Articles Legal News Thailand Lawyer Links Home

Private Use on Musical Works, Rights of Public

Performance, and Collecting Society Systems.

By' Judge Visit Sripibool

3 A fee based on admission receipts
4 A fee based on profits
5 A fee based on the number of persons admitted
6 A fee based on gross revenue a year

Royalties based on gross revenue year of a licensee may be difficult to calculate. In case of the licensee granted from the collecting society have own chain stores or so called "licensee's customers" such as in a dubbing company who re-records sound recordings onto cassette tapes and compact discs and hiring out the tapes and CDs for the purposes of providing background music in places such as public houses, restaurants and chain stores. It is much more difficult to calculate.(253) However, the royalties collected from the gross revenue is always not the gross revenue of the premises. Sometimes it means the gross revenue of the copyrighted items of the collecting society licensed, such as the royalties are to be 15 per cent of the gross revenue receivable from the hire of tapes and 17.5 per cent of the gross revenue receivable from the hire of special compact discs.(254) However the royalties based on gross revenue year only mean for use of the society repertoire.(255)
7 A fee calculated by a machine
This system is so-called 'levy system'. However, the levy system calculate by the machine is not suitable for the musical work. Most of uses the levy systems are used in the field of reprographic or photocopying. The first country to introduce this kind of a levy system was Germany in 1985. The levy is paid for photocopying machines, fax machines, reader printers and scanners. The levy is paid by the manufacturer or the importer of the equipment. In addition, a so-called "operator levy" is paid by large scale users, such as schools, universities and copy shops. The tariffs are determined by the law. Germany, Spain and Belgium are examples of countries with the levy system.(256) Reproduction for private use is a special case and falls normally outside direct licensing schemes.(257)

Notes for Royalties

1 the rates of royalties can be obviously fixed to public to be easy for customers.(258) Setting rates must not be unreasonable discrimination between licensees.(259)
2 The term of licenses, normally, is three or four years.(260) However, terms and rates said in contract can always be reviewed.(261) Each review will, naturally, take account of rates that have been set during the year in other comparable licenses.(262)
3 Normally, if the users or licensees feel that the royalties are unreasonable rates, they can always bring a case to be reconsidered by the Copyright Tribunal.(263)

Royalty Rates for Compulsory License

In general, the rates of compulsory licenses would not be set directly by government. The rates would be the result of bargaining between collective societies and an organization of users. The obviously fixed tariffs would be used in general.(264)

Royalty management

The further interesting point of the collecting society systems is that the royalties collected by the societies how will be managed. Normally, most of societies are the limited companies. They are the entities provided by laws. They have own shares, shareholders and own staffs. They have to make profits for themselves, and at the same time, they have to distribute the royalties to their members. How would be the best for the right owners who are the members of the societies. Do not forget if rightowners wish to be represented by a collecting society, they typically have to assign all rights in the relevant domain.(265) After the rightowners sign a contract with the society company, all of their rights, if no "cherry pick" reservation, they have no rights on their works. They can only wait for a remuneration given by the society company. So the royalty management by the company would be interested by the right owners. After looking around the European countries and the United States, the types of royalty management can be summarized as below;
1 In Germany, the performing right the composer will receive 8/12, the publisher 4/12 of collected license fees, minus administration costs and deductions of 10 percent


Page 19


(253) Phonographic Performance Limited v. Candy Rock Recording Limited, [1999] E.M.L.R. 155.
(254) Id. at 5.
(255) PRS v. Boizot, [1999] E.M.L.R. 359.
(256) See Koskinen-Olssen, supra note 214, Id.
(257) Id.
(258) The Performing Right Yearbook 1983-84, Published by The Performing Right Society Ltd (PRS), at 99-102. In the UK, PRS is one of the most influence collecting societies. In 1993, it has more than 750,000 composer members (PRS's leaflet printed in March 1993). It has royalty rates so called "Tariff". The tariffs can be classified to be 12 tariffs, as follows: Tariff BO uses for Bingo Clubs and Halls. It calculates the royalty up to the days of performance per year. The minimum rate for annual royalty is 34.50 Pounds Sterling. The maximum rate for annual royalty is 57.50 Pounds Sterling. Tariff C uses for Cinemas. This tariff covers performances in commercial cinemas as follows: a. by means of film sound tracks, b. music for intermission and 'play out' purposes, c. the relaying to a cinema foyer of the music audible in the auditorium. The royalty is calculated as a percentage of the licensee's gross receipts from the box office (including the VAT element), the percentage chargeable being 0.575% except where the annual

