Collective licensing has been suggested as a possible solution for the obstacle copyright law places in the path of new uses of works enabled by innovative technologies. Collective licensing does have the potential to reduce transaction costs when a large number of works are licensed to a large number of users, thereby benefiting both rights holders and users. However, the actual track record of collective rights organizations (CROs), the entities that manage collective licenses, reveals that they often fail to live up to that potential. Although there are a wide variety of CROs operating under divergent legal frameworks, many unfortunately share the characteristic of serving their own interests at the expense of artists and the public.
The CROs are well-funded and well-organized, and have succeeded in promoting themselves and the collective licensing model. The objective of this compilation is to tell the other side of the story – to provide balance to any policy discussion that addresses collective licensing and CROs. The episodes collected below reveal a long history of corruption, mismanagement, confiscation of funds, and lack of transparency that has deprived artists of the revenues they earned. At the same time, CROs have often aggressively sought fees to which they were not legally entitled or in a manner that discredited the copyright system. While properly regulated CROs in some circumstances enhance efficiency and advance the interests of rights holders and users, policymakers must be aware of this history as they consider the appropriateness of CROs as a possible solution to a specific copyright issue.