This chapter critically examines the value of and the business of music around the world with particular attention on Nigeria. It expatiates on the importance of a strong legal framework for the music industry. It also focuses on copyright works in the music industry and the fact that some of the exclusive rights cannot be administered individually hence the need for collection societies. The chapter considers the decisions of the Supreme Court on locus standi of the Musical Copyright Society of Nigeria (MCSN), the approval of the Musical Copyright Society of Nigeria as a collection society1 and the suspension of the Copyright Society of Nigeria's (COSON) approval. Due consideration is given to the law and international practices. The chapter is concluded by making the case for change2 that includes definitive actions by the Nigerian Copyright Commission (NCC), the use of technology and other workable options designed to contribute to the administration and sustainable growth of Nigeria's music industry thus enabling it to compete on the global stage.
Section I: The business of music
A world without music is unimaginable. Afrobeat, highlife, gospel, country, afrobeats, RnB, classical, soul and yes K-Pop are just a few of the genres of music we all enjoy listening too. But music is much more than what we hear and watch. The artist performing the song is literally just the tip of the iceberg. Behind that performance is an entire business and industry worth billions of dollars. There are entire armies of people involved in everything, including: production, distribution, exploitation, finance and advisory. Not to mention the users of music which include audio-visual producers, the radio and television stations, online content distributors and consumers like you and me. Regulators such as NCC, industry associations3 etc. must not be left out.
The unseen backend makes up 90% if not more of the music industry. It includes talent spotters, artiste/performers, composers, conductors, musicians, sound engineers, recording engineers, producers, music publishers, agents, personal and business managers, talent management agencies, promoters and organisers of events, artiste & repertoire men, record labels, media (traditional and social), P.R, sales and marketing, hospitality and advertising, music journalists, media houses and broadcasters, accountants, lawyers, sponsors, financers and bankers, tax consultants etc. Consider also the hardware and software developers, online services, etc., makeup artists, designers and costumers, assistants, secretaries, messengers, drivers, chefs and many more.
Music is not just something we enjoy, it has cultural significance and inspires us. It creates employment and labour, drives economic growth, and fosters innovation. For the music industry to survive and thrive, its value must be recognized. Public policies must recognize that music has a value - cultural and economic alike - and that creators have a crucial role to play. Whether in international trade agreements or royalty proceedings or otherwise, policies must reflect these fundamental principles4 .
A peep into the value of Nigeria's music industry IFPI reports
According to the IFPI Global Music Report 2019:
- The recorded global music revenues for 2018 was USD19.1bn with market growth of 9.7%
- The growth was predominantly driven by a 32.9% rise in paid streaming revenues that now accounts for 37.0% of total revenue.
- Performance rights revenues5
- use of recorded music by broadcasters and public venues had grown in 2018 by 9.8%, totaling USD2.7bn
- Performance rights revenue represents 14% of total recorded music industry revenues.6
IFPI and Nigeria
In its 2017 Global Music Report, IFPI7 described Africa as an emerging market. Special mention was made of Nigeria, as enjoying a resurging market driven by CRBT8 , flourishing live performances, the penetration of smart phones and greater internet access. The 2018 and 2019 GMR IFPI reports are silent on Africa in general and with no mention of Nigeria.9
PWC's entertainment and media outlook: 2018 - 2022, an African perspective10
Working with data captured from Nigeria in respect of physical, digital (downloads, mobile and streaming), total recorded music (live music ticket sales and live music sponsorship) and total live music11 this report provides:
- Total Nigerian music revenue for the following years was
- 2013 - USD26 million
- 2014 -USD27 million
- 2015 - USD29 million
- 2016 - USD31 million
- 2017 - USD35 million
- As with the recorded global music the importance of digital technology in Nigeria's music industry must be highlighted. In 2013, USD12 million was generated from digital activities and in 2017 this grew to USD24 million.
- Working with the same data, projected revenue for the following
- 2018 - USD41 million
- 2019 - USD46 million
- 2020 - USD53 million12
- 2021 - USD59 million
- 2022 - USD65 million
Some experts do estimate that the projected earnings for 2020 should be more. However, until there is more comprehensive data, we have to rely on what is available from reliable sources. While the figures seem pale in significance to global earnings, it does give a sense of the value of Nigeria's music business and its current and potential growth trajectory.
So how is some of this money that adds to the value of the music business made? This is where music publishing and collection societies play a major role. Music publishing is the activity of:
- promoting and licensing the performance and publication of musical works or compositions;
- administering the legal protection of the compositions and the collection of incomes arising from such promotion and licensing; and
- paying the songwriters their share of the collected income.
In essence, the music publisher helps the copyright owner generate revenue and income from his or her music. A publisher helps to promote, exploit and administer a composer's works and share the monies due from their exploitation (this with the assistance of the PRS and possibly the MCPS13). Historically a music publisher's main source of income was from the sales of sheet music. With the evolution of technology, the primary sources of income for musical compositions has also evolved. As we will see further in this chapter, not all uses or rights can be conveniently administered, licensed or exploited by the owner of the copyright and the publisher.
Publishing revenue from collection societies14
The world of music publishing operates to a large extent with an interwoven network of collection societies i.e. the publishers work with the collection societies. You have collection societies that collect different parts of the income stream due to composers and publishers. The income is from performing rights (radio, television, film, touring) and income from mechanical rights payable by record labels from the sale of recordings (digital, physical, streaming) containing the copyrighted works of songwriters and publishers.
Collection societies have existed since 1852 with the birth of SACEM, the French Performing Right Society. As noted earlier, the importance and revenue generation of the collection societies can be quite significant.
