Support Services for Small and Medium Sized Publishing Companies Provided by the Intellectual Property Sector: Case Study of the Centro Español de Derechos Reprográficos (CEDRO) (Spanish Reproduction Rights Organisation)
The aim of this article is to show the range of support programmes and activities geared to small and medium sized publishing companies that can be developed by an organisation devoted to the collective management of authors’ rights. Specifically, this text will focus on the case of the Centro Español de Derechos Reprográficos (CEDRO, www.cedro.org), the Reproduction Rights Organisation at the service of writers, translators, journalists and publishing houses in Spain.
For this purpose, it would be useful to first offer a few basic details in context by addressing two issues: on the one hand, an overview of the publishing sector in Spain and, on the other, a brief introduction to the legal regulation of the work performed by CEDRO in relation to the main activity of publishers. The second part of the text is devoted to a general presentation of CEDRO, explaining what it is and what its principal functions are. And, finally, the article will examine in greater detail the different ways in which this organisation contributes to the development of the small and medium sized companies in the Spanish publishing sector.
1.1. The publishing sector in Spain
From the perspective of publishing production, we should point out that in 2003, 77,950 titles were published in Spain, 11.5% more than in the previous year. In this way, the number of “live” titles available in the market rose 291,966. The publishing agents responsible for this production numbered 1,140, of which 699 were private publishing houses associated with the Federación de Gremios de Editores de España (the Federation of Publishers’ Guilds of Spain). Of these, 557 could be considered as “small” (with an annual invoicing of less than 2.4 million euros); 113 “medium sized” (invoicing between 2.4 and 18 million euros); 20 “large” (invoicing between 18 and 60 million euros) and 9 “very large” (those invoicing more than 60 million euros). Another interesting item of information enables us to understand the degree of concentration in the publishing sector. That is, 86% of the large companies and more than half of the medium sized publishers belong to a publishing group. These groups account for 56% of the titles published and 75% of the total invoicing, which in 2003 amounted to 2,792.61 million euros. In addition, the international invoicing, for exports, was worth 339.2 million euros in 2003.
With respect to the demand, it suffices here to note that, according to a survey on reading habits made by the Federación de Gremios de Editores de España, approximately 50% of the population said that they never devote any time to reading. This statistic is an indication of a domestic market that has not been sufficiently exploited, in which, however, there are symptoms of growth, due, among other factors, to public interest campaigns promoting reading and to the greater attention which the various levels of government are gradually (although still insufficiently) giving to the development and funding of libraries. In 2004, domestic market growth was between 4.5 and 5%. The large companies grew 7%, while the medium sized grew 1.7% and the small businesses decreased 4.4%
To sum up, the Spanish publishing sector is a strong and highly diversified sector, with a very broad and varied range of products, offered by a considerable number of publishing houses, many of which are small and medium sized undertakings.
1.2. The legal framework
Under Spanish intellectual property legislation, the author of a work, in addition to a number of moral rights of a personal nature, is the original proprietor of an entire range of rights or powers for the commercial exploitation of that work: including, among others, reproduction (the power to authorise or prohibit the reproduction of the work by any means whatsoever and to set the terms and conditions for the copying of the work), distribution (the power to decide whether the work is to be disseminated publicly by means of tangible copies and how such dissemination is to be implemented) and public communication (which empowers the author to determine if –and how- the work can be disseminated without the need for material copies, for example, by means of a theatrical performance, television broadcast or publication in the Internet). For this reason, in principle, any and all of these uses of a work must obtain the express prior authorisation of its author.
The printed publication of a textual work (a novel, an essay, and the like) requires the assignment by the author –the original proprietor- to the publisher of the reproduction rights (in the form of a book, in this case) and the distribution. This assignment is formalised in a publishing agreement, which sets out in detail the scope and duration of the arrangement, as well as the economic compensation to be paid to the author in exchange for the exploitation of his or her work. In this way, the publishing house becomes the holder of the title to the rights inherent to the work, to the effects and purposes and for the period of time stipulated in the agreement. Furthermore, the Spanish Intellectual Property Act also provides for special protection of the effort made by publishers in the publication of a work, specifically with respect to its actual materialisation in a particular edition, with its particular characteristics of design, layout, letterpress, and the like.
