Collective rights management… Recasting the legal framework for, against monopoly
By Anote Ajeluorou
For many years now, there has been so much wrangling and rancour in the rights management system of intellectual property rights, especially in the realm of music and sound recordings in Nigeria. As a sector that ought to yield so much money for musicians, interest in who controls it has fueled bitter rivalry amongst stakeholders, with the supposed umpire, Nigerian Copyright Commission (NCC), the regulatory body, regularly accused of playing a less than salutary role in supervising the rights sector.
Although efforts have been made in the past to set things right on the legislative floor of the National Assembly, it yielded no tangible results. Now, the gladiators have returned to the trenches again. Perhaps, for the last time, artistes and stakeholders would at least be certain how the copyright environment should be, and how the vast wealth that ought to accrue to artistes through royalties should be managed on their behalf by collective rights management organisations. The two gladiators for now are Musical Copyright Society of Nigeria (MCSN) and Copyright Society of Nigeria (COSON).
Indeed, Nigeria’s musical artistes’ soul is in the crucible in this titanic fight on whether there should continue to be monopoly in the rights’ management environment or it should be liberalised for multiple operators.
In fact, the fight didn’t start today. It dates back to the 1990s, and at the creation of NCC when Performance and Mechanical Rights Society (PMRS) was formed to rival MCSN, which had been in existence since 1984 following the withdrawal of Performance Rights Society (PRS) of Britain from functioning in Nigeria as part of the indigenization policy aimed at nationalising establishments in the country.
MCSN had, over the years, cried wolf over the activities of NCC, which it has repeatedly accused of fueling the discord in the industry, accusing its officials of performing extra-statutory roles by forming PMRS. This secret, MCSN claims, was revealed by its overseas affiliate, PRS, which was being threatened at the time by NCC to partner with PMRS instead of MCSN in a bilateral relationship. The deal was to enable artistes on both sides – Nigeria and U.K. – seamlessly receive royalties on either side, a role MCSN had been performing, with PRS and other rights collectors in Europe and elsewhere.
MCSN has repeatedly named the then NCC Director-General, Mr. Moses Ekpo, and its past board chairman, Evangelist Ebenezer Obey, as culprits in this inglorious role by NCC to form a collective rights body through the backdoor, a role that successive NCC’s D-Gs have vociferously denied. With NCC’s refusal to register an organisation that pre-dated it for reasons it could not satisfactorily explain, it thus sowed seeds of doubt over its role as unbiased umpire.
Also, NCC’s refusal again two years ago to register MCSN on the basis of its in-house, unpublished rules on grounds of ‘national interest’, observers say, smacks of double standards or a witch-hunt. Why should a regulator ask an organization seeking to register with it to pay another fee before it could say why it was denied registration is something out of the books.
COSON’s arbitrary billing versus BON’s boycott threat
At the heart of the current impasse that recently saw players in the rights collective management system appearing before the joint House of Representatives Committee on Judiciary and Justice is COSON’s arbitrary billing of broadcast stations. And, led by the Broadcasting Organisation of Nigeria (BON), umbrella body for broadcast stations, BON is insisting that the rights collective environment should be liberalised, so as to allow for competition and fairness. COSON’s monopoly, it claims, is stifling the business. They frown at the combative, aggressive and militant manner COSON has been going about its business of collecting royalties on behalf of musicians, as a monopolist in the sector.
But COSON also insists that royalties’ collection is not a business hence the company is limited by guaranty and so many players cannot be allowed to operate. Through its chairman, Chief Tony Okoroji, it argued that since its inception two years ago, it has collected over one hundred million (N100m), a breakthrough in Nigeria’s collective history. Out of this, he said, N70m was distributed to musicians.
Indeed, COSON’s entry into the scene has been colourful, charismatic and even dynamic, with its catch-phrase motto ‘…let the music pay’. At the same time, stakeholders have questioned the rational behind some of its actions, especially the lavish one-week party it held early in the year. They want to know from which account COSON held the event, and if a collective body whose business it is to remit money to musicians be engaged in such jamboree? It was even learnt that it had barter arrangement with stations, as it were to barter away musicians’ money for the party!
