Russian Collection Society Blues

There is news lately that the Russian culture ministry has made new proposals concerning the Collection societies in Russia. One of these proposals is that the collection societies like RAO, VOIS and RSP should pay out 75% of what they collect to the authors and composers.

In principle this would be a positive step forward. 75% should be a very achievable target considering that collection societies in Canada pay out 90% of what they take in. In Socans’ 2014 annual report they said that “SOCAN’s Corporate Net Expense Ratio was 9.5 percent, below 10 percent for the first time in the history of the organization, positioning it as one of the most cost-effective major music rights organizations in the world.

The part of Russia’s proposal that doesn’t seem to make sense is that they want the 75% to apply every type of authors right separately. Collecting licenses from radio has a very different cost ratio than restaurants for example. It shouldn’t really matter so much that each area reach 75%. The only thing that should really matter is the total average because it is out of that average that authors are paid.

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