2015 was marked by significant changes not only in UBC, but also in the Brazilian scenario because of the economic and political crisis Brazil has been experiencing.
Regarding Collective Management of Authors’ Rights, 2015 was characterized by hard work and new problems, notably because of the publication of the enforcement regulations in Law 12853/2013, which not only included the power of oversight by the Ministry Of Culture (MinC), but also its power to directly interfere in the activity through Normative Instructions intended to be regulatory, and through the actions of the Standing Committee for the Improvement of Collective Management, whose functions and powers are regulatory. The MinC’s acts also grants to itself the power to coordinate mediation processes in the event of conflicts between societies and users of protected works, or societies and their affiliated members.
Despite the fact that the market contracted compared to previous years, and taking into account the difficulties mentioned above, if we consider collections of music performing rights, it was a positive year. The final results were admirable, as will be demonstrated in this report. The favorable results were also due to settlements made with users that followed the significant settlements signed in 2013 and 2014, especially with Pay TV.
If we observe the numbers for the total royalties collected in Brazil from public performance of musical works and recordings, the following figures are significant: In 2014, R$823,824,237.71 were distributed for authors’ rights and neighboring rights, to members living in Brazil and abroad; in 2015, R$709,312,093.24 were distributed. This difference represents a contraction of 13.9%.Of this total, 45% were distributed to the UBC repertoire and to its affiliated societies, maintaining our significant share of public performance rights of music in Brazil.
In 2015, 2,360 new members joined UBC, and we registered 488 thousand new works, 30 thousand recordings, and 1.1 thousand audiovisual soundtracks in our database.
We also experienced an interesting growth in the amount of earnings collected from abroad, on the order of 36.8%, which were exchanged and distributed to our members. Such growth can be attributed in part to the strength of the dollar and Euro over the Brazilian Real. The increase is also due to technical improvements made to UBC's processes of distribution of revenue collected from abroad. In 2015 we received, distributed and paid close to R$2.5 million in royalties collected from abroad. In 2015, we succeeded in collecting, distributing and paying R$3.4 million from foreign societies. And as a result, we were able to achieve an increase of 36%.
With regards to digital business, just as in 2014, a large portion of the gains made by UBC were in retroactive processing of iTunes files. Apple’s downloading service still represents the most significant source of collection to date, particularly due to the manner the files are processed and the values tallied. Sales reports for streaming services are beginning to increase processing efficiency; we are projecting improvements in 2016.
With regards to digital, it is important to draw attention to the fact that in 2015 there was a considerable amount of discussion between collective management societies, digital service providers, representatives from the Ministry of Culture and creators. Their concerns centered on the models used in digital business and the difficulties faced in getting the royalties into the hands of the members, making the operation less interesting to rights holders. There was also lengthy discussion about the types of rights involved in digital business and in what proportions. The discussion has had a direct impact on the organization of the market, on defining the legitimacy to license and on the powers of authority from the Ministry of Culture to demand specific authorization in order to collect and manage authors' rights in digital business, and what the requirements for this authorization might be.
In June of 2015, regulations were established for law 12.852, in force since 2013, which changes provisions in law 9.610/98 (Authors’ Rights Law) regarding collective management. Decree 8.469 was issued and subsequently normative instructions and ordinances. The Brazilian Union of Composers – UBC made the necessary changes to conform to the new rules, the General Meeting approved its new collection and distribution regulations and the documentation required by the above-mentioned regulations was duly sent to the Ministry of Culture.
A ruling has yet to be made on the request addressed to the Supreme Court with the goal of challenging provisions in Law 12852/13 for its unconstitutionality.
Apart from economic, political and legislative issues, one event stands out as a particularly somber moment for UBC in 2015 - the passing of our president, Fernando Brant. An unexpected and tragic outcome to a medical procedure took everyone by surprise and ended a life of dedication and commitment by this author who was recognized the world over for his active participation in the defense of creators' interests.
As a result of his passing, changes have been made to the Board of Directors of UBC. Fernando Brant, who had taken the lead at UBC for more than 20 years, was substituted by Sandra de Sá, a highly expressive singer and composer, who has been a member of the UBC board of directors since 2010.