President's Report ...

Introduction

Allison Demas - President

2000 was for COTT a year of transition during which the society was preparing itself to move from cautious adolescence to earnest, albeit tentative adulthood. We were anticipating the termination at the year-end of the arrangement with PRS under which they managed the dis-tribution, on our behalf, of the royalties earned in Trinidad and Tobago in respect of the Inter-national Repertoire and reciprocally, the coll-ection of royalties earned by COTT members in overseas territories. To replace this arrange-ment, along with the emerging sister societies in the Caribbean, and under the aegis of the World Intellectual Property Organization, we were working assiduously to create the Carib-bean Copyright Link. At the same time, we were growing accustomed to our new CEO, Mr. Nicholas Inniss, as he settled in, overseeing the hiring and training of new staff, improving systems and procedures, and trying to serve our members and our several publics, if not better, at least more conscientiously and with a higher concern for their well-being.

It was a Transition year also that witnessed the passing of some stalwarts of the "Old Guard" - Lord Kitchener, Soondarlal Popo and Ras Shorty I, composers of stature all and pillars of the Trinidad and Tobago music establishment. But while these masters passed into history, we were privileged to witness the long overdue crowning of Winston Bailey - the Shadow - as Calypso Monarch, and to appreciate the emer-gence of young talents like Sanell Dempster, Bunji Garlin, Magadan and Precious. Rikki Jai also celebrated his tenth anniversary as a com-poser by winning the Chutney Monarch title.

For the entire year, Board and management alike wrestled with the questions of how to improve the Organisation's income and revenue streams; how to implement more effective monitoring of broadcasts and live performances to ensure that our members were getting their just desserts; how to combat the rampant piracy that was literally pillaging the livelihood of our composers; how to sensitize music users in particular and the public in general to value and respect copyright music, and so on. Throughout the year, in the media and through our news-letter, we tried to educate our members, recalcitrant music users and a generally indiffer-ent public as to who we were and what was our business. We launched our website - www.cott.org.tt

In the review that follows, I must of necessity be selective and what I have chosen to highlight here are what I have considered to be of parti-cular importance to the Organisation at this stage of its development.

1 • Caribbean Copyright Link

As I had indicated in my report last year, COTT, together with the other established national collecting societies in the region - Jamaican Association of Composers, Authors and Publishers Ltd (JACAP), St. Lucia's Hewanorra Musical Society Inc. (HMS), and the Copyright Society of Composers, Authors and Publishers Inc. (COSCAP) of Barbados, in a collaborative effort with the World Intellectual Property Organization (WIPO), the Performing Rights Society Ltd. (PRS) and the International Confederation of Societies of Authors and Composers (CISAC) and with the sanction of the respective Caricom Governments through their Ministries with the responsibility for Inte-llectual Property, had embarked on a series of initiatives to create a centralized Caribbean network and database of musical works - the Caribbean Copyright Link, whose mandate would be the provision of data management and rights management services for music copyright and related rights. I am now happy to report that after a series of comprehensive meetings held in Trinidad, the Bahamas, St. Lucia, and Barbados, and a presentation at CISAC's 42nd Congress in Santiago, Chile, CCL is a reality.

The first meeting of the Board of Directors of CCL was held in St. Lucia on October 12 and 13, 2000, and I was elected President. Other appointments to the Board were Mr. Darby Étienne of HMS of St. Lucia as Vice-President, and Mr. Sach Moore of COSCAP of Barbados and Mr. Steve Golding of JACAP of Jamaica as Directors. Mr. Inniss, COTT's Chief Executive Officer, was appointed Secretary-Treasurer. The meeting also considered and voted unanimously to adopt the by-laws of the new organization, which I had had the pleasure to write and propose.

Initially, by general consensus, Caribbean Copy-right Link will be sited in Trinidad, and each of the founding members will be required to con-tribute to the funding of the fledgling body until it develops its own revenue streams. In prin-ciple, CCL is intended to function as a regional centre servicing the entire Caribbean for the data management of copyright and related rights. It is our hope that CCL will perform, inter alia, the following functions for the region:

• Handle data management services for its clients, which would comprise right holders of both copyright and related rights
• Provide technical assistance for the establish-ing of information processing operations on site
• Maintain central databases
• Research unidentified works and perform-ances in cooperation with national societies worldwide
• Monitor and maintain data standards for all incoming data
• Handle rights management services for its clients such as lobbying with foreign societies to increase the monitoring of performances of Caribbean music in overseas markets.

I anticipate that chief among the benefits that will be derived from the operations of CCL will be improved copyright licensing, royalty coll-ection and distribution as well as the effective transfer of collective management expertise to the area. The region also stands to benefit from significantly increased royalty collections from foreign markets and reduced costs of operation of the present national societies. CCL will be fully operational by the end of 2001 and Caribbean national societies who join and subscribe to the organization will no longer be dependent on PRS or any other foreign society for royalty distribution.

