Valuation of copyrights: Copyright management organisation fees

The costs of royalties paid to collecting societies representing authors, creators and producers, are significant and disputable in many industries, like hotels or gastronomy. There are many disputes and law cases related to indicating the fair value of copyrights. The dominant position of collecting societies has resulted in a number of decisions by the European Commission and judgments by the European Court of Justice as well as national courts, concerning the activities of collecting societies and the level of fees collected. The problem has been widely analyzed, mainly by law specialists.

The objective of this investigation is to develop proper methods, which can be used in law disputes to indicate fair value. In the case of copyright valuation, methods based on income and market comparison are preferred, however, the fact that only a limited market exists in the case of dealing with collecting societies should be taken into consideration. Difficulties with using market comparison for calculations for Copyright Management Organisations' (CMOs) royalties are due to the problem of collecting accurate data in different countries, and finding comparable markets. Income methods are difficult due to the disputable matching revenues of hotels to rights represented by specified CMOs.

The author used both preferred methods and discussed their advantages and disadvantages. Rates from European Union markets were analyzed, including 21 countries divided into 5 clusters. In the market approach, the formalism and methods of multivariate comparative statistical analysis were used. Author created model to link the financial results (such as profits) of the hotels with the advantages of offering amenities such as TV and radio sets for use by the hotel guests, in an income approach.

My new methods show similar or slightly higher fees than current level of fees charged by CMOs on the analyzed market (the hotel industry).