Last year, Brazil was rated the eleventh top country in recorded music sales. It was responsible for a significant rise in overall music sales, a claim that few countries, if any, can make. In addition, it is one of the fastest and largest growing emerging markets, classed under the BRICI umbrella of outstanding performers (Brazil, Russia, India, China, and Indonesia). It is the most populated country in Latin America, and in this regard dwarfs Mexico, its nearest rival. The future looks bright for Brazil, who will also host the FIFA World Cup in 2014 and the Olympics in 2016.
Recently, Brazil conducted a public consultation about a bill to reform the actual copyright law proposed by the Ministry of Culture (MOC). The Ministry is working on a final report that should be sent to the new president elect on October 31 for analysis. The major role of the bill is to strengthen and balance author’s rights, along with a constitutional guarantee of free access to culture. In addition, the bill promises to make concession to modern forms of distribution.
The current copyright collection and distribution system in Brazil is quite different from that of the US and other countries. It is administered by a central organization, theEscritório Central de Arrecadação e Distribuição(ECAD), which is responsible for collecting all royalties from performing, mechanical and neighboring rights and then distributing the proceeds to the relevant author societies. Those societies then distribute the royalties to their members. In the last couple of years the ECAD has shown a lack of transparency in the distribution of collections, leading the Legislative Assembly of Sao Paulo to open an inquiry. The investigation has revealed wrongdoings far beyond ECAD’s legal and statutory rights.
To correct this, the reform of the copyright law aims to create the Instituto Brasileiro de Direito Autoral (IBDA) an organization controlled by the MOC that oversees the administration of copyright in Brazil and provides arbitration. Many entities have criticized that idea, claiming that it would be public interference in what is a strictly private commercial matter. In a recent press conference, the Brazilian Minister of Culture, Juca Ferreira, explained that this organization would be created to serve as an intermediary between artists, the collection societies, and all other parties by helping them litigate conflict and provide administrative support. The statement was meant to demystify the idea that the new IBDA would nationalize the collection of copyrights, which will continue in private hands. It is important to mention that all the top 20 music markets already have an equivalent administrative structure to manage their copyright collections.
In order to give authors greater control of their work, the new text of the copyright law clarifies the licensing concept, allowing the exploitation and usage of the intellectual work without a total transmission of the rights. The publishing contracts will no longer be able to contain clauses alluding to a (voluntary) cession of rights. The proposal also foresees the revision and cancellation of unfair or abusive contracts.
The concept of fair use will be incorporated in the law, guaranteeing the right of free access to culture and allowing the use of intellectual work for educational and didactical purposes. In the Academy, the need for authorization and prior payment would not be necessary since it does not involve economic exploitation of the activity. After the public consultation, however, it was necessity to revisit this statute, so that authors were better protected from the misuse of fair use.
The new law will also allow someone that owns an album to make copies of it for private use without the need of authorization. That guaranties the interoperability of digital files. Therefore, to own a CD and transfer its music to an iPod will now be legal. In addition to that, depleted works could be reproduced without the need of authorization for non-commercial purposes.
However, the rising of broadband services and mobile subscriptions increases the worry about illegal file sharing. This is a problem that affects almost all countries and it has been difficult to find a satisfactory solution in the new bill. A lobbyist group, the International Intellectual Property Alliance (IIPA), has criticized its file sharing and piracy provisions. The final text will likely address such misgivings. Moreover, at its final hearing the MOC attested that it would work to improve the concept of interactive access in conjunction with better distribution provisions, thereby allowing the development of new business models for the Internet.
Another important change proposed regarding the music market is the criminalization of payola. To avoid unfair competition, the act of artificially forcing the playing of songs through payment or favors will be considered a “violation of the economic order and the right of free access to culture”.
An intractable amount of legal issues clutter the music business today all over the world. The bottom line is that all the interests of the music stakeholders must be taken into account and, to some extent, balanced. The questions raised in Brazil over the modernization of its existing copyright law could well be the new template used by younger nations as they adjust to shifts in the dissemination of content.
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