Russian Authors’ Society (RAO) staggered by financial scandals last year summed up its activities for the previous year. RAO Head Maxim Dmitriev told RIA News during the interview about the dramatic changes, lawsuits and RAO new royalty collection and distribution systems.
– Maxim Ivanovich, you headed RAO in the situation of a financial scandal, the previous Director General Sergei Fedotov was accused of fraud and sentenced to a year and a half of a
prison colony. What changes have taken place in RAO since the arrival of the new top management?
– We’ve changed the tariff system. Previously, royalties used to be collected by staff members who got salaries, and they were not interested in the final result, to put it mildly. Now we employ agents whose earnings depend on a percentage of the collected remuneration, and it’s obvious that the new motivation system is more efficient.
It’s brought tangible results: for the first half of the year, overall collections increased by about 8%, including theaters (23%), concerts (13%), consumer market enterprises (6.5%).
– “Who are your agents?”
– “Theatrical agent” is responsible for interaction between authors and users of “grand rights” – theaters, philharmonic societies, where large forms are used: musical drama, opera, ballets.
Company “Interactive” represents RAO interests in the area of Internet, “First Music Publishing” is engaged in the field of synchronization (the use of music within complex objects – movies, film series, videos, etc.), and “Firm Melody” represents RAO interests in the sphere of royalty collections for the use of music in audio recordings (audio media, CDs, vinyl carriers).
– Did RAO manage to minimize its costs?
– As of August, RAO cost reduction has reached 37%: in 2016 the expenses for the Society activities amounted to 1 billion 43 million rubles, now for the same period this figure constitutes 662 million rubles.
The maintenance costs went down due to the reduction of RAO staff, as many employee positions duplicated each other. Last year 417 million rubles was spent to pay staff salaries for this period, and now this level is 305 million rubles.
The second point is that we’ve reduced RAO expenses for staff insurance, buildings and so on, but this does not mean that we have worsened labor conditions for the Society employees.
– Are there any changes introduced into RAO royalty payment system?
– RAO began to distribute royalties in a different way. We strive to improve the accuracy of royalty collection and distribution by obtaining full information about the use of musical works. A three-month period is established for the agents to receive user reports. At the end of the above period, RAO starts the distribution process basing only on actual data. Earlier RAO actively implied so-called statistical data not underpinned by any analysis. FonMix, a b2b service applied by RAO and VOIS together is very helpful in obtaining information from users – it’s a music player submitting reports to RAO in an automatic mode.
– How many authors are RAO members today?
– There are about 27 thousand authors in RAO and in general their quantity does not change noticeably. But the number of active royalty recipients is about 6-8 thousand authors and music publishers. Some artists partially withdraw their rights from RAO in the field of concert activity or public performance, to avoid paying extra deductions from the concert remuneration. In broad terms, this trend has sharply declined during 2017.
– Which category of authors receives considerable remuneration?
– First of all, theatrical figures: directors, choreographers, screenwriters, playwrights, librettists.
The second category to get major payments covers the composers who create music for the cinema. If a film was a success in the cinema and earned a remarkable box office, the author generates large accruals.
The largest royalty recipients are legal entities – Russian music publishers and foreign company representations, for example, for the music that sounds on the radio stations.
– You filed a lawsuit against the former Russian Authors’ Society Head Sergei Fedotov to recover damages of over 290 million rubles. What was the eventual trial decision?
– The case is on in Presnensky Court, the first hearing was in November. A determination has already been made on security measures for the seizure of property amounting to 294 million rubles. RAO ex Director General ad interim is Vera Fedotova, Sergey’s mother.
– What are the future prospects of the collective management in the light of Internet technologies development?
– Intellectual property is one of the areas where block-chain technologies can really be useful: they will allow to capture and ensure the security of information and actions for all parties of the process.
Today RAO participates in the national project to create a fundamentally new industry “the framework of trust ” – IP-Chain operating on the basis of the technology of a decentralized distributed data
register. RAO is particularly interested in IP-Chain – we expect to resolve the issue of reports reliability and justification of payments to our authors.
Source: RIA News