In any case, while speaking on behalf of BON, chairman of DAAR Communications Plc, Chief Raymond Dokpesi, accused COSON of “intimidation, closure, disruption and seizure of our property by COSON, as licensed by NCC”, adding, “never in the history of collective management of artistes’ intellectual property has there been a monopoly” and wondered why it was so in Nigeria.
But Okoroji fired back and accused Dokpesi and his stations (RayPower and AIT) of being the biggest defaulter in royalties’ payment. He said until the licensing of COSON, Nigerian musicians had suffered untold deprivations because virtually all the stations refused to pay, and accused them of ‘divide and rule’ tactics. For Okoroji, Dokpesi was being economical with the truth, as he and others used the lingering crisis between MCSN and PMRS, and now, COSON to short-change musicians. Okoroji said while the stations’ owners fed fat on musicians’ money by playing their music and not paying for it, the musicians went home empty-handed.
He, therefore, vowed to do everything legally within his power to change the status quo, noting, “I asked to do this job and I was chosen to do it. It was not forced on me. Someone needs to do it and it has fallen on me. I know that it is a very tough job but it has to be done. In an environment where there is no long-standing culture of respect for intellectual property rights, it is like pulling teeth. I did not decide to do this job because I was hoping that someone would clap for me or commend me or even appreciate what I do. I love my country and must contribute to its development. I understand the risk of being completely misunderstood and you know that I have repeatedly had to endure very vile character assassination. I thank God for taking care of me each time. As long as I have any breadth left in me and the people I represent have confidence in me, I intend to do this job to the best of my ability and with fairness to all”.
BON’s resolutions, dated October 23, 2013, regarding the unfriendly activities of COSON towards its members, were to liberalise the copyright system, charge musicians for broadcasting their works, and failing which, a banning of musical and sound recordings of Nigerian musicians on BON’s platforms from December 15.
According to the statement, BON “…will no longer tolerate the incessant and continuous harassment, intimidation, blackmail and attacks on broadcasting stations by COSON over un-negotiated payment of license fees, which in all respects were and are fixed and imposed arbitrarily and unilaterally by COSON…
“BON noted that it is highly unequitable, unfair and unprogressive to continue to enthrone and promote COSON as a monopoly in the collective management of music and sound recordings in Nigeria as the effect of this monopoly is adversely affecting broadcasting stations who constitute major users of musical works of indigenous and foreign artistes in Nigeria”.
Also, BON asserted that its members had been paying royalties and had made representations to the Minister of Justice, Mr. Mohammed Bello Adoke, and the NCC without meaningful response. For BON, therefore, copyright management must be liberalised to save its members from COSON’s harassment.
An example of the unilateral and arbitrary imposition of levy on stations is that which COSON slammed on the three radio stations on Steam and Globe Broadcasting and Communications Ltd platforms – Cool FM, Wazobia FM and Nigeria Info FM. In the month of September 2013, COSON invoiced the three stations –Cool FM - N40m (VAT N2m); Wazobia FM –N40m (VAT N2m) and Nigeria Info FM – N30m (VAT N1.5m), a total of N115.5m.
As a result of this billing among other things, Steam had had to make a case, which COSON would not entertain, “Once again your letter invoiced us a lump sum figure (i.e. with no breakdown) without adhering to the principle of ‘let the music pay’ and without insuring that as of December 31, 2012, your organisation did not collect copyright fees from over 215 FM stations be it federal, state or private. Bearing in mind, this excludes TV and AM stations, which COSON could have collected huge fees, if the invoicing was reasonable”.
Steam and Globe, therefore, sought the help of NCC’s Copyright Dispute Resolution Panel to thrash out these contentious issues. Steam’s Chief Operating Officer, Evita Mousalli signed the statement. For Steam, Globe and other BON members, COSON’s charges are not based on music airplay (a fee per song) played, as is usually done.
Further, Steam says, “COSON is disregarding our arguments that we are playing around five songs per hour in Cool FM and four songs per hour in Wazobia FM, and yet we are being charged more for Wazobia FM than Cool FM, which is not logical considering the ‘basis of collection is to pay per song played’… COSON is charging stations per reputation and not per song played, which negates the principle of fairplay”.
But COSON refutes claims of arbitrary tariffs imposed on stations. In responding, Okoroji said, “Arrant mischief! They know for a fact that COSON cannot impose a tariff on anybody. The Copyright (Collective Management Organization) Regulations, 2007 provides for anyone who disagrees with any tariff issued by an approved collecting society to apply to the Nigerian Copyright Commission (NCC) to set up a panel to review such tariff. I am not aware that any member of BON has applied to the NCC to set up such a panel and the commission refused”.
