Gadi Oron

CISAC director general wades into digital royalty debate

'Digital services must be made to pay – but it’s not always easy to do this'. CISAC boss Gadi Oron explains why rightsholders' online revenues have been slow to grow.

Paul Nichols
  • By Paul Nichols
  • 17 Mar 2015
  • min read
Global performing royalties have grown 2.4 percent to top €6bn (£4.3bn) for the first time, according to the International Confederation of Societies of Authors and Composers (CISAC). They now make up 77 percent of the total revenue pot, while global online royalties represent just five percent. We catch up with Gadi Oron, CISAC’s director general, to learn why online royalties have been slow to grow…

Your latest report found that performing royalties broke the €6bn barrier in 2013 – what supported this growth?

Overall, we think it’s a reflection of the efforts collecting societies are making to improve their operations and do a better job on behalf of their members. It’s a combination of better coverage of the market, more efficiency and healthier negotiations in licensing deals.

Digital royalties grew by 25 percent during that period but still only make five percent of the total revenue pot. Why is that?

As the market develops, more digital music services are emerging and societies are getting better at licensing them. It’s an encouraging sign, but the overall picture is telling us that digital revenues are still not high enough for creators. Remuneration rates must be improved and more licences must be issued. We hope in the next report we will be able to show even greater improvements in this area.

What can collecting societies do to maximise digital royalties?

Firstly, they must reach out to more services to ensure they are licensed. Secondly, they must answer market needs and adapt to market demands – and be more efficient in their licensing and data processing functions. Many societies, including PRS for Music, are working hard to increase their capacity in this area, and we should soon start seeing the benefits.

Does the responsibility of increasing online royalties fall solely with collecting societies?

Obviously, collecting societies must be responsible for this. But I think other areas are equally important in supporting digital royalty growth. Legislation is key here. CISAC is working with legislators and decision makers at local and international levels on improving current laws, which we believe are unsatisfactory in some countries. In some countries legislation is not respected while in others, legislation which favours Internet Service Providers must be refined and clarified to ensure our societies can collect equitable remuneration on behalf of creators. Of course, there’s a big public awareness issue too. Digital music service providers must be made aware that they need a licence and the general public must also learn to respect music rights online.

What would your message be to creators who feel they are not getting fair remuneration from online music services?

The message is two-fold: looking at our latest figures, creators can really trust the societies to continue working on their behalf to ensure they get adequate remuneration. They should also take note that there’s still a lot of work to be done to ensure creators get fairly paid in the digital market. We need to work with government, legislators and the general public to put forward their case. Services must be made to pay – but it’s not always easy to do this.

Are you seeing any encouraging signs?

An increasing number of creators are getting involved. We’re seeing many initiatives coming from within the creative community. Songwriters and composers are becoming more vocal and we are on their side. It’s great to see them reminding decision-makers of the importance of ensuring fair remuneration. BASCA’s latest The Day the Music Died campaign and CIAM’s Fair Trade Music project are good examples of the types of initiatives we’re seeing spring up across the world.

What opportunities for creators does the digital music market offer?

As the market grows we’re seeing increasingly innovative ways to access music online. Eventually, creators will benefit. The key is to ensure they get fairly paid. The potential is certainly there, across Europe and in digital markets still in their infancy, for example China and India. There are lots of positive signs.

Do you think it will ever be able to compensate for the decline in physical sales?

I think the diversity of services on offer will eventually benefit creators. I think the more new ways to enjoy music are available, the more creators will be able to obtain fair remuneration. We’re still in the very early stages and are still fighting to establish the rules of engagement for creators. There is a lot to be done.

Gadi Oron is a specialist in international copyright law, working extensively across the creative industries and, in particular, the music industry. His skills and experience cover legal, public affairs and lobbying work, and he has represented rightsholders before governments, legislators and international bodies on a range of intellectual property, trade matters and national/international copyright laws. Oron joined CISAC in 2012 as General Counsel and took over the position of Director General in September 2014.