2 • Change in Admission Requirements for Writer Members

During the year, the Board determined that an all out attempt should be made to increase the membership base of the organisation. The benefits of this would be an expanded works database and a possible infusion of young blood. As a first step, the Board reviewed the admission requirements for writer members and decided to reduce the entry qualification from three (3) commercially recorded songs to one (1) commercially recorded song. A similar change in its membership requirements had previously been instituted by PRS, which the Board felt was a valid enough precedent. Primarily as a result of this change, COTT accepted 75 new writer members during 2000, and the number of writer members increased from 327 at the beginning of the year to 402 members at year-end, an increase of almost 30%.

3 • Streamlining of the Distribution Process

Consequent upon the changes in the admission requirements, the Board also took a hard look at the Organisation's Distribution rules and con-cluded that improvements in the process were not only feasible but also essential to the cont-inued success and operations of COTT. Accord-ingly, Mr. David Bereaux, Membership and Mec-hanical Licensing Coordinator, was mandated to review the existing procedures and make the necessary recommendations. The principal objectives of the exercise were:

• To develop a more equitable system of Points Rating for works performed
• To improve the frequency of distribution of royalties to members.

Under the arrangement with PRS, all license fees and royalties received by COTT in res-pect of performing rights were placed in two pools: the COTT members' pool and the International Repertoire Pool. The COTT members' pool was further sub-divided into three (3) sub-pools:

• Broadcast Pool: all revenues received from radio, television and cable service operators
• General Pool: all revenues derived from general licensing - bars, restaurants, shops, etc.
• Special Events: all revenues received for events immediately preceding and during the National Carnival in which the majority of musical works performed are those composed by COTT members or composers of West Indian origin.

Mr. Bereaux recommended and the Board agreed to the establishing of a fourth sub-pool - the Live Events Pool, which would comprise all revenues generated from licences issued for live concerts with a fee of $5000 or more. The revenues so derived would be distributed directly to members whose works had been performed on the basis of play-lists collected or compiled for each such live event.

The Board also approved a revised schedule for the distribution of royalties. Pending the commencement of royalty distribution operations by CCL, Royalties in the Broadcast and General Pools would be distributed twice yearly at six month intervals, and the Carnival or Special Events Pool would be distributed in the last quarter of the year in which the Carnival took place. Previously the Carnival Pool was distributed together with the Broadcast and General Pools when the normal distribution was made in the following year. The Live Events Pool would be distributed at the regularly scheduled distribution closest to the date at which the live event occurred. Approval was also given to a revised schedule of Points for works performed that was straightforward and easy to understand.

At the direction of the Board, Mr. Bereaux pre-sented the new distribution rules to members at the 14th Annual Meeting of the Society, held at the Cascadia Hotel on September 14, 2000 and received their unanimous endorsement.

The Board considered this entire exercise to be part of its continuing campaign to ensure that all its operations and those of the Organisation were always completely "transparent" and open to the scrutiny of the membership and the larger public.

4 • Sampling

During the year, the Board viewed with grave concern what it perceived as a growing tend-ency by some composers to sample or repro-duce from original work by other composers without the specific written consent of the composer or publisher of that work. Both in the Organisation's Newsletter and in paid advertisements in the media, the Board felt constrained to remind members that COTT as a copyright organization and licensing body for musical works, had an obligation to respect and uphold the rights of all music copyright owners. Furthermore members, by virtue of their Deed of Assignment to COTT, warranted that all their works so assigned did not infringe on the rights in other copyright works. The announcements noted that failure to comply with these con-ditions might compel COTT to withhold royal-ties and other monies otherwise payable to composers in anticipation of possible litigation and potential third party liability as a result of the unauthorized use.

Despite these admonitions, the practice has continued, and while no legal action has as yet, to my knowledge, been taken by any composer whose rights have been infringed upon, I feel that such an eventuality will not be long in coming should the situation remain un-addressed. I, therefore, once again, wish to take this opportunity to remind members to respect their obligations to fellow music creators.

5 • Campaign for increased airplay and broadcast of local music

In July, COTT joined with RIATT (the Recording Industry Association of Trinidad and Tobago), in a show of solidarity with the objectives of their march and rally on Independence Square, Port of Spain to promote support for their campaign to induce local broadcasters to increase the amount of airplay for local, that is, Trinidad and Tobago music. This is a situation that is part-icularly critical at this time and percent (70%) of all performing right royalties (i.e. royalties accuring from the broadcast and public performance of copyright music) collected by our society. COTT therefore retains for local distribution thirty percent (30%) of all such royalties collected locally.

