provides a single-window license to the users making their business cost-effective and hassle-free.

With the advent of digital players, the CMOs will play a more vital role in protecting the economic interests of both the creators and the end-users.

What are the pressing needs a CMO has to work on to stay up with the time?
The consumption across digital platforms has skyrocketed in recent years. However, owing to the pandemic, it has shot through the roof in the past several months. A substantial chunk of the entertainment consumption has been on digital platforms. A plethora of audio and video OTT platforms have recently entered the Indian market. A CMO collects royalty for the Music and background music played on these platforms. The creator should be careful about not losing out on their royalties. It is vital to register the works as also ensure that the metadata is accurate. Creators tend to upload their content on digital platforms without proper MetaData. It creates difficulties in collecting royalties for the CMOs and leads to creators feeling robbed of royalties. The content creators need to ensure that they enter the accurate MetaData with required credits to authors and composers with their legal names, publisher’s name, ISRC Code, ISWC Code, year of release, while registering their work. This makes it easier to track and claim the assets to collect royalties for a CMO which in turn will be passed on to the copyright owners.

Correct Meta Data and accurate ingestion of content on digital platforms will be playing a vital role in monetization for all the stakeholders.

How much can technology aid in this aspect?
It is humanly impossible to track consumption and claim royalty from the numerous platforms because it entails processing trillion lines of data to generate only a million units of revenue. However, with correct MetaData and accurate ingestion, technology can help gather information in a matter of hours which humans would take days to do.

What steps has IPRS taken in regards to this?
IPRS is the oldest and the only CMO in India, authorized under the Copyright Act, 1957 to carry on the business of granting and issuing licenses in respect of musical works and literary works associated with musical works assigned to it by its members. We have to deal with three stakeholders while disbursing royalties, viz publishers, authors, and composers. The publishers have a right to 50% of the share while the rest split the remaining into two. The situation gets complicated in case there are multiple composers or authors of the same content. If the claimant is deceased, there might be multiple legal heirs as well.

To be updated with the times and equipped to garner maximum utilisation from the significant partnerships over the past couple of years, IPRS has upgraded itself technologically by incorporating the Back Office software system.

The advantage of using Back Office is that we can get our members to register their data themselves. Every member will have a login page where they can view and update their data. Once submitted, IPRS will check and sanitise it to ingest it further.

IPRS has also made the new member registration process online. The prospective members can join from any corner of the country and don’t need to visit our office for enrolment. Once their application is approved, we send them a physical deed to sign. We are working to incorporate this process online too. Since all applicants might not have digital signatures, so we are working on it.
IPRS also has an online license portal. A user can register for a license and even make the necessary payment completing the entire process online. The License will be mailed to the user once we confirm the payment.

As a responsible CMO, IPRS is incessantly working towards making the licensee and member experience as smooth and hassle-free as possible.

How do you foresee the role of a CMO in the ever-growing and expanding music space?
The role of a CMO is only going to gain importance, with users becoming more tech-savvy and powerful. The content creators lean towards the creative side, so the CMOs have to step in to help them out with licensing and collecting royalties.

As the use of digital platforms and consumption of music increases, the CMOs will have to work collectively to ensure the fair value is disbursed among publishers, authors and composers.