- In the U.K. PRS for Music
- 2016 - Total revenue was GBP625.8 million15 and royalties paid to owners16 of the works was GBP527.6 million
- 2017 - GBP716.8 million17 and royalties paid to owners was GBP605 million
- In Nigeria18
- In 1994 Musical Copyright Society of Nigeria (MCSN) collected USD88,00019 (USD36,397 from broadcasts and USD38,517 from performances)
- Between 2198 and May 2019, COSON disbursed NGN8,520,000.00 and approved the sum of NGN40,000,000.00 respectively.20
While there is a significant disparity between the revenue of the UK collection society and that of Nigeria, the figures reflect the viability and potential of collection societies in the copyright ecosystem.
Internet and mobile phones
The music industry has historically profited from the introduction of new forms of exploitation and advances in technology. For example, the introduction of digital (as opposed to analogue) sound recordings in the form of compact discs was responsible for the increase in the industry's revenues. Perversely, the ubiquity of the compact disc digital recordings combined with the widespread use of personal computers and the connectivity provided by communication networks (primarily the internet) threatened and challenged the music industry and the legal framework within which it operates21.
From the figures highlighted in earlier sections of this chapter, it is apparent that digital technology in terms of increase in mobile phones and greater access to the internet, has made its impact on the music industry and cannot be ignored22. We have seen the rapid expansion of different services elbowing one another to dominate the online music market. The most recent data from the Nigerian Communications Commission supports the evidence of the continued growth of digital sales in the music industry. In 2018, the Nigerian Communications Commission reported that internet users had risen to 111.6 million23. It was also reported that the number of phone users had risen to 144 million.24
With the continued growth of mobile phone users and access to the internet, CRBT25 has become a viable source of revenue for the music industry generating income for the artists/owners of the copyright in the works/songs, the agents, the telcos etc. However, in 2018, the Nigerian Communications Commission banned the telcos from direct marketing of songs. The inability to market has impacted on revenue generation. It is argued that there are more practical ways to address the 'nuisance' without significantly impacting on what had become a viable revenue generator for the industry.
Foreign direct investment
The importance of the figures from the Nigerian Communication Commission are better appreciated when one considers how music streaming company Transnet Music Ltd's app26 - Boomplay Music - has become the largest music streaming and download service in Africa. By partnering with its parent company, Transsion, the manufacturer of the popular phones - Infinix and Tecno, Transnet installed the Boomplay Music app on its phones. Since its launch in Nigeria in 2015, Boomplay Music now has 46 million users across Africa. It boasts of an impressive catalogue running into millions and its distribution deals with Universal and Warner have also improved Boomplay Music's appeal. Recently, Transnet concluded a USD20m fund raising. Its 2018 Nigerian report shows 10m registered users, 5 million monthly active users and 1.6 million daily active users. Fuelling Boomplay's growth is the increase in the number of phone owners and internet users.
Earlier this year, Kupanda Capital entered into what was a landmark deal in Nigeria's music industry when it invested in Mavin Records. This was followed shortly by the announcement of Warner Music's27 investment in Chocolate City. Mavin Records and Chocolate City are two of Nigeria's foremost record labels.
These investments reflect the potential in the music industry and growth for the economy.
Our talent on the world stage
Not to be left out, 2019 has been an amazing year for Nigerian talent. Four time grammy nominee - Femi Kuti was one of 3 African artists selected to compose and perform the theme song Metgamaeen (We are Together) for the 32nd edition of the 2019 Africa Cup of Nations.
On the 24th of June 2019, Burna Boy, won the coveted Best International Act award at the BET. The Walt Disney Pictures film Lion King premiered on the world stage in July of 2019 and the soundtrack album featured no less than 5 Nigerian artistes - Tiwa Savage, Yemi Alade, Mr Eazi, Tekno and Burna Boy. A number of Nigerian Gen Z talent (artistes, composers, engineers, etc) are being courted by global record and publishing companies seeking to exploit their talents via production, distribution, publishing and management deals.
In conclusion of this section, there can be no doubt about the vibrancy of the music business and all efforts must be deployed to ensure its survival28.
Section II: Copyright and the music industry
For music to thrive29
Creativity, investment in artists and innovation in the ways that music is distributed are best supported by adequate legal frameworks. Copyright and related rights is the bedrock on which the music industry is built. A legal framework that is both balanced and clear must be in place to allow everyone to understand how music can be used. That framework must give rights holders30 an adequate level of protection through exclusive rights, whilst allowing, in appropriate cases, clearly defined and targeted exceptions to those rights. Open-ended or 'flexible' exceptions, seen in the laws of a handful of countries, do not provide a sustainable solution. Instead, they create uncertainty, are open to abuse and ultimately undermine the balance in the copyright frameworks31. It is with this in mind that we consider copyright and the music industry.
Introduction to copyright32
Copyright is one of the three main branches of intellectual property law, along with patent law and trademark law. Overshadowed for much of its history by the greater economic worth of patents and trademarks, at the beginning of the twenty first century, copyright has overtaken both in economic importance. Music is a work protected by copyright and the figures provided in section 1 reflect the contribution to the economy.
Copyright is the term used in English speaking countries to describe the bundle of rights that are granted by statute for limited periods of time and subject to certain permitted exceptions, in respect of literary, musical or artistic works, such as novels, plays, poems, musical compositions, paintings, sculptures, as well as of sound recordings, films and broadcasts33. These are proprietary rights, giving the owner the right to do and to authorize other persons to do the acts restricted by the copyright law.
The law of copyright, originally conceived to provide protection against unauthorized reproduction of books, faces unprecedented challenges from the accelerating pace of technological innovation. In the modern world, the law of copyright provides the legal framework not only for the protection of traditional beneficiaries of copyright, the individual author, composer or artist but also for the investment required for the creation of works by the major cultural industries, the publishing, film, broadcasting and recording industries, and the computer software industry. Since copyright gives the owner the exclusive right to authorize or prohibit certain uses for his work by others, it is central to providing right owners with some element of control over the exploitation of their works in the new global networks of the information age.
Nigeria's copyright law and the music industry
THE LAW AND COPYRIGHT WORKS
Copyright in Nigeria is governed by the Copyright Act34. By virtue of the Act35, works36 relevant to the music industry and listed as being eligible for copyright include:
- literary works (lyrics and compositions for songs);
- musical works (musical notes/instrumental accompaniment);
- sound recordings (the masters); and
- Broadcasts (the actual transmission)37.