Steam and Globe’s petition to NCC’s review panel is dated September 24, 2013. Over two months later, NCC is yet to respond or act.
As a follow up to its threat, BON has instructed its member stations (radio and television) to stop airing works of musicians that belong to COSON starting from December 15, 2013.
MCSN’s boss, Mr. Mayowa Ayilaran, noted that his organisation uses standard tariffs in billing users of musical works by looking at the extent of music in relation to the business, adding, “We open ourselves up to negotiations; we believe in partnership to progress. We don’t charge in lump sum; that will be unreasonable. Besides, we have monitoring mechanism; we have very good monitoring system. We check music logging to see what has been played”.
On threat of ban of Nigerian music on BON platforms, Okoroji said he found the idea laughable. He stated, “I woke up one morning to hear on radio the funny threat by the leadership of BON that broadcasting stations in Nigeria may no longer play the music of Nigerian citizens on Nigerian stations. Why? Because COSON is demanding that musicians be paid copyright royalties for the exploitation of their music, as is done in every country in the world.
“This thing may go up to the Supreme Court for a decision. Can anyone deny a Nigerian citizen the right to be heard on Nigeria’s airwaves? It is a fundamental human rights issue. The fact that you are given a broadcast license and frequency does not mean that you now own the airwaves.
“The airwaves continue to belong to Nigerians. The broadcast code issued by the National Broadcast Commission (NBC) that licenses broadcast stations in Nigeria is clear on that. Article 126.96.36.199 of the code says: ‘For the purpose of free-to-air broadcast, Nigerian music shall constitute 80 per cent of all music broadcast’. Is every broadcast station in Nigeria not bound by the broadcast code?
“Every September 1 when we celebrate No Music Day, we request the stations not to broadcast music for at least one or two hours? The usual response from them is that they cannot do without playing music for one or two hours on No Music Day. Now they want to give us No Music Year!
“Funny enough, BON is flexing muscles that they do not have. It was a ‘divide and conquer’ gambit. They expected that their announcement would cause heavy division within the music industry and that everyone will be running helter-skelter and this will erode the authority of COSON. Nothing I know has united the music industry more than this issue”.
Gladiators in the den
At the presentation, Okoroji stuck to the monopoly plank for copyright collective system. He argued that in the days of MCSN and PMRS, stations exploited the wrangling with the argument that they did not know who to pay to, and advised the two gladiators to go put their house in order first. Now that NCC, in its wisdom has done the needful, according to Okoroji, it would amount to retrogression to liberalise the sector since it wasn’t a business for profit in the first place. He said musicians would continue to suffer abuse and deprivations, as BON would continue to use ‘divide and rule’ style to deny artistes legitimate income from their intellectual property.
Apart from Okoroji, others on the side of COSON who attempted arguing for COSON did a miserable job of it. Artiste manager, Efe Omoregbe and Sunny Neji couldn’t quite advance arguments beyond saying liberalization posed a danger to collective rights management. Banky W., artiste and board member of COSON, came round to the MCSN and BON’s position on liberalisation, saying since monopoly seems a problem, the leveraging of technology should be employed to determine the music stations play and pay per song rather than lump sum imposition.
Bank W. also pleaded with the legislators to help the creative sector with laws that would benefit artistes and sued for transparency and openness among stations so musicians would not be short-changed again. He sued the legislators to ensure proper use of logging technology that was offered by a respondent for the good of musicians.
There were some interesting turns and twists in some presentations. Whereas NCC said one of the reasons it didn’t register MCSN was because it couldn’t produce 100 members that had signed or ceded their rights to it, Orits Williki displayed MCSN’s application that had, according to him over 1000 duly signed members. He further accused COSON of parading members on MCSN’s repertoire as theirs, saying that names being claimed by COSON were fictitious.
Daddy Showkey said although he didn’t sign his right to COSON, he was amazed to find his name on their list. Paul Play I.K. Dairo’s case is unique and probably calls for some criminal investigation. Whereas he didn’t sign or cede his rights to COSON, NCC’s sole rights manager, collected money from a telecommunication company and failed to remit the money to him. Mr. Dairo is now in court with the telecommunication company for paying COSON his money.
