Russian Authors’ Society and Russian Organization for Intellectual Property (VOIS) will reduce the financial burden on regional radio stations

Russian Authors’ Society and Russian Organization for Intellectual Property (VOIS) will halve the size of the mandatory minimum fee from regional radio stations.

Between April 1 and September 30, the minimum royalties charged to regional radio stations will be reduced by 50%. Russian Authors’ Society and Russian Organization for Intellectual Property (VOIS) informed about this decision in a letter addressed to the President of Russian Academy of Radio. The document also mentions the readiness of organizations to refrain from applying penalties to users who faithfully fulfilled the terms of contracts in previous periods, if they paid remuneration by June 30, 2020. Russian Academy of Radio expressed gratitude for the steps taken and understanding of the difficult economic situation due to the coronavirus pandemic.

Due to the reduction in advertisers’ budgets in the current situation, regional radio stations were the most affected, explained Maxim Dmitriev, Chairman of the Board of Russian Authors’ Society: “Many of them had a catastrophic decline in advertising revenues, but they still had to make a minimum payment – a certain fixed amount per quarter. Now it has dropped by half. Thus, we want to help these radio stations get through the difficult times. We perfectly understand the economic difficulties that market participants, including our payers, have to face, and are ready to meet them halfway.”

Aleksey Karelov, General Director of Russian Organization for Intellectual Property (VOIS), said that these support measures were taken in response to a large number of requests from regional radio stations and TV channels. “It is extremely difficult for them now, so we decided to follow the path of reducing the minimum amount of royalties. I think it is worth explaining what is meant here. We are not talking about the interest rate of royalties – if the incomes of radio stations have fallen, then they will go down for Russian Authors’ Society and, as a result, for the authors. Everything is logical. There is no such correlation in the case of the minimum fixed amount of royalties at our rates. Even in a difficult situation, the company has to pay the same amount. This is wrong, so it was decided to cut it in half,” Karelov added.

The industry appreciated the measures taken by Russian Authors’ Society and Russian Organization for Intellectual Property (VOIS), noted Yuri Kostin, Vice President of Russian Academy of Radio, head of GPM-Radio holding: “This is a truly worthy partner decision, balanced and timely. We are glad that after the negotiations on behalf of Russian Academy of Radio, my colleagues and I managed to reach agreements, rather not for ourselves, but for the regional players who have suffered greatly due to the pandemic. Friends are known in trouble, in this case – partners are known in crisis. I hope that the entire industry will not forget about this and will continue to work in a disciplined way with the collective management organizations.”

From a legal point of view, this decision will require a revision of the methods for calculating compensation for certain groups of violators, according to the founder of the Online School of Intellectual Property Appraisers, forensic expert, member of the Scientific Advisory Council at the Court of Intellectual Property Rights, leading researcher of Russian Academy of Sciences Alexander Kostin: “This is good news, as such an initiative by Russian Authors’ Society and Russian Organization for Intellectual Property (VOIS) will reduce the costs and risks of audio content licensees. But here it is worth considering the fact that when recovering compensation “in two times the cost of the right to use” according to Article 1311 of the Civil Code of the Russian Federation, the basis will be a license agreement and the minimum amount of payments prescribed there. That is, if the violation occurred during the period of this reduction and corresponds to the “parameters of the minimum payment”, then forensic experts will need to develop a new methodological basis for calculating the amount of compensation for a certain group of violators under Articles 1301 and 1311 of the Civil Code of the Russian Federation.