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Distribution of Royalties
For Composers / Authors
Copyright royalties collected from music users are distributed to lyricists, composers, music publishers, foreign copyright societies, and other copyright owners. Ensuring that the distribution is carried out in an equitable manner is JASRAC’s obligation to those who have entrusted the administration of their copyrights to JASRAC, as well as its duty to music users who pay the royalties.
Distribution of Royalties Based on Music Usage Reports
In general, royalties are distributed according to music usage reports submitted by music users. In categories such as live performances and performances by means of phonograms at bars and nightclubs, a large number of musical works are continuously used every day and it is difficult to receive program returns for all the works used. For such categories, distribution is based on data gathered through statistically reliable random sample surveys carried out under the supervision of expert statisticians. To make the distributions more accurate, music usage reports are also gathered directly from facilities which performances changes on a day to day basis, such as live music clubs. In the case of karaoke use at bars and karaoke boxes with which annual agreements with monthly blanket fees are concluded, royalties are distributed based on usage report data submitted by online karaoke transmission operators that indicate the number of times works are played back at each karaoke terminal.
Quarterly Royalty Payments
Royalty payments to copyright owners are made on a quarterly basis, in March, June, September and December according to the procedures stipulated in the Royalty Distribution Rules. At the time of distribution, a commission calculated within the administration expense rates stipulated in JASRAC’s regulations is deducted and used to cover JASRAC’s operating expenses.
Distribution of Broadcasting Royalties
Broadcasting royalties are distributed based on music usage reports submitted by each broadcaster. Reports used to be based on sample surveys (randomly selected broadcasters reporting one-weeks’ worth of broadcasts per quarter) for broadcasts using sound recordings. However, fingerprint technology* has gradually made census reporting (reporting every work used, as opposed to a sample report) possible with less effort, and public broadcaster NHK, as well as major commercial TV broadcasters and FM radio stations, have started to submit census reports to JASRAC.
*Fingerprint technology: by comparing and matching the characteristic information ( "fingerprint" ) of music tracks broadcast with fingerprints extracted from commercial sound recordings, broadcast works can be quickly and efficiently identified.
Usage Report for Interactive Transmission
In general, as digital content providers manage their music usage data electronically, JASRAC receives full census reports from digital content providers in electronic form. However, digital service providers have dramatically increased the number of works offered in their service catalogs and a great variety of digital contents are distributed in high volume. This has tremendously increased the workload and the cost required for the reporting and identification of musical works, and that situation has become an issue for both the digital service providers and the collective management organizations.
JASRAC, as well as other collective management organizations and digital service providers, established the Copyright Data Clearinghouse (CDC) in March 2009, in order to reduce the cost and workload for both sides. In April 2010, CDC commenced operations of its “Fluzo” system, which enables the identification of musical works by using fingerprint technology, and the efficient generation of music usage reports.