Boss of Disc Engineering Ltd, Mr. Bayo Banjo came down heavy on NCC and COSON for collecting monies they have no right, and decried their activities as illegal and criminal. He declared, “COSON collects royalties they don’t have right or repertoire. Monies COSON collects is fraud. When they came to me, as music user, I asked for COSON ‘s repertoire, they went away; they didn’t have any. There’s no difference between COSON and NCC; they have to be forced apart. COSON and NCC are pirates for collecting monies not meant for them”.
Flutist, Tee Mac-Itseli, also lent his voice to the liberalisation cause. He said thousands of dollars belonging to Nigerian musicians were now trapped in CMOs abroad as a result of COSON’s monopoly, and because it does not have bilateral agreements with any collective company outside Nigeria like MCSN, which usually collects such monies on behalf of Nigerian musicians and remit foreign artistes’ to CMOs abroad. Tee Mac said CONSON’s continuing monopoly, as rights collector would mean that Nigerian musicians would continue to be denied their legitimate earnings from overseas.
Kenny Ogungbe, Chief Ashamu and Charly Boy all sued for as many CMOs as possible as against a monopolist that does not even have the consent of rights’ owners.
Even more interesting was Chief Onyeka Onwenu’s position that thoroughly negated Okoroji’s. Until very recently, Onwenu and Okoroji had been bedfellows on the copyright fight. Right from PMRS’ days to COSON, the duo had been inseparable. But they have both fallen apart. According to Onwenu, “It’s been unending struggle that has been going on. If NCC should be an honest broker, laws against MCSN should also apply to COSON. COSON as constituted and being run is wrong.
“Tony (Okoroji) is chairman and Managing Director of COSON. COSON is one-man show and that is the problem. People like us were removed from COSON because we would not abide with practices going on in COSON. Members of COSON are not musicians, as witnessed in the last election. There’s serious politics going on in COSON. Why should chairman be so for life? I believe more than one CMO can be registered”.
Even on the registration of multiple CMOs, NCC’s D-G is not averse, although he was cagey about it, saying,, “NCC doesn’t have a problem with another CMO being registered to cover rights not under COSON”.
Possible agenda for NCC/Legislators
Perhaps, it was Hon. Opeyemi Bamidele who put issues in proper perspective, when he said no matter what NCC did, “you cannot stop MCSN from being registered”. And, like his colleagues in the joint committee, he advised MCSN to withdraw all pending cases in against NCC and COSON so the issues of liberalisation could be resolved legislatively, as being about the best way to go to ensure all musicians maximally benefit from their intellectual property.
Virtually every legislator saw NCC’s denial of MCSN from being registered as awkward. Same, too, for the third CMO that failed NCC’s litmus test. NCC’s D-G Ezekude and Okoroji’s citing of some African countries as examples of where only one CMO operates didn’t quite stick; they both sounded unconvincing. Ezekude’s citing of South Africa was even laughable; it seemed the D-G didn’t do his homework well, as that country has more than one CMO.
His major argument on why his predecessors didn’t deem it fit to register MCSN, including Adebambo Adewopo, a former counsel to MCSN, also seemed out of place. What is fair is for NCC to set the right parametres on how CMOs should operate and ensure a level playing field. It should ensure broadcast stations and other users of music have a log to avoid arguments and arbitrary charges by CMos.
Like it happened in the banking sector, NCC should set the issue of board membership and tenure of chief executives right. Messrs Ayilaran and Okoroji have stayed on the scene for far too long as sole heads of MCSN and COSON. This is part of Onwenu’s grouse. NCC should wake up to its responsibility as unbiased regulator and liberalise the environment; it should be a serious umpire and set standards of operations for whoever comes forward to register as CMO rather than perpetuate monopoly in a democratic Nigeria.
This also means that legislators should carry on this assignment with the kind of open-mindedness with which it heard all parties to the dispute. It should consider all memoranda submitted and even look outside Nigeria to see how it’s done with a view to making effective legislation that would give NCC room to operate properly and well above interests of its members. This way, the livelihood of Nigerian musicians would be assured and protected from abuse. That way also, government can begin to taste a bit of the action from taxes artistes must pay as citizens from earnings from their trade.