Together with the rights, a number of exceptions are established within the Spanish Intellectual Property legal framework, which limit those rights. Thus, for example, although the general principle in Spain is that prior authorisation by the author or the holder of the title to the rights is required in order to reproduce the work, such authorisation is not necessary –as an exception to the rule- whenever the reproduction involves a private copy, that is, for the private use of the person who makes the copy, where the copy is not going to be used collectively (as would occur in the case of a teacher who distributes photocopies of a text in a classroom) and it is not made for profit (such as in a photocopying shop) or in a public establishment (such as a library or a University). In order to compensate the holders of rights for this use of their works, which cannot be prohibited and whose terms and conditions cannot be fixed, the Act establishes a system of remuneration by means of a levy on the devices that enable this kind of private copies to be made and the supports on which they can be stored. However, if a reproduction has any of the characteristics mentioned –to be intended for a collective purpose, made for the purpose of obtaining a profit, by means of a price or in a public establishment- it falls within the sphere of the general copyright rule, whereby, in order to make the copy, authorisation by the holder of the right must first be obtained.
The publication of a book is a case where there is an individual management of the reproduction (and distribution) right, which comes about in a bilateral manner between an author and a publisher. However, there are certain kinds of reproductions which, by their very nature and on account of the massive practice that they involve, can only be managed–or, in any case, it is more practical to manage them- in a collective manner, through organisations which, on behalf of the proprietors of rights, grant the necessary authorisations to a plurality of users. This is the case of the reprographic reproductions of works already published and the management of such reproductions, through the granting of licences, by the Reproduction Rights Organisations, the specific collective management societies in the book sector.
2. General presentation of CEDRO
The Centro Español de Derechos Reprográficos (CEDRO) is the non-profit association of authors and publishers of books, periodicals and other publications, published in any media and on any support, which undertakes to defend and collectively manage their intellectual property rights (reproduction, transformation, public communication and distribution). The Centre was approved to act in this capacity in 1988 by the Spanish Ministry of Culture under the Intellectual Property Act.
CEDRO’s activity contributes to improving the working conditions in Spain of the creators of written culture (writers, translators, journalists and publishers) and to alleviating the financial setbacks caused by the massive reproduction of their works. The Centre’s principal functions and services are as follows:
- the distribution among authors and publishers of the royalties to which they are entitled on account of the use of their works,
- a social function: the organisation of activities and the provision of training, promotion and assistance services to authors and publishers,
- the collective management of the right to remuneration for private copies,
- the granting of authorisations or licences for the use of the works in its repertoire,
- the defence of the interests of its members before the courts and other domestic and international institutions, and
- the dissemination of information and the raising of social awareness concerning the principles of Copyright.
CEDRO works in order to manage the rights of its members throughout the world through reciprocal representation agreements with similar organisations in other countries and it belongs to the international federation of associations of this kind, that is, the International Federation of Reproduction Rights Organisations (IFRRO, www.ifrro.org).
As of 29 January 2005, CEDRO’s membership numbered 7,370, between authors (6,348) and publishers (1,022). Moreover, it has signed 22 bilateral agreements with counterparts in different countries.
CEDRO’s Activities in Support of the Small and Medium sized Companies in the Publishing Sector
From a perusal of the foregoing list of CEDRO’s functions and activities, we can easily see what the main support services are that it has to offer to the companies that form a part of the sector in Spain. However, a more detailed analysis and a specific formulation will enable us to obtain a comprehensive and more precise understanding of its relevance and its economic impact –but also cultural and of other kinds - on the development and success of the publishing business in our country.