The identity of the author of the work is important for several reasons:
- Usually, the author is the first owner of the copyright38 or if he is employed, his employer may be39;
- Duration of the copyright is usually measured by reference to author's life40;
- Author is entitled to moral rights41 (i.e. the right to claim authorship of the work) in his work and this is perpetual, inalienable and imprescriptible; and
- Author is usually the creator of the works.
The author in respect of each work eligible for copyright protection is defined42 by how the work is actually created. Thus author in:
- literary and musical works: which are lyrics and notes is usually the composer or producer.
- broadcast: which in this sense is the transmission is usually the radio or television station.
- sound recording: which are the masters on which the song is recorded is usually the record label unless there is an agreement to the contrary with the artist.
These distinctions help one get a better sense and understanding of the different classes of authors/owners.
THE EXCLUSIVE RIGHTS OF THE OWNER
Copyright is a statutory property/interest which allows the owner the exclusive right to undertake and authorise others to undertake a number of activities in relation to his work. The rights of the owner may be described as exclusive rights to authorise others to use the protected works. The right of the copyright owner to exclude others from making copies is the most basic right and this is known as the reproduction right. The Act expressly provides for the exclusive rights43 in respect of the different works and there are certain exceptions44. There is no real need to delve into the details of these rights at this time.
Ideally these rights are exercised on an individual basis by agreement between the copyright owner and the individual user of the work and there are many cases in which the rights continue to be exercised individually45. It should be further noted that it is these individual rights that are assigned and or licensed to collection societies. As noted earlier, the evolution of technology in the exploitation of music over the years has made it difficult, if not impossible, for users and owners of the musical works to contract as required under law. Hence the need for collection societies.
Section III: Collection societies
The Need for CMOs
Ideally the creator of the music should personally manage and administer the use or exploitation of the rights in the music. Copyright is the right of an individual and in most cases that right should be exercised as the creator decides or authorises46.
However, the owner of the copyright in a song or sound recording can never know whenever it's being played in the shopping malls, restaurants, stadiums, nightclubs, on radio stations etc., around the country. Clearly, the exercise of rights on an individual basis in respect of works which were intended for wide scale public performance such as plays and musical works is not possible.
When one considers the volume of songs played on radio stations, on an annual basis, or what is played in any of the venues mentioned above, it is neither practical nor feasible for the owners of these venues ("users") to approach all the copyright owners for each of the songs or sound recordings and secure the requisite licenses for use. The cost for such an exercise would also be prohibitive to such users and they are unlikely to bother.
Some true stories47
The year is 1847 and Ernest Bourget, Paul Henrion and Victor Parizot, three of France's most celebrated composers were sitting in the leading cafe? of the day, Cafe? des Ambassadeurs, listening to their compositions being played live. The composers were angry that the live performance of their music in the Cafe? helps to attract customers and patronage and increases its revenue but refused to pay them for the performances of their compositions. At this point it would be good to remember the technology available at that time to listen to music which was live performances. The composers decide not to pay the bill and a trial ensued.
This true story marked the beginning of a landmark trial of its day that resulted in: (a) a court judgment declaring the legal rights of owners in the public performance of their music; and (b) the formation of the first collection management organisation for public performance rights in non-dramatic works i.e. SACEM.
Performing Right Society (PRS) formed in 1914 and the Mechanical Copyright Protection Society (MCPS) formed in 1924. PRS takes an assignment from its member publishers and composers of the right to perform their works in public and the right to communicate their works to the public. MCPS also represents writers and publishers and this is in respect of what is known as the mechanical right i.e. the right to make copies of a musical work. This right is exercised when a record company makes a CD or when a TV producer makes a programme including music.
In the U.S., there is ASCAP48 which has similar origins to that of SACEM49 and it represents the interests of its members namely composers, authors and publishers in performing rights. In 1940, in anticipation of a breakdown in negotiations with ASCAP over the rates to be charged for the following year (evidence of monopolistic behaviour which is discussed later on), a group of broadcasters including major radio networks and nearly 500 independent radio stations established BMI50. BMI is a credible alternative to ASCAP and is an automatic performance royalty earning machine for songwriters and publishers51.
With new technologies, the role of the collection societies only continued to evolve and increase. With the invention of gramophones, radios etc., it became necessary to form more collection societies to represent the owners of sound recordings (record labels) and rights in broadcasts. Collection societies like the U.K.s PPL52 was formed in 1934 and represents the interests of record labels. It licenses the performances of music embodying musical compositions i.e. the public performance and broadcasting of the sound recording (a different work to that of the musical composition).
Operations of the CMO
The CMOs have the power to license (on behalf of copyright owners) rights in copyright works to users. The revenues generated53 from these licenses are, in turn, distributed to the members of the CMOs, who are the copyright owners. The copyright owners usually assign or licence their rights in the works to the CMOs, who will administer such rights, on their behalf, to users.
In the light of the fact that CMOs have control over huge repertoire of copyright works, they weigh enormous power in the music industry, and are usually in a good position to negotiate acceptable license terms and fees (on behalf of their members) with record labels and publishing industries.
The principle of reciprocity
From the early 19th to early 20th century, different countries began to form collective management organisations/collection societies. Reciprocal agreements were signed by these national collection societies so that they could represent each other's repertoires.
Most established collecting societies belong to international networks, consisting of federations of societies representing the same categories of rights owners and which enter into reciprocal representation agreements for the exercise of rights in their respective members' repertoire. Thus, one collecting society in any given country is able to represent both foreign and national rights owners within its territory and to license practically the entire world repertoire of the rights owners it represents; at the same time a rights owner will be able to exercise his rights and receive royalties when his work is used abroad54
For instance, PRS works in close association with similar bodies outside the UK both in licensing those bodies to collect royalties in respect of the works administered by the PRS when they are performed outside the UK and also in collecting performing right royalties in respect of works performed in the UK, but which are owned by the foreign societies55.
