78%

Reports recently circulating in the media, on the internet and in other quarters of the public domain have alleged that the Copyright Music Organisation of Trinidad and Tobago (COTT) has violated certain stipulations of the World Intellectual Property Organisation (WIPO). The reports claim that COTT has exceeded the thirty percent maximum stipulated by WIPO for expenses which Collective Rights Societies can legitimately deduct from Gross Income in the process of determining distributable revenue. A Facebook page has also been set up to garner support for a call for the removal of COTT's Board of Directors on account of this alleged violation.

In order to place the truth about this matter on record and to allay any fears that may accrue to COTT's members, or any of its other stakeholders, as a result of the misinformation currently being propagated, COTT wishes to state as follows:

1. The claim that WIPO stipulates a maximum of 30% for Administration costs IS COMPLETELY FALSE AND MISLEADING!! WIPO does recommend, as a fundamental premise, that Collective Management Organisations are expected to "operate on the principle that 100 % of their revenues is distributed to right-owners after the deduction of their costs of operation."
2. In a 1999 publication, WIPO made the observation that Authors' Performing Rights Societies' costs typically "range between 18-30% . . . . of gross Licensing Income", but it readily conceded that they are "sometimes higher". Even that general observation, though, has to be placed within the context of the time and circumstance . . . i.e. 1999, and pertinent to the larger, more established Collective Rights Societies.
3. Factors impacting directly on any Society's cost of operation include the levels of ethical and legal compliance characteristic of the society within which the organisation operates, the effectiveness and cost of any technology employed in its operations, and the size of the Society's membership. Generally speaking, the larger the Society, the smaller the per capita Administration Rates. Also, Developing countries, where compliance is typically a more difficult and expensive undertaking, generally have higher costs of attaining compliance than their more developed counterparts.
4. Another WIPO document specifically cites periods of "large-scale investment in facilities" and / or "high inflation" as justifiable, temporary exceptions to the guideline. The acquisition of COTT's new Headquarters in Abercromby St. in 2008, and the Global Recession, the full impact of which, coincidentally and unfortunately, began to be felt around that time, certainly qualify in this regard.
5. The cost details being circulated by the agitators are misleading, as they give the impression that they are COTT's overall Administration Rates over the period. COTT's true overall Administration Rates figures for the period cited were as follows:
6. 2006 - 42%;     2007  -  40%; 2008  -  57%; 2009  -  60%.
7. In fact, for its 2008 Distributions (based, as it was, on 2007 Admin Rate), COTT actually received kudos, not only from WIPO, but also from CISAC, the global umbrella organisation for Copyright Collective Organisations.
8. Recognising the onset of the Global Recession, and with the imminent mortgage obligation for its new Headquarters, COTT commenced the implementation of certain corrective measures from as early as 2008, but intensified these strategies in 2009. These included a reduction in all commissions earned by the company's Collections personnel, the freezing of ALL salaries w.e.f. January 2008 and THE RETRENCHMENT OF ALMOST 25% OF ITS STAFF IN SEPT 2009. The net effect was a return for Fiscal 2010 to the Admin Rate achieved in 2007, 40% (unaudited), and a commitment to reduce it even further in 2011.
9. COTT will invite all its members to a meeting on a date to be determined in the near future. This meeting is being called for the primary purpose of setting the records straight on this issue and responding to any and all concerns members may wish to address in this regard.

For further information please contact Melissa Arnaud, Communications Officer, at 623-6101 ext. 2006 or marnaud@cott.org.tt.

Posted by: admin::Aug 12, 2011

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