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Private Use on Musical Works, Rights of Public

Performance, and Collecting Society Systems.

By' Judge Visit Sripibool

share with an uplift to reflect the number of hours of music broadcast by Sky. In British Airways Plc. v. The Performing Right Society Limited,(292) British Airways ('BA') sought to alter its existing license allowing it to broadcast musical works to the passengers in its aircraft. BA argued that the current tariff should be reduced to reflect a reduced use of the music broadcast which had not previously been taken into account and PRS sought to maintain the status quo by arguing that the onus lay on BA to show that the current tariff was unreasonable. The Tribunal rejected the PRS argument that the onus lay on BA to establish the unreasonableness of the current tariff and after comparing the United Kingdom tariff to the tariffs imposed in other countries it decided that as BA provided an international product the tariff should be in line with whose of other countries. The Tribunal also altered the basis of the tariff, deciding that the royalty rate should take into account: I) a standard flat rate for the take off and landing music, and II) the number of passengers who were on flights where 'in-flight' entertainment was available.
It can be noted that each of the decisions outlined above was reached by the Tribunal in the exercise of a different jurisdiction involving a different industry and it is therefore not surprising that different detailed reasons were given to justify the royalty rate determined by the Tribunal. However, these decisions may be seen as revealing a common approach to collective copyright licensing, at least as regards the question of how far the royalty should be based on the user's revenue.
In AEI, the Tribunal accepted the PPL proposal that the closest comparable was with narrowcasting rather than with broadcasting, because with commercial radio broadcasting factors other than music commercial radio broadcasting factors other than music are largely responsible for earning the licensee its revenue from the broadcasts; for example, the contribution of the 'DJ' can be significant and can affect the numbers of people choosing one commercial radio station over another, thus materially affecting its advertising revenue. Consequently, the revenue earned by the radio station through broadcasting was not directly referable to the use of PPL's repertoire of sound recordings to provide music. With narrowcasting, however, the revenue earned through the provision of narrowcasting service was directly referable to the use of music provided by PPL's sound recordings, even allowing for any added value the narrowcaster might bring to that music by his skillful choice and compilation. Furthermore, with narrowcasting, as with the service AEI was providing, the music is the very essence of the service: there would be no service without the music.
In Sky, the music that is licensed has a different role to that in the service provided by AEI, because the music is merely part of a broadcast for a television programme rather than comprising the whole broadcast for a radio programme. Only a small part of Sky's revenue is in any sense attributable to the playing of music, because the service provided embraces services other than the exploitation of the right licensed by PRS. Further, that small part of the revenue is itself not capable of being separately identified. Having rejected the revenue basis the Tribunal considered the alternative put forward by Sky which amounted to a royalty based on the numbers of people watching Sky and therefore being exposed to the music. The Tribunal considered the essence of the Sky proposal to be acceptable, that is a royalty based on the extent of exploitation of the right. However, viewing figures alone were not an accurate reflection of the extent of exploitation, which should also reflect the amount of broadcasting, assessed by reference to matters such as the number of channels, the types of programmes and the hours of transmission. These factors were reflected in an uplift in the royalty.
In BA, neither party put forward a proposal on the revenue basis and the Tribunal did not choose to consider one either. Clearly, a royalty based on a percentage of BA's revenue would be wholly inappropriate for the exploitation of the right to broadcast music, since in-flight music plays such a small role in the service provided by the airline. It would be almost impossible to determine bow much of BA's revenue is referable to the playing of in-flight music. A royalty was set which was based upon a comparison with airline tariffs set in other countries and by an examination of the extent of exploitation. The Tribunal considered that a lower tariff was appropriate as being then assessed the extent of the exploitation to determine the new rate. The Tribunal determined that there were two parts to the exploitation of the right by BA. There was the provision of in-flight entertainment requiring the use of headsets and for this the Tribunal set a price per passenger and then calculated the number of passengers using this service. There was also the take-off and landing music which all the passengers on BA were exposed to and thus a separate standard price per passenger was added to the other limb of the royalty.
From the cases mentioned above it seems logical to use a revenue based royalty where the customer of the licensee can be shown to be paying an identifiable part of the consideration for the benefit of the right being licensed to the licensee. In such a case the customer of the licensee is paying for the exploitation of the right and little else, and the revenue generated by the licensee through the exploitation of the right, rather than through the provision of other goods or service, can more readily be separately identified. What else the licensee provides, such as equipment etc, will not usually be part of the assessed revenue on which such royalty will be paid, as was the case in the AEI. However, where the music merely enhances a business rather than being the service provided, such as in the Sky and BA cases, it is inappropriate for a royalty to be based on the licensee's revenue when so many factors other than the playing of music will contribute to that revenue. In such circumstances the Tribunal will not look to a revenue based royalty but will look to the extent of the exploitation of the right and decide what is a reasonable price per unit of exploitation, having considered the possible economic benefits of the music to the licensee. The precise unit of exploitation will vary depending on the business but it will be comprised of two parts. First, the extent of the use of the music, such as the number of hours the music is played in total and, secondly, the number of people listening or being exposed to the music.
Although these three decisions can be seen to be based on independent economic arguments they emphasize that in such cased of collective licensing of rights there will usually be two alternative bases on which a royalty may be determined by the Copyright Tribunal: revenue or the extent of exploitation of the right granted. Which basis is chosen will depend upon whether or not the revenue earned by the licensee is directly referable to the licensed act and is also separately identifiable in the hands of the licensee. It if is, or is sufficiently so, then a revenue based royalty should be the favoured bases, particularly in view of the difficulties which the Tribunal invariably faces when it seeks to explain the value which it places on a unit of exploitation.
In the area of educational institutes, sometimes there are disputes between universities and collecting societies on the issue of the fee rates. In 2001, in the United Kingdom, there was an interesting case(293) in this topic. The Tribunal concluded in many issues. That is, it was impossible to base any quantitative conclusions on page of textbooks or any other document within the scheme of licenses to calculate the fee rates, the true economic cost was a useful indicator but was not necessarily the direct route to the royalty rate. It may be more relevant to consider the retail price of the book and the value to the student. The material likely to be copied under the schools' license was different. School books were much cheaper than university books. So the royalties were altered.