It is generally agreed that such collective administration bodies provide the best available mechanism for licensing and administering copyrights and is to be encouraged wherever individual licensing is not practicable. They represent the best means of protecting the rights owners' interests, enabling copyright owners to license and monitor the use of their works to collect and distribute royalties, and to bring actions for infringement. At the same time they facilitate access to copyright protected works for the consumer and minimize the number of persons with who users must negotiate licensing contracts.
The convenience offered by such bodies both to the owner and user of copyright cannot be matched by any other means and, in their absence, in a totally free market, individual users and copyright owners would be at a serious disadvantage in negotiating and subsequently enforcing contractual arrangements for the exploitation of rights. Thus, collecting societies make the copyright system more efficient and effective, promote the dissemination of works and tend to enlarge the choice of works made available to the public. They benefit rights owners and users alike and in principle operate for the benefit of the public.
Ghana and South Africa57
Ghana and South Africa both have collection societies administering and managing members' rights in their respective music industries58. In the two countries, the majority of owners of the works are members of the collection societies. These societies are considered licensees and administrators of the works for the duration of their members' membership. These societies have also executed reciprocal agreements with similar societies all over the world allowing them to collect royalties on behalf of their members around the world. While there may complaints about insufficiency of royalties paid, on the whole the collection societies in these two countries, are functioning well and as intended, serving their members' needs within the regulatory framework.
Section IV: Nigerian Law
At the time of its promulgation in 1988, there was no provision in the Act for collection societies. It was in the first amendment in 199259 that provision and requirements were made for the establishment of collection societies60. For the purposes of this chapter, there are two key provisions to highlight:
- Approval from NCC is required before a body corporate can operate as a collection society. It is a pre-condition before operations can begin.
- NCC shall not approve another collection society in respect of any class of copyright owners61 if it is satisfied that an existing approved society adequately protects the interests of that class of owners62.
By the second amendment in 199963, the right of action of collection societies was effectively limited64. Accordingly an entity acting as a collection society does not have locus standi i.e. the right to institute a cause of action/law suit in respect of infringement or any other right it purports to be assigned or licensed65 unless it has been approved by NCC66. This has become the subject of much litigation some of which is narrated below.
The battle for legitimacy
The history of collection societies in Nigeria's music industry is well documented67. MCSN (formerly PRS) and COSON (formerly PMRS) have been battling for legitimacy for years. Issues relating to awareness, membership, NCC approval, confusion, loss of monies, legal framework and interpretation thereof, litigation, suspension, and flouting of the law etc. have contributed to a most unfortunate state of affairs regarding these collection societies. None of this has been in the public interest and to the detriment of the development of the copyright ecosystem, owners and users alike. Unlike other countries on the continent, the fundamentals of collection societies in Nigeria are still being grappled with. This has created a distinctly unpalatable situation and one has to question why it is so.
On 13 July 2018, the Supreme Court delivered its judgment in Adeokin Records & anor v. MCSN. The pre-trial issue for determination by the court was whether MCSN had the legal capacity to sue for copyright infringement without prior licence from NCC. It is pertinent to note that the Adeokin case was instituted in 1996 which was:
- AFTER the first amendment to the Act in 1992 which made it mandatory for NCC approval before a collection society could legally operate; and
- BEFORE the second amendment to the Act in 1999 which imposed a limitation of action on collection societies instituting legal action in respect of infringement.
It is a notorious fact that despite the provisions of the Act and in flagrant disobedience of same, MCSN acted as a collection society without the requisite approval of NCC69. Indeed the cause of action in the Adeokin case arose after it became mandatory for a collection society to secure approval from NCC before it could act as one70.
The judgment was to the effect that:
- To determine the issue of locus standi, the court is to restrict itself to the Plaintiff's statement of claim;
- The action arose before the amendment in the Act71;
- Locus standi is a matter of law and not one of fact;
- The Act makes provision for the owner, assignee and exclusive licensee of copyright
- The defendant admitted that MCSN sued as an owner, assignee and exclusive licensee of Copyright;
- Thus, MCSN did not need the pre-condition approval from NCC to sue;
- Accordingly, MCSN could validly sue as owner, assignee and exclusive licensee of copyright; and
- The matter was referred back to the High Court and trial to start
This was followed by another judgment of the Supreme Court on 14 December 2018 in MCSN v. Compact Disc Technology Limited & ors. The pre-trial issue was the same as in the Adeokin case. In this instance, the suit was instituted in 2007. In spite of the fact that the cause of action arose after both amendments to the Act, the findings of the learned justices in the CDT case were strikingly similar to that of the Adeokin judgment and to the effect that:
- By virtue of its being an owner, assignee and absolute licensee of the copyright in the works in issue, MCSN had vested rights which included the rights to institute an action for infringement of copyright;
- Though the cause of action arose after Copyright (Amendment) Decree No 42 of 1999 which introduced Section 15A (now 17), its application is not retrospective;
- MCSN had the requisite locus standi to institute the suit before the trial court; and there was no admission by the defendant in the Statement of Defence.
It should also be noted that at the time of this publication, the issue of the locus standi of MCSN, in other cases are making their way up to the Supreme Court.
The directive from the AGF
While the Adeokin and CDT cases were making their respective ways through the various courts, the applications, appeals, arguments etc for MCSN to be issued approval as a collection society continued unabated. One reason attributed to this lack of approval by NCC is the failure of MCSN to provide NCC with its accounts72. The lack of approval did not stop MCSN from acting as a collection society - issuance of demand letters for royalties, institution of legal proceedings for infringement etc. Given that NCC had actually issued its approval to COSON to act as a collection society for copyright owners in musical works and sound recordings, users claimed to be confused about who to pay royalties to.