The Best Ally in Defence of their Interests
The main support given to the small and medium sized publishing enterprises by organisations such as CEDRO consists of the ongoing activity of the defence of their interests and of their intellectual property rights (the same as the authors’ rights), which these organisations carry out before all kinds of authorities and institutions, such as Parliament, the Public Administration, and the like.
That is, the reproduction rights organisations work to achieve a legal framework that will be as beneficial as possible to their members, authors and publishers; so that the action plans in this area implemented by Ministries and other bodies will take into account the interests and needs of the holders of such rights; in short, in order to make the voice of the creators and the producers in the book sector to be heard in all kinds of forums that bear a relation to their intellectual property rights, which to a large extent constitute their main resource.
In Search of a More Understanding and Respectful Environment
Secondly, the reproduction rights organisations devote enormous efforts to the task of dissemination of information and awareness-raising in the community concerning the need to respect the Copyright, in order to create a more understanding and respectful environment concerning rights of this kind. In the end, it concerns placing a true value on the products of this cultural industry, which is publishing, by striving to make the community aware that the principal fruit of the creative and entrepreneurial efforts by authors and publishers –the book- is a high-quality product, with a highly symbolic density and particular characteristics, given the legal framework on which it is supported.
The intangible nature of intellectual property renders it very difficult in many countries for their citizens to understand the cultural importance of Copyright, which makes it absolutely necessary to convey the message, through a number of channels, that this particular kind of property not only benefits its owners, but also society in general, as the community can enjoy the goods that it generates: the goods of intellectual creation and production, indispensable for personal development, education, research, social and entrepreneurial innovation and economic development. The small and medium sized companies in the publishing sector could hardly try to influence society in this way with their own resources, for which reason, activities of groups like the reproduction rights organisations is crucial.
An example of these activities in support of publishing firms is the communication and education programme aimed at the educational environment, which CEDRO is designing and plans to launch in October of this year. Based on a number of past initiatives, the programme, which is truly ambitious, aims at reaching students, teachers, education authorities, education inspectors and teacher training centres, so that, through a range of initiatives and mechanisms, books and creativity are more valued and appreciated in this environment.
A More Secure Main Market
The activity of a collective reproduction rights management organisation such as CEDRO contributes towards making the book market a more secure market, by fighting against the unfair, fraudulent and illegal competition confronting publishers, resulting from book piracy or the massive, uncontrolled and unauthorised photocopying of books and other copyright-protected publications.
In effect, when a photocopying shop open to the public systematically makes multiple copies of entire books and has them ready for sale to the students of a nearby university who approach the shop to purchase them (a phenomenon that unfortunately still occurs in Spain today), it is taking an abusive and illegitimate advantage of someone else’s work: not only of the creative effort of the author, but also of the industrial effort made by the publisher, whose possibilities of obtaining a financial return, or with luck, a profit, from the investments made in that particular publishing project are thus undermined. Therefore, the work performed by organisations such as CEDRO in order to put an end to these abusive and fraudulent practices contributes to achieving a sanitised and more secure book market.
An Expanding Secondary Market
Secondly, it could be said that CEDRO and similar institutions in other countries take care of managing for the publishing companies (also for the authors) what we could call a “secondary market”: the market that is generated around certain non-principal, but rather secondary uses or applications of the works. In the publishing business, it is clear that the primary exploitation of a work consists of its being published and distributed in the form of a book. Among the secondary uses of a work already disseminated in this way is its reproduction by photocopying or scanning for personal use, for a collective use in a training course, for consultation through the Intranet by a university or a business, and the like.