Current market research and surveys indicate that the actual radio broadcast content of local music is between ten per cent (10%) and four-teen per cent (14%), with television broadcast content of local music estimated at between one percent (1%) to three percent (3%). This means that local songwriters, composers and music publishers have been benefitting from a considerable subsidy. To circumvent the immediate shortfall of revenue that will result from the termination of the arrangement with PRS, local associations and individuals with a vested interest in the industry have no choice but to agitate and try to persuade the local broadcasters to increase the local music component of their local broadcasts. COTT, therefore, remains fully committed and dedicated to the achievement of this objective.

This also brings in sharper relief the future role of CCL. Caribbean Copyright Link will be respon-sible for the collating of the program logs for the use of the International Repertoire in the region and the distributing of the royalties collected. It will also have to ensure that all reg-ional societies establish the direct reciprocal agreements with Caribbean and International societies to permit the continued use of these repertoires, and to see that this is done immediately.

6 • Financial Performance

In 2000, our Royalty collections and our income from other sources continued to demonstrate the positive growth of the last few years. Total Revenue from all sources increased to $5.5 mil-lion from the sum of $5.3 million collected in 1999, an increase of more than 4%. Revenue from Performing Rights amounted to $5,437,500, an increase of 5.5% over the $5,156,065 realized the previous year.

As positive as these results were, however, they nonetheless fell short of our Plan 2000 targets of Total Revenue of $7.1 million and Revenue from Performing Rights of $6.7 million. This under-performance against Plan was chiefly as a result of our failure to conclude contracts with the local Cable TV and Satellite TV operators and the non-payment of royalties by one broad-casting network and one of the radio stations. These matters are being addressed and we expect compliance and settlement in the near future.

On the downside also was our continued inability to improve revenue from Recording Rights. In 2000, the total of commissions and interest income from Recording Rights amounted to $50,949, which was well below the 1999 revenue figure of $108,747 despite improvements in the department's organization and a more timely invoicing procedure. Administration Expenses as a percentage of Total Revenue increased from 27% in 1999 to almost 34% in 2000. In dollar terms, actual Administration Expenses totalled $1,882,763, which was in keeping with Plan 2000's budgeted $1.8 million, or 25% of Plan Revenue of $7.1 million as I have outlined previously. However, the shortfalls in revenue described above brought about a concomitant proportionate increase in administration expenses. As a result of these reversals, Net Income available for Distribution declined from $3,792,159 in 1999 to $3,585,209 in 2000.

A more complete picture of our overall financial performance is presented in the Auditors' Statements and Report appended herewith.

7 • Other Matters

During 2000, the Board and I viewed with consternation the formation of a second Collective administration society and what this presaged for a market as small as Trinidad and Tobago. Calling itself the Trinidad and Tobago Copyright Collection Organization, but using the acronym TTCO, this new entity immediately created no end of confusion among local music users. Firstly, despite a number of meetings at the Intellectual Property Office of the Ministry of the Attorney General and Legal Affairs, both with the Minister in the Ministry, Senator Gillian Lucky and with the Acting Controller of the IP Office, Ms. Mazina Kadir to attempt to resolve the situation, the Officers of TTCO have failed to supply COTT with relevant information concerning whom and what rights they represent.

COTT, however, has risen to the challenge. The staff has dedicated itself to improved standards of service to members, music users and the public. The idea is that if someone else is going to try to work your side of the street, then you had better work harder and smarter. The results of this approach have been immediately apparent. Not only has membership increased significantly as previously indicated but there have also been no resignations. The effect on members too has been electric Instead of the usual apathy to which all organisations seem prone, members are showing greater interest in the society's activities; attendance at meetings has increased as has individual participation. Finally, COTT has let no opportunity pass to publicize its bona fides. Through advertisements in the media and in its newsletter, the society has emphasized firstly, its affiliation with CISAC and what that means; and secondly, the continuing agreement with PRS and the control of the International Repertoire. In essence, COTT is proud that its legitimate affiliations give it control of the vast majority of copyright music played in Trinidad and Tobago.

8 • Conclusion

Despite the mixed fortunes we experienced during 2000, I remain, nonetheless, optimistic that COTT stands on the threshold of a pro-mising future. Membership is increasing and interest in the organisation is high. Inter-nationally, we are respected for the manner in which we conduct our affairs. We have demonstrated to broadcasters and other music users locally that we are responsible and willing partners in the development of the industry. Our staff is continuously being trained, on the job as well as by specialist tutors and institutions. They are a dedicated and well motivated group.

I am confident that we shall conclude in the near future the long outstanding contracts with the cable TV operators and the Trinidad and Tobago Publishers and Broadcasters Association (TTPBA). We have strengthened our unit for local licensing. We have not yet begun to tap the potential of Internet licensing. As a prelude to CCL coming on stream, we have been working to clean up our works database, correctly identifying titles, composers, lyricists, publishers, etc. and the accurate apportioning of shares. With the machinery functioning as it should, can success be long in coming?