Evidence of this confusion reared its head in the past when it was reported73 that the management of Silverbird Communications, owners of the Rhythm FM station in Lagos had been unable to pay royalty to artists whose records were aired by the station, because it did not know to which collecting body - MCSN or PMRS74 - such dues should be remitted. Even before the station began to air music, a letter was addressed to it by a group claiming to be the proper body that should receive the royalties75.
This exact situation was discussed at length by notable authors of the book Copinger and Skone James on Copyright:
- The existence of two or more organisations in the same field may diminish the advantages of collective administration for both rights owners and users.
- For the rights owners, competing societies lead to duplication of functions and reduction in economies of scale in operation and thus unlikely to bring benefits to their members.
- For the user, a multiplicity of societies representing a single category of rights owners would cause uncertainty, duplication of effort and extra expense. The user would have to check, for each work he wished to use, which society controlled it and whether he had the appropriate license.
- For both parties, administration costs would be greater, reducing the revenue available for distribution to rights owners and increasing the overall costs of obtaining licenses for the user76.
Be that as it may, by virtue of a directive77 dated 22 March, 2017, the Attorney General of the Federation directed NCC to grant MCSN approval to act as a collection society for the same class of owners as that of COSON78. In compliance with this directive, NCC in a letter dated 3 April, 2017 conveyed its approval to MCSN for it to act as a collection society. Recollect that earlier in this chapter the provision of the Act to the effect that NCC should not grant approval to more than one collection society representing the same class of owners was established.
At the time of the AGF directive:
- COSON had been operational as a collection society in the music industry for seven years;
- The class of copyright owners included owners of musical works and sound recordings (the same class that MCSN would represent);
- COSON had executed the necessary reciprocal agreements with PRS for the Music and other international collection societies for performing rights etc;
- There was no indication of NCC dissatisfaction of the operations of COSON; and
- MCSN had been operating as a collection society without the requisite approval.
Following the issuance of the directive, the perils highlighted by the authors of Copinger and Skone James on Copyright continued to prevail. MCSN ramped up its activities as a collection society. Having two societies administering the same category of rights owners resulted in users such as television and radio stations receiving demand letters from both. This contributed to the confusion and in instances, monies/royalties were not paid. The inefficiencies and loss of revenue particulars to the owners of the works are still being calculated.
Up until 2018 when NCC in exercise of its supervisory powers suspended the approval of COSON to act as a collection society79, Nigeria's music industry in flagrant breach of the Act had two collection societies operating.
A very grave status Quo
The job of the collection society is not just to represent local rights but to provide the reciprocal protection and collection of everyone's rights when they are activated in their territory. There is an integrated network where being a member of one society provides a common set of principles around the world for the protection of and collection of royalties80.
It is a fact that MCSN once had a reciprocal agreement with PRS but this was eventually terminated on 31st December 2010. There was no new agreement of this nature and MCSN is therefore actually unable to perform a basic function of a collection society and administer and manage the works of its foreign sister organisations. In reverse, these sister organisations cannot and will not perform a similar service to the members of MCSN. The income being lost is incalculable.
COSON on the other hand does have a valid and existing reciprocal agreement with PRS and other international societies. The fact is that, COSON's reciprocal agreement81 with PRS means that PRS collects royalties from other performing rights societies on behalf of members of COSON. The value of such contracts cannot be underscored in the copyright ecosystem.
However, on 30 April 2018, NCC exercising its supervisory powers suspended the license of COSON82. With its license suspended83, COSON should not be able to act as a collection society. Royalties on behalf of its members and those of the foreign collection societies that it has agreements with should not be collected and even be payable. Most regrettably, in flagrant disregard for the suspension of its license, and just like MCSN did before it was issued its approval, COSON has continued to act as a collection society. Examples of its activities include having an EGM in May 2018, barely a month after the issuance of the suspension of the license AND continuing to issue demand letters for payment of royalties.
The validity of licenses issued by COSON and the renewal therefor are questioned. Demands for royalties by COSON are questioned and payment by users is being disputed. MCSN with limited membership is strictly speaking significantly handicapped. Who suffers in all of this? It is the owners of copyright works that are members of these two organisations but are not receiving their dues for the exercise of exclusive rights by users which they as owners cannot practically administer. Faith in the system has been damaged and the powers of NCC undermined.
Section V: Damage to the Copyright Ecosystem
The death of Adeokin and CDT The Adeokin case spent a total of 22 years in court and trial is yet to start. In the CDT case, it has been 11 years and a new trial has been ordered. During that time the following occurred:
- Adeokin was a business name and the proprietor passed away during the pendency of the case;
- CDT was wound up also during the pendency of the suit and is no longer in business in Nigeria;
- With the death of these two businesses during the course of the cases, money was lost, employees became unemployed and the payment of taxes ceased.
- Indeed, it is uncertain whether there will be any trial in either of these cases. Without a trial, the opportunity for parties to establish their respective claims and defences is absent. Thus, the underlying legal and commercial issues are not properly considered.
Owner, assignee and exclusive licensee
Consider the fact that by virtue of the judgments, MCSN is described as owner, assignee and exclusive licensee in respect of various musical compositions and sound recordings in its repertoire. The net result is that if the musical compositions or sound recording of Fight the Fire or Nwata Miss84 is on MCSN's list, then it is the owner, assignee and exclusive licensee of each work. The Act never envisaged all 3 in 1. It was never the intention of the law for an owner of a work to also be an assignee or licensee of the said work and it's really not possible for an owner to also be assignee and exclusive licensee of the same work. A careful review of the law, its interpretation and the judgments reveal thus:
- Author is usually the first owner of the work85;
- Copyright in a work is transmissible by assignment and or license86;
- It is the owner that transmits by way of assignment and or license;
- An owner cannot also be an assignee and exclusive licensee of the same work;
- Author as first owner is typically the creator of the work and though it described itself as owner, MCSN is not the creator;
- Moral rights lie with the creator and MCSN could never claim such a right;
- The very nature of an assignment or license is such that same is assigned or licensed by the owner;
- An assignee or licensee was never the first owner or author of the works in question, did not create the works in question and cannot claim the moral right that resides with the owner;
- MCSN is not able to exercise rights against the true and real owner; and
- Copyright is an individual right and but is collectively administered and managed by a collection society as provided for under the said Act.
