A case study in collective rights management

Nowadays, a lot of talk goes on at EU-level about the practice of collective rights management and the work of author societies in general, especially in light of the Collective Rights Management Directive proposal that came out in July.  

Although it’s vitally important for both creators and cultural diversity in Europe, collective rights management can seem complicated! To clarify the issue – and demonstrate how it works in practice – here is a case study of how one particular European author society approaches collective rights management.

Teosto, a Finnish author society, represents some 26, 000 creators. These creators, their members, trust them to manage their rights. Teosto tracks how their members’ work is being used, extracts payment for this usage and passes it back to its members.  They extract a small percentage – 13.1% – to cover our administration and running costs.

Teosto collects and distributes money based on the information they receive about the use of their members’ music. For example, to obtain performing rights remuneration for its members Teosto first obtains performance data from radio and TV companies, organisers of festivals, concerts and other events, and performers. After deducting a small charge to cover the society’s running costs, they pass the money they obtain onto their members.

Teosto distributes money to its members up to five times a year.

Here’s the breakdown of their latest distribution effort just a few months ago:

Performing Rights Royalties: €12.3 million euros was paid to Teosto’s members for the use of their work at concerts, festivals and other live shows.

Royalties from performance abroad: €1 million euros was collected by Teosto’s sister organisations in other countries and passed on to Teosto to distribute.

Online and mechanisation royalties: €2.5 million euros was collected for works enjoyed using the Internet, for example via streaming.

What’s more, Teosto collected some €19.6 million in performing rights royalties for creators based in other countries.

Through the process of collective rights management Teosto is able to ensure that their members receive fair payment for the work they produce, in turn safeguarding the continued production of creative works in Europe.

Read More: European Commission Q&A on the Collective Rights Management Proposal