Setting Up a Collecting Society

To: Brad Holland
Date: Fri, Oct 15, 2004, 12:24 PM via e-mail

Dear Brad
I got a message from Stuart Briers of the Association of Illustrators that IPA were interested in collecting photocopying money on behalf of illustrators in the USA, and wanted to know how to set up a collecting society, so here is a brief résumé.

ABOUT DACS [Design & Artists Copyright Society]
As you know DACS is the organisation that does this in the UK. It was started as a licensing service for (mainly) fine artists and their estates, part of a network of such societies throughout the world. Thus it represents not only its own UK artist members, but also the members of the other societies in the network (eg Matisse, Picasso, Calder etc) when their works are reproduced in the UK. This is its primary rights function, and in this role it acts more or less in the same way as an illustrator’s agent would, licensing reproduction for books, magazines, advertising, merchandising etc.

The secondary rights function is its ‘collecting society’ function in that it deals with rights that individual creators could not license themselves—chiefly photocopying, but also cable re-transmission of TV and slide collections. This secondary rights function started when the Association of Illustrators and the Association of Photographers approached DACS and asked it to represent their members for secondary rights – (we knew there was money out there waiting to be collected). DACS then approached a number of other organisations representing the visual community in fine art, photography, journalism, design etc who were willing to enroll their membership with DACS for secondary rights representation. Once this was done DACS could claim to represent a very substantial number of visual creators across the whole spectrum, and it was in business.

How Collecting Societies Work

Collecting societies sell ‘blanket licences’ which allow organisations to photocopy stuff legally. In return, the collecting society offers to indemnify its customer organisations against any claims that the photocopying is a breach of copyright. As part of the deal the collecting society will negotiate some form of sampling of what is copied, on the basis of which it then distributes the proceeds (less commission) to its rightsholders (publishers and/or creators).

In the case of DACS the issuing of blanket licences and gathering of sample data is carried out by a third organisation, the Copyright Licensing Agency (CLA). DACS then distributes the money to its creator members. The CLA is jointly owned by ALCS (the authors’ collecting society) and PLS (the publishers’ collecting society), and at first DACS had a struggle to get a look in. Thanks largely to the fall-out from a Copyright Tribunal judgment, it now has a negotiated share of the total take (8.5%) which goes to visual creators, and even a seat on the CLA board. DACS’ share currently amounts to nearly £3m per year.

The Situation in the USA

DACS’ primary rights function is carried out in the US by 2 organisations, ARS and VAGA. As I understand it they are ‘for profit’ organisations whose basic business is running fine art image banks, and unlike DACS would be probably not be interested in starting a secondary rights operation, though there would be no harm in talking to them. (DACS is a ‘not for profit’ organisation with a substantial input from creators in its governance).

The secondary rights function in the USA is carried out by CCC [Copyright Clearance Center]. Unlike CLA, which is jointly owned and run by creators and publishers, CCC is entirely a publisher owned operation, and the money goes to publishers. Whether they pass a share on to their authors, I don’t know.

There is another big difference between the two countries—the ‘permitted acts’. In the UK copying for educational purposes is not a ‘permitted act’, but in the USA it is. This means that whereas CLA collects a lot of money from schools & universities, CCC has only the business (& presumably government) sectors to target. Nevertheless I am told that CCC currently collects about £80m per year [over $100 m]. CCC is a member of the collecting societies’ international organisation IFRRO, and is in a somewhat anomalous position, I understand, because of its ‘publisher only’ status. There is also a trend within IFRRO to acknowledge the significance of the visual repertoire when licensing photocopying. The CCC therefore may be open to persuasion on this point.

How To Set Up A Collecting Society

The first thing to do is to get as many visual creators from all disciplines to join as you can. The best way of doing this is probably through associations rather than individuals. You need mass membership across the full spectrum of visual creators to give you recognition and clout. DACS was in the fortunate position of being able to use funds from cable retransmission of TV programmes quite soon after it had got enough creators together to claim to be representative, and these funds were swallowed up initially in setting up the structure of the secondary rights operation (to put it bluntly, DACS charged a commission of 100%, which is the way almost all collecting societies have funded their start-ups). I don’t know if there is an equivalent source of funding in the USA that you could tap. You will also probably need to find some funding from somewhere to employ at least one person initially to get the whole thing together.

It might also be worth talking to writers’ and journalists’ associations to see what their take on the CCC situation is.

I hope this is some help. We at DACS would be happy to give what support we can.

Simon Stern
Association of Illustrators

Design & Artists Copyright Society, UK