Other pertinent issues to note:
- As owner, it should not collect royalties and or disburse to 3rd parties. If it was the owner in the real sense of the word, it would not be distributing royalties to the actual owner;
- The description of owner, assignee, and licensee in the transmission documents are mere descriptive terms to enable collection societies' administrative and managerial activities and do not in any way take away the rights from the real owner; and
- MCSN cannot perform or record the works.
The need for NCC oversight
The Act provides for the establishment of NCC, the regulatory body charged with the administration and management of copyright in Nigeria. The administration and management of copyright in Nigeria includes the supervisory role of NCC over collection societies.
- The need, rationale and purpose of collection societies have been well outlined earlier.
- Any collecting society by its nature and as a matter of fact, will be in a dominant position because it will represent the rights of a majority of a particular category of rights owners, both national and foreign in any given territory.
- Thus, collective administration may not be in the public interest if there is no mechanism for ensuring that monopolistic collecting agencies do not abuse this position87.
It was in a bid to avoid the monopolistic situation outlined above that NCC was given the powers and functions that it has. As previously noted, collection societies are responsible for the collection of significant sums of other people's money and its distribution thereof. The collection society can also set royalty fees which is payable by the users. These activities are prone to abuse and justify the need for a regulator or supervisory body.
The effect of the judgments identified above is thus:
- Both now constitute the law to be complied with and unless there are trials with a different outcome, MCSN has been adjudged an owner, assignee and licensee.
- If the approval granted by NCC is revoked, MCSN will remain outside the purview and supervision of NCC.
- If MCSN assumes the personae of owner, licensee, and assignee as adjudicated by the Supreme Court it is outside the purview and supervisory control of NCC.
- The impact of this is that MCSN can fix royalty rates arbitrarily, pay out royalties as it deems fit and assume other monopolistic tendencies, none of which is within the intention of the law or good for the copyright system.
- For reasons highlighted earlier88, NCC in its capacity had refused to grant MCSN approval. The AGF directive effectively forced NCC to issue approval.
- MCSN operated as a collection society even when it did not have approval.
- In spite of its suspension COSON has gone on to continue acting as a collection society.
All this has served to undermine the authority of NCC as a regulatory body. The further impact is these entities and or collection societies acting without the much-needed supervision and oversight. This allows for monopolistic behaviour and remains detrimental to users, owners and the entire copyright ecosystem.
The existence of 2 collection societies representing the same class of owners
- Our Law Does not Allow More than one Society in respect of a particular class of owners89
- The categories of people who constitute members of collection societies for the administration of the rights in their works include: Authors of literary works; Authors of musical works (composers and music publishers); Owners of sound recordings. The members of some prominent collection societies have already been mentioned earlier.
- While the Act90 does not define class of owners, its meaning is apparent i.e. owners in the different rights in works. This is buttressed by class and categories of owners and members in other jurisdictions.
- Thus, if you have a collection society representing composers and record labels, provided NCC is satisfied that said collection society is adequately protecting the interests of its members, the Act prohibits NCC from approving another collection society91.
- The AGF issued the directive in spite of the provisions of the law and the prevailing facts.
- The power of the AGF to give directives is not in doubt. However, when the directive is contrary to the law an untenable situation is created and this must be addressed.
Section VI: What Next?... Solutions
Collection societies in the Digital Age
In their book A User's Guide to Copyright, authors Michael Flint, Nick Fitzpatrick92 and Clive Thorne said thus
As we advance toward the information society, the volume of copyright and performance usage increases and the technology for tracking and managing copyright uses improves, the importance of collection societies as a convenient source for clearly copyright will only grow.
This book was published in 2006, 13 years ago and how prophetic these words were. Fast forward to 2019 and collection societies are facing the challenge of monitoring and securing reward for the use of their members works via the various digital platforms invented and or yet to be invented. The sheer volume of data that collecting societies are handling from digital service providers as well as the share that digital music makes of their collection income is increasing exponentially.
In today's world it has never been more important for collective administration and the copyright system to adapt and function effectively and efficiently. Collection societies like PRS for the Music have launched a number of initiatives to help achieve licensing on a multi-territory basis. It has launched ICE with sister organizations with the aim of developing the world's first integrated music copyright licensing and processing hub, encouraging copyright data accuracy aggregation of repertoire for multi territory licenses and the elimination of parallel processing against incompatible works databases.
The fourth industrial revolution is upon us, digital technology has continued to disrupt the music industry. The issue now is not what will come next, as change is inevitable, but the speed with which the industry can react to change93. With all this in mind, stakeholders concerned must be galvanised into action and do what is required to resolve the very grave status quo highlighted.
Changes to law and policies
NCC has taken great strides in attempting to bring our Act which is more than 30 years old up to date. Its efforts to revise the Act have included the need to address any perceived anomalies or ambiguities some of which may have contributed to the dismal situation outlined above. The process and procedure for promulgation of the Copyright Bill (which is languishing somewhere between the executive and the legislative) into law must be fast tracked and actioned immediately.
All relevant ministries, departments and agencies must work together, understand the value of the music industry, the business of music and the copyright ecosystem with a view to ensuring that policies and directive while designed to protect do not hinder genuine and legitimate revenue generation. The ban on direct marketing of CRBT is one such directive that should be reconsidered.
The need for the supervising ministry to allow NCC carry out its functions unhindered is critical. Finally, NCC has to be enabled to carry out its functions such that when entities under its supervision err, are in breach etc sanctions and enforcement are obeyed. The directive of the AGF must also be critically reviewed and reversed in compliance with the applicable law.