From all materials abovementioned, a conclusion may be difficult to do so, if necessary, it would summarize in the way of factors in the present age. At present, the society is global not rural. Domestic economic system is no more existing. The global economic system is overwhelmed all. The economic rights come first. The notion of rewarding the discoverer or creator for giving society a useful thing is ancient.(294) The school of thought of public right may be obsolete.(295) Nothing is absolutely free.

Private uses on musical works are in trends to be strictly construed. Public performance on musical works in restaurants, cafes or shops, even small of spaces, may have to pay fee to the copyright owners or collecting societies. The exception will clearly be provided by laws. No pay, No rights. As M. Bourget said "you consume my music, I consume your wares".(296) However, In some regards, there is a critical question, that is, the all owners' rights in the scope of the copyright laws are the exclusive right or the remuneration rights.(297)

Limitations of exclusive rights, fair use, fair dealing, exhaustion of right, homeuses and others, may finally be interpreted by courts in the narrow meanings, or any exemption will ostentatiously be provided by laws, otherwise no limitations can be raised.

Music seems to be freely available but it is not free. Music is created and owned by somebody and that somebody, be it a composer, songwriter, lyricist or music publisher, has a right to ask for payment.(298) Therefore, normally, the users inevitably have to pay royalties to the rightowners.

At present, the collecting societies, the new, or rather no longer so new, information technology of digitalization and network communication has radically changed the landscape of copyright collecting societies. They do not need any longer to be collective, not in their tariffs and other conditions, nor in their offer of global repertoires and nor in the allocation of royalties. User contracts can be completely individualized and so must repertoire and the distribution of royalties.(299) Especially, in the light of the requirements arising out of the digital environment, it is necessary to ensure that collecting societies achieve a higher level of rationalization and transparency with regard to compliance with competition rules.(300) They will have to develop into completely neutral intermediaries between two parties in the market, rightowners and users.(301)

On the basis of the exclusive exploitation right the collecting society can place a supplementary copyright on the market.(302) However, the royalty rate must be reasonable compensation for the copyright owner and also reasonable for the user to pay.(303)

It is important to realize that the collecting societies in each country have been established within a particular legal, cultural and economic context. Therefore how is the best system of the societies would consider all factors of context of each country.


(292) Interim Decision, January 12, 1998.

(293) Universities UK v. Copyright Licensing Agency Limited, Decided by the Copyright Tribunal 13 December 2001, Intellectual Property Decisions, Informa Law, March 2002 vol.25 no. 3.
(294) Anthony D' Amato, Doris Estelle Long , International Intellectual Property Law, Kluwer Law International, 1997 at 27.
(295) Id. at 28-39.
(296) Ernest Bourget, a French composer of popular musical chansons and chansonettes comiques. He said in 1847, and he won before the Tribunal de Commerce de la Seine. Martin Kretschmer, The failure of Property Rules in Collective Administration: Rethinking Copyright Societies as Regulatory Instruments, European Intellectual Property Review, 2002 at 2.(Westlaw)
(297) See Schonning, supra note 133, at 971.
(298) The leaflet released by The Performing Right Society (PRS) March 1993 at 3.
(299) See Jehoram, supra note 186, at 7.
(300) Id.
(301) See Id, at 6.
(302) G. Basset v. Societe des Auteurs, compositeurs et Editeurs de Musiue (SACEM),[1987] 3 C.M.L.R.173.
(303) See Id, supra note 283.