2. What Are Intellectual Property Rights?
E. Current Rights Management Methods (continued)
Collective Administration
Groups of rightsholders often join or form an organization that centralizes the administration of their intellectual property and, in some cases, the distribution of their copyrighted works. The interests of the rightsholders are collectively represented by these organizations, which usually market the works, license their uses, collect fees, distribute royalties back to the rightsholders, and monitor infringements on their behalf.
The benefits of collective administration far exceed the disadvantages for individual rightsholders whose work generates income primarily from small rights like radio airplay for music, versus grand rights, like those vested in a Broadway show. Collective administration introduces economies of scale (e.g., lower transaction costs, more effective marketing efforts, greater capacity to handle large volumes of requests, etc.) that foster increased use of copyrighted works while minimizing the burdens on the rightsholder. By pooling assets from various rightsholders, it also enhances the economic value of those assets in the marketplace. However, collective administration provides these benefits only if there is a high volume and turnover of use for the members’ works.
Another important benefit of collective administration is the ability to pursue international markets and negotiate international rights agreements for members’ works. Most organizations do this by entering into reciprocal agreements with "sister" organizations in other countries. Reciprocity arrangements minimize the need to navigate the myriad copyright laws of various nations while giving members of the collective access to international markets. The "terms" of reciprocal agreements vary, but often include the very services that the collective offers its members in its own nation.
Collective administration also provides more efficient services for intellectual property users by providing a single point of contact for all of their rights needs. Users can locate both rightsholders and content at one location instead of searching across vast and disparate resources. When a user identifies the appropriate content or rightsholder, the collective assists him or her in obtaining rights by negotiating and administering license agreements. Collective administration offers users more predictable terms and conditions, as well as more consistent pricing structures than they would otherwise encounter in multiple direct licensing transactions. For organizations that distribute content as well as manage rights, such as stock photography or graphic arts agencies, collective administration offers more efficient distribution mechanisms so content can be disseminated to users quickly.
In addition to its economic and management role, collective administration has important social functions. It offers a source of legal advice to members and social advocacy for their efforts. By representing and promoting certain intellectual properties, it helps establish the importance and legitimacy of this work in society. This social aspect is particularly important for those in arts and humanities disciplines, who rarely possess the social and economic clout that influences society in its regard and compensation for creative endeavors.
To provide all these benefits, collective administration imposes many compromises on rightsholders. It requires them to relinquish some individual power and control over their works to a collective body in return for better management of those works. Individual rightsholder compensation will be less than with direct administration because the collective must use some of the revenues to cover its overhead costs. (These losses may be offset by decreased administrative costs and increased usage and larger royalty figures resulting from the collective’s superior marketing capabilities.) Finally, the collective must operate in the best interests of all of its members, which may not always be the best interests of a particular member. For these reasons, collective administration has been called the most effective overall method for administering intellectual property rights, but not necessarily the best solution.29
Collective administration has many forms and permutations. Some collective societies have grown into large organizations that dominate their sectors and have a near-monopolistic control over rights administration within them. To regulate these and other forms of collective administration, some organizations (particularly in European countries) are created by legislation or are under the legislative control of their governments, which monitor their structure and activities.30 The United States is unique in that it imposes few legislative structures on organizations that collectively administer intellectual property. Although antitrust laws and consent decrees do impose some regulatory constraints on the administration and organization of collectives in this country, particularly in the music industry,31 none of these organizations has been created by nor is operated under legislative statutes.
The earliest collective rights administration in the United States began in the music industry, when the American Society of Composers, Authors and Publishers (ASCAP) was founded in 1914 to collectively administer the licensing of nondramatic performances of music. Collective administration continues to this day, and is undergoing a resurgence as a result of the opportunities and issues arising from the increased use of digital media. The last few years have seen the development of new organizations that collectively administer intellectual property for organizations such as museums and other repositories of collections, as well as groups of professionals such as writers, artists, photographers, and font designers.
A. Intellectual Property Rights in the United States
B. A Brief History of Copyright
C. The Nature of Rights in Copyright
D. The Complexity of Rights in an Electronic Environment
E. Current Rights Management Methods
F. The Emergence and Perseverance of Rights Management