The role of the judiciary in the growth of the copyright ecosystem cannot be underscored. This allows for the proper protection of rights as envisaged by the principles of copyright and generation of revenue as required for a viable music industry. A full understanding of the business of music, its value, the copyright law, its history and rationale of collection societies are critical to the learned justices. Routine and regular workshops in this regard are advocated for the judges.
The sheer volume of cases that judges have to handle is herculean in nature. A recent headline noted that eighty two judges were handling a total of two hundred thousand cases between them. Records of proceedings are still written in long hand by judges of the appellate courts. None of this allows for efficiency and expediency. The magnitude of the situation is better understood, when one considers that with the introduction of ODR94 up to 60m cases are dealt with each year in the US i.e. 3 times more than cases actually filed in the courts95.
Justice delayed is justice denied, not to mention the losses to the economy and reputation of the country. Introduction of stenographers, ODR, upholding the principle of separation of powers thereby ensuring the judiciary's true independence are all measures that can help address the challenges of the judiciary.
Supreme Court: Judgment review
As Aristotle said, Law is Order and Good Law is Good Order and a Bad Law is no Law. Earlier sections of this chapter reflect good reason to propose that the Supreme Court overrules itself. In view of S.235 of the Constitution which states that no appeal shall lie to any other body or person from any determination of the Supreme Court, one has to ask- can the Supreme Court overrule itself? In a number of cases96, the Supreme Court has carefully considered this question. A review of these cases reveals that yes, it can overrule itself under very specific circumstances. Such an action is not a rule and will occur where good and substantial reason prevail. It is submitted that there is good and substantial reason for a case review and for the Supreme Court to overrule the judgments. Based on all that is at stake, the Supreme Court is may also consider inviting NCC and other experts to act as amicus curiae on the issues.
Regulator and owners to take the bull by the horns
"One must be proactive and authoritative in such a climate. ... For the industry to be able to cope, it has to be far more entrepreneurial in characteristic, agile, strategic, visionary and with a willingness to embrace change and engage with the consumer and the customer.97"
We are aware of a series of efforts by NCC and the owners to remedy the situation, unfortunately this has not yielded much in terms of stability and compliance with the laws and progress. Given the growth potential of the music industry NCC must take the bull by the horns and ensure:
- Enforcement and compliance with the law by MCSN and COSON
- Consideration of a challenge to directive of the AGF to the effect that same is ultra vires
- Avoidance of misinterpretation of the law and damage to the copyright ecosystem by facilitating workshops for the judiciary with legal and business experts teaching
- Engagement with the rights owners to educate and motivate with a view to finding alternatives to the current organisations engaged in collection. This includes
- Consideration of technology98 and engagement with the tech companies to seek a solution to the administration and management of rights that would traditionally require collection societies.
- Members of the current societies terminating their existing agreements with them and setting up a new society entirely
These are exciting times in Nigeria's music industry and all the evidence shows its importance to the economy and that its global reach only continues on an upward trajectory. To quote the chairman of IFPI Placido Domingo
'... we must ensure the right environment is created to make this success sustainable for the future; we must continue to work to establish a music ecosystem that is healthy and open to all, where music is valued and respected'.99
Changes are urgently needed and the time is now
- Discussions on the nature of the rights of owners under Nigerian law is another topic.
- There are differences in the nature and interpretation of rights of owners as enshrined by the copyright laws of Nigeria, UK and the US.
1 The term collection society is used interchangeably with collection management organisation
2 The status quo re facts and law are as of July 2019
3 Collection societies etc.
4 IFPI Global Music Report 2019: State of the Industry
5 Collection societies revenues
6 The revenue from collection societies underscores its importance to the music industry
7 IFPI, 'Global Music Report 2017' accessed 25 June 2019
8 Caller ring back tunes
9 It is not known why these territories were not included
10 PWC, 'Entertainment and media outlook: 2018-2022: An African perspective' https://www.pwc.co.za/en/assets/pdf/; PWC, 'Entertainment and media outlook: 2018-2022: An African perspective' https://www.pwc.co.za/en/assets/pdf/; www.pwc.co.za/outlook accessed on 20 June 2019
11 Revenue from collection societies in Nigeria does not appear to be included and will be discussed later on in this chapter
12 This tallies to some extent with the Disruptive Creative Economy Meeting Nigerian Recorded Music Industry Report 2019; the DCEM report suggests that the Nigerian music industry is set to reach revenue of N18bn (USD50Million) by 2020.