These are uses which are difficult to manage (besides producing scant returns or none at all) for each publishing firm on an individual basis, because they involve processing the requests for permission lodged by potential users, granting the authorisations, establishing the fees, controlling effective compliance with the terms and conditions agreed, collecting the relevant royalties and transferring them to the rightsholders, etc. Neither is it very practical for those who have a need for the above-mentioned secondary uses (the users) to have to obtain the required permission from each and every one of the many publishers in the market. The reproduction rights collective management organisations have come to take care of this specific secondary market, parallel to the main market and increasingly more important, which, otherwise, would practically remain unexploited, by acting as intermediaries between copyright holders and users: on behalf of the former, they grant the latter the permission needed in order to use the works they are interested in, and then distribute the fees collected for such permission to the natural or legal persons entitled to them. In some countries, as in the case of Spain, the royalties that many small and medium sized publishing firms receive each year from this activity has already ceased to be merely symbolic and in some cases involve amounts of certain significance, which, furthermore, are directly reflected on their results statement.
Promotion, Assistance and Training Services
The Spanish Intellectual Property Act determines that the collective management organisations must devote 20% of their annual revenues from private copies to a “social function” consisting of promotion, assistance and training activities aimed at authors and publishers. CEDRO performs a significant part of this social function in cooperation with authors’ and publishers’ associations and guilds, in what constitutes a fundamental line of support for their initiatives, projects and services. In this way, by providing these services not directly but rather through the guilds and associations, CEDRO also contributes to the existence of these indispensable professional structures.
The services that CEDRO provides in this way to small and medium sized publishing enterprises include, for example, legal and tax consultancy services. Many of these companies in Spain cannot afford to have their own legal or tax departments, or even to outsource such work individually, for which reason, CEDRO’s sponsorship enables publishers’ guilds and associations to offer them these services in a collective manner. This is the practice followed, for example, by the National Association of Text Books and Teaching Material Publishers (ANELE), the Madrid Publishers Association or the Publishers’ Guild of Catalonia. In the framework of this function, CEDRO also funds the organisation of training courses and conferences on a range of issues of interest to publishing firms, including the subject of intellectual property. Such was the monographic theme of the conference organised on 14 January in Malaga by the Publishers’ Association of Andalusia (AEA).
With regard to promotion, the collection of royalties performed by CEDRO also serves to contribute –through the aforementioned “social function” mechanism- to the presence of Spain’s publishing production in significant business arenas. Thus, CEDRO collaborates in Spain’s international book fair, the Feria Internacional del Libro de España, LIBER, which the Federación de Gremios de Editores de España, FGEE, (Federation of Publishers’ Guilds of Spain) organises yearly, and supports the participation of Spanish publishing firms in the principal book fairs of other countries, such as those held in Frankfurt, London, Paris, Buenos Aires, Guadalajara, etc. Other funds are used to back business missions abroad, through associations such as the Publishers’ Guild of Euskadi.
Furthermore, many other activities and initiatives of the publishers’ guilds and associations are accommodated within CEDRO’s social function: ranging from financial support to projects for the promotion of the publishers’ catalogues in the Internet (as is the case with the Publishers’ Association of Andalusia’s Biblioandalucía, or the website of the Spanish Association of Symphonic Music Publishers) or to the preparation of studies of a professional nature (such as the study recently completed by ANELE and the FGEE on school libraries in Spain), in addition to the organisation of professional congresses and seminars. Some of these initiatives impact particularly on the sector of the small and medium sized publishing companies, for example, in the case of the Bibliodiversidad project, which is being carried out under the auspices of the Madrid Publishers’ Association.
Before concluding, it may be of interest to note that the work performed by CEDRO in providing the services described above, although its direct beneficiaries are authors and publishers, also benefits the rest of the members of the book sector, which include other kinds of small and medium sized businesses other than the publishing firms, such as bookstores and distributors.
Finally, we must not fail to stress that, together with the benefits of an economic nature mentioned, the work of organisations such as CEDRO produces extremely important cultural repercussions. By supporting the creative work of writers and translators and the processes for the production of books, sheet music and periodicals, CEDRO contributes to ensuring that the public will continue to enjoy these cultural goods.
Best Practice contributed by
Technical Manager. CEDRO, Spain
Madrid, 29 January 2005