Working for royalties growth and a stronger digital market for creators
Royalty collections for creators have grown spectacularly in China in recent years and the market still has immense potential to continue growing. While this reflects the successful transformation of China to a licensed and protected market environment, there are also key challenges ahead for the collective management landscape, in China and internationally.
These were points made in a keynote speech by CISAC Director General Gadi Oron at the China International Copyright Expo in Chengdu. The Expo, organised by the National Copyright Administration (NCAC), is a major international and national event focused on the development of copyright industries in China.
CISAC’s DG said China has been one of the fast-growing markets for royalty collections in the last decade.In the last ten years, overall collections grew by four times and digital income has grown sharply and now account for 43% of all the royalties collected, higher than the global average of 35%.
Strong digital collections have also driven sharp growth of royalties across the Asia-Pacific region. Digital accounts for nearly half of all collections (46%), according to CISAC’s 2023 Global Collections Report. This is a higher digital share than in any other region of the world.
China’s collective management landscape also faces challenges. There was a small decline in its collections in 2022, which were down 5.6%. This is mainly because of the continuing impact of the COVID pandemic, but also reflects the difficulties in negotiating licenses with big digital services providers, such as Tencent and NetEase.
At a global level, digital collections have become the largest royalty source for the first time in 2022.
“There is no doubt that the future of our sector is in the digital market. And the future livelihood of creators depends on the ability to obtain fair and adequate remuneration from digital platforms.
It is for this reason that - as a global confederation - we are working to unlock further potential in the digital market.”
Oron explained three priority areas where CISAC is working on digital growth:
- increasing the value of creative works so that streaming services deliver a fair return for creators. There is a substantial imbalance of power between digital platforms and creators.
- improving the efficiency and accuracy of data, with CISAC leading the efforts to improve data exchanges and to promote the use of identifiers throughout the value chain.
- dealing with Artificial Intelligence, which will change the way works are created, and have a profound impact on human creators and the cultural industries.
AI has swiftly risen to become CISAC’s number one priority, Oron said. “ Everyone agrees that we need to act quickly. We need to quickly to find a way to ensure AI services provide royalty payments when copyrighted content is used for “training” of the AI. We must harness AI tools to reward human creativity, not suppress it”.
CISAC led a coalition of rightsholder organisations with an open letter to governments urging policy makers to follow three key principles for addressing AI. These are:
- consent and the authorisation of the creator,
- remuneration of the creator,
- transparency - the obligation for AI operators to report on their use of copyrighted work.