13 PRS and MCPS are collection societies and dealt with in more detail in section iii of this chapter
14 Collection societies and the role in the copyright ecosystem are dealt with in some detail later on in this chapter
15 https://www.prsformusic.com/about-us/track-record/2016 accessed 2 July 2019
17 https://www.prsformusic.com/about-us/track-record/2017 accessed 2 July 2019
18 Relying on a smattering of information
19 Folarin Shyllon, Intellectual Property Law in Nigeria (vol 21, Verlag C.H. Beck Munchen 2003)
20 http://www.cosonng.com/coson-agm-approves-40-million-naira-as-specific-distribution-to-members/ accessed on 2 July 2019
21 Kevin Garnett, Gillian Davies and Gwilym Harbottle, Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005) 1540
22 IFPI 2017
24 see above
25 Caller ring back tunes
26 Chinese owned Nigerian company
27 https://www.musicweek.com/labels/read/we-can-become-a-globally-recognised-household-name-african-label-mavin-records-secures-major accessed on 2 July 2019; https://qz.com/africa/1582570/warner-music-bets-n-afrobeats-nigeria-label-chocolate-city/amp/ accessed on 2 July 3029
28 Challenges to the industry are a topic for another discussion
29 IFPI Global Music Report 2019 as cited above
30 Rights holders could be authors/first owners, assignees or licensees
31 IFPI Global Music Report 2019
32 Kevin Garnett, Gillian Davies and Gwilym Harbottle, Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005) 1540
33 It is the eligibility and copyright protection of works in the music industry that concerns us
34 1988, Cap 28 Laws of the Federal Republic of Nigeria; Every reference to the sections in this Act in this chapter shall be in respect of this statute
35 S.1 (1)
36 Eligibility for copyright in the listed works is provided for in sub-sections 2 - 4; formal definitions of these works is provided for in S.51
37 S. 51 contains the full definition of these terms
38 S 10 (1)
39 S 10 (3)
40 First Schedule
41 S 12
42 S 51 provides full details of these definitions
43 Sections 6, 7 and 8 provide for all the rights
44 Second Schedule to the Act
45 See above
46 Ann Harrison, Music the Business (7th edn, Virgin Books 2017)
47 Much of this section is culled from this author's article on this subject; http:// webcache.googleusercontent.com/search?q=cache:http://olajideoyewole. com/publications/Much of this section is culled from this author's article on this subject; http:// webcache.googleusercontent.com/search?q=cache:http://olajideoyewole. com/publications/Getting_paid_for_your_music_and_CMOs.pdf
48 American Society of Composers Authors & Publishers
49 Famous songwriters of the day sitting in a famous club discussing the use of their songs in public venues and no means of collecting a royalty
50 Broadcast Music Incorporated
51 Unlike like Nigeria and the U.K. the US allows for more than 1 collection society to represent the same class of owner
52 Phonographic Performance Ltd
53 See section I above on information about revenue that can be generated from the these licenses
54 Kevin Garnett, Gillian Davies and Gwilym Harbottle, Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005) 1544
55 Michael Flint, Nick Fitzpatrick and Clive Thorne, A User's Guide to Copyright (6th edn, Tottel Publishing 2006) 234
56 Kevin Garnett, Gillian Davies and Gwilym Harbottle, Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005
57 Information on collection societies in Ghana and South Africa provided courtesy of our DLA Piper Africa members Reindorf Chambers and DLA Piper South Africa respectively. For more information go to www.olajideoyewole.com
58 Ghana Music Rights Organization (GHAMRO) administers these rights in Ghana while South African Music Rights Organisation (SAMRO), South African Music Performance Rights Association (SAMPRA) and The Independent Music Performance Rights Association (IMPRA) are the three collection societies in the South African music industry.
59 the Copyright (Amendment) Decree (No. 98) of 1992
61 For more on this, see Members of Collection Societies below
62 See the section on True Stories. ASCAP and BMI exist side by side representing the same class/category of rights holders
63 the Copyright (Amendment) Decree of 1999
65 The current Supreme Court decisions on re this issue are discussed later on in this chapter
67 Bankole Sodipo, Copyright Law: Principles, Practice & Procedure (2nd edn, SWAN Publishing 2017) Chapter 17; John Asein, Nigerian Copyright Law & Practice (2nd edn, Books & Gavel Publishing 2012) Chapter 12; Folarin Shyllon, Intellectual Property Law in Nigeria (vol 21, Verlag C.H. Beck Munchen 2003); Tony Okoroji, Copyright Neighbouring Rights & The New Millionaires (The Twists and Turns in Nigeria) (1st edn, Tops Ltd 2012); Desmond Oriakhogba and Job Odion, 'Copyright collective management organizations in Nigeria: resolving the locus standi conundrum' Journal of Intellectual Property Law and Practice (2015, Vol. 10, No. 7)
68 There has been a plethora of litigation on locus standi and the judgment in the first two cases in the Supreme Court are under discussion
69 MSCN operations as a collection society began before the first amendment.
70 MCSN eventually received NCC approval and more on this later.
71 The 1999 amendment to the Act. Also referred to under the Collection Societies Under Nigerian Law section above
72 Folarin Shyllon, Intellectual Property Law in Nigeria (vol 21, Verlag C.H. Beck Munchen 2003) 130
73 See above pg. 131
74 Previous name of COSON
75 Folarin Shyllon as cited above 131
76 The US situation differs from that of Nigeria and the UK
77 The AGF issued this directive pursuant to its powers under S.50 of the Act
78 https://thenationonlineng.net/last-mcsn-gets-licence-collecting-society/ accessed on 4 July 2019
79 Discussed later on in the chapter
80 Helen Gammons, The Art of Music Publishing (1st edn, Focal Press 2011)
81 More on this and COSON later
82 Reasons for this are documented in the NCC letter to COSON dated 30th April 2018
83 COSON has challenged the suspension in court but the matter is yet to be determined
84 These are songs of MCSN board members Orits Williki and Charly Boy respectively
87 Kevin Garnett, Gillian Davies and Gwilym Harbottle, Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005)
88 Folarin Shyllon, Intellectual Property Law in Nigeria (vol 21, Verlag C.H. Beck Munchen 2003) 131
89 Copinger and Skone James on Copyright (Vol 1, 15th edn, Sweet & Maxwell 2005) 1540
91 See position in the US re ASCAP and BM
92 Partner and Global Co-Chair Media, Sport and Entertainment DLA Piper; at the time of publication Nick was a partner at DLA Piper Rudnick (as it then was) and Chairman of the Copyright Committee of the British Screen Advisory Council. Much of this section is gleaned from discussions with Nick Fitzpatrick and the author on the issue
93 Helen Gammons, The Art of Music Publishing (1st edn, Focal Press 2011) PXVII
94 Online Dispute Resolution
95 The Future of Professions Richard and David Susskind
96 Dalhatu v. Turaki & ors (2003) LPELR-917(SC); Biem v. Social Democratic Party SC. 341/20 decided by the Supreme Court on 14 May 2019 (Unreported); Associated Discount v. Amalgamated Trustees (No. 2) (2007) 7 S.C. 168 at 214 - 217 lines 35- 35 SC
97 The Art of Music Publishing as cited above PXVIII
98 BMAT is used to report music across TV and radio stations, venues and digital services globally. It renders its services to creators, content owners, producers, publishers, broadcasters, clubs, DSP and CMOs
99 IFPI Global Music Report 2019: State of the Industry
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