gross receipts do not exceed 22,000 Pounds Sterling, in which case the percentage is 0.425%. Tariff E & H uses for Restaurants, Cafes & Hotels. The royalty Tariff E used for 'Featured' Music: dances, discotheques, etc is calculated according to licensee's annual expenditure. The minimum rate is 1.5% on annual expenditure. The maximum rate is 5%. The Tariff H used where the licensee's annual expenditure on "live" musical entertainment is less than 3,500 Pounds Sterling: for "live" or mechanical performances at dances, banquets and similar functions: 2.45 Pounds Sterling per day per 100 persons, for other "live" performances: 3.51 Pounds Sterling per year per 5 persons seating capacity for each day of the week on which performances take place. For 'background music' tariff H is calculated as a numbers of seat in the premises, including as a instrument such as a record player alone or with radio and/or television alone. The minimum rate is 6.14 Pounds Sterling per annum. The maximum rate is 28.60 Pounds Sterling per annum. Tariff G used to Village and Urban Halls. This tariff covers performances at dances, socials, concerts, film shows, etc. at non-commercial halls. The rate of charge per entertainment are: entertainment at which music constitutes a major role, e.g. dance or concert: 85.12 pence per capacity unit of 100 seating or 50 dancing (or part thereof). Other entertainments i.e. those at which music is only incidental: 42.56 pence per capacity unit or part thereof. Tariff l uses for Factories, Offices & Canteens. This tariff applies only to Background Music provided for employees in factories, etc. The basic rates of charge are: In factories, works, offices and similar premises 2.04 pence per day for each half-hour of performance for each unit of 25 employees, the royalties being calculated be reference to the number of employees to whom the music is audible. In canteens associated with the above places 4.08 pence per day for each unit of 25 employees. Tariff J uses for Clubs. For a featured music: a "live" performance if the licensee's annual expenditure in providing musical entertainment is 2,000 Pounds Sterling or more, the royalty is 2% of such expenditure. Otherwise performances are charged for at fixed rates, based on the average number of days performances per week e.g. 46 Pounds Sterling per annum for performances on 3 days per week. For a recorded music the rates of charge are 1.15 Pound Sterling per 100 persons per day if there is no "live" music, 57.5 pence per 100 persons per day if the is also "live" music. The Background Music, annual charge for performance by means of radio only is 23.00 Pounds Sterling, television only is 23.00 Pounds Sterling, radio and television is 34.50 Pounds Sterling, record-player only is 51.75 Pounds Sterling, record-player with radio or TV is 57.50 Pounds Sterling, and record-player with radio and TV is 69.00 Pounds Sterling. Tariffs JB & JV use for Juke boxes at all types of premises. The audio juke boxes, the basic annual rate of charge is 61.86 Pounds Sterling per juke box. The Video juke boxes , the basic annual rate of charge is minimum from 68.05 to maximum 86.60 Pounds Sterling. The rates will be charged higher from the said minimum if the screen is larger than 26". Tariff M uses for Municipal & other Local Authorities. There are three types of rates of charge. First, where the licensee provides or promotes entertainments or functions with music performed by live performers, a percentage of the Gross Expenditure in each license year of which has 6 stages of calculation up to each step of expenditure that the percentage of charge varies from 1.25 % to 2.50% of the expenditure, starting from the first 2,500 Pounds Sterling, the next 2,500 Pounds Sterling, the next 5,000 Pounds Sterling and further respectively . Second, where the license lets, or otherwise places at the disposal of another promoter of such entertainments or functions, premises in their ownership or under their control: 5% of the Gross Receipts. Third, the tariff also contains a scale of charges applicable to performances by mechanical means in parks, promenades, pools and other open air places. Tariff P uses for Public Houses. For featured music, for occasional and spontaneous piano performances by customers are approximately 23.77 Pounds Sterling a year. If the licensee's expenditure is 20,000 Pounds Sterling or more a year, the royalty is 2% of such expenditure. All other featured performances, whether live or recorded or a combination of the two, are charged at the per session rate of around 1.30 Pounds Sterling. For background music, annual charge is quite similar to the background music of theTariff J. Tariff RH uses for Residential Hotels, Boarding Houses & Guest Houses. For featured music, where the entertainment is restricted to restricted to residents: 63 pence per day for each 15 bedrooms. At dance, dinner dances, banquets and similar functions: 2.45 Pounds Sterling per day per 100 persons in attendance. For background music (for residents only), television and/or radio; 9.54 per year per 15 bedrooms. Record/tape player, with or without radio and/or television; 21.43 Pounds Sterling per year per 15 bedrooms. Tariff RS uses for Retail Shops & Stores. Background and demonstration music, performances by mechanical means such as record/tape player, radio or TV etc.:29 pence per annum per square metre of the area in which the music is audible to the public up to 23 square matres. Thereafter, a descending scale of charge applies, performances by video and similar audio-visual equipment: where these performances take place for the purpose of securing sales of video tapes, or video or other audio-visual equipment, in premises where such items are sold, the foregoing rates apply, "live" performance performed by staff or customers only: 11.20 Pounds Sterling per annum. "Pavement" music 11.20 Pounds Sterling per loudspeaker. Special Shopping Weeks, there are also special rates prescribed for special shopping weeks, Father Christmas shows or other special Christmas attractions and for fashion shows. The rates of charge are subject to annual adjustment in January each year. Tariff T uses for Theatres. For overture, Entr'acte and exit music, permanent repertory theatres: 44.63 Pounds Sterling per annum. Provincial and London theatres: up to 1,000 seats: 80. 33 Pounds Sterling per annum, over 1,000 seats: 113.05 Pounds Sterling per annum, etc. Incidental or Curtain Music, permanent repertory theatres: 2.83 Pounds Sterling per week, etc. (These data is shorted from the yearbook abovementioned. Which was in 1984. Therefore these may not be up to date in factual details. But it can be shown on the system for the rates of royalties fixed by the collecting society.)
(259) See Phonographic Performance Limited, supra note 244, at 8.
(260) Id. at 12.
(261) British Airways Plc. v. The Performing Right Society Limited, Interim Decision, Decided by the Copyright Tribunal, January 12, 1998. United Kingdom.
(262) See Phonographic Performance Limited, supra note 244, at 8.
(263) See Boizot, supra note 255, Id.
(264) See Jehoram, supra note 186, at 3.
(265) See Kretschmer, supra note 4, at 9.