Collective rights management, diverse views

AGICOA versus ProdJus: Round TwoEven members of the two producers` organisations, Hungarian Producers` Association (MPSZ) and the Association of Independent Producers (FPSZ) have different views on the question of managing the collective rights of film pr

In September AGICOA Hungary issued an open letter to Hungarian producers, prompting several reactions, also in the shape of open letters., came from György Sándor, president of the recently formed ProdJus, and György Kabdebó, president of Filmjus both commented on the letter by Geneva-based AGICOA.

Documents released by the two organisations reveal several common goals. They both want to see a rise in producers` share of production rights, currently at a dismal 13%, a European low, and have both pledged to push for legislation on illegal film downloads in Hungary.

Filmhu spoke to Dr Katalin Horváth, of Sár and Associates Law Firm, representing AGICOA Hungary. In their view AGICOA Hungary fulfilled the legal requirements to be registered successfully as a collective rights management organisation, so it is now up to the Ministry for Education and Culture (OKM) which organisation will succeed Filmjus in the collective film production rights management. “AGICOA Hungary`s founding members and the studios that have expressed interest in joining together possess rights to more than half of Hungarian film assets, and the majority of rights on foreign films for cable television networks. Several independent studios have also joined the association. Hungarian Producers` Association and the Association of Independent Producers have both expressed their intention to cooperate with AGICOA Hungary, and we have attached these letters of intent to our application for registration,” said Dr Katalin Horváth. She declined to name the members of the organisation and the signatories of the letters of intent as she did not have their approval to do so. The association is still expanding its membership.

Dr Csaba Sár at the 2008 Producers Meeting Phtos by Dániel Szandtner

Dr Katalin Horváth said that “the current representation of producers in Hungary is inadequate since no-one knows where producers` royalties have vanished. We are aware that several Hungarian producers, and the majority of Western European and overseas film studios have not received their royalties, which means that Filmjus had not paid 80% of the film studios for their films in its ten years of existence.” “Since law prescribes a monopoly in the field of collective rights management, for filmmakers to have a new collective rights management organisation you need an agreement with the existing rights management organisation,” the lawyer added. She went on to say that “an agreement between Filmjus and its breakaway successor is not sufficient for the latter to be registered as the collective rights management organisation for producers, as an agreement between all existing rights management organisations is necessary.”

Reacting to the accusations in an open letter by the president of Filmjus that “AGICOA is production agency representing American interests, regarding the Hungarian film market as a financial pump” Dr Katalin Horváth said, “legislation states that a collective rights management organisation can only be founded by the rights holders, in this case the producers.” According to the lawyer AGICOA Hungary was created to protect producers, which entails the representation of domestic and, due to legislation, foreign film production interests and rights. Dr Horváth also told us that the collection and redistribution of royalties after Hungarian films screened abroad and foreign films screened in Hungary happens according to a “mutual representation system” worldwide, as in AGICOA`s various organisations, in which the collective rights management organisations agree on mutually representing each other`s repertoire. “AGICOA currently has nearly five thousand registered members in 42 countries,” she went on.

György Sándor, president of ProdJus shared his organisation’s views with Filmhu. “According to the law we needed 11 members to form the association. ProdJus had 17 founding members, and a large group of the membership of the Hungarian Producers’ Association joined us. One member of the Association of Independent Producers has joined the ranks of ProdJus since its launch, and we are waiting for more applications. Another four film production companies and an animation studio have applied to join ProdJus since the start,” said the head of the organisation. In reply to our question about who had taken part in the founding of ProdJus from the Hungarian Producers’ Association, György Sándor informed us that four members of MPSZ’s board, namely István Juhász, József Cirkó, Iván Lakatos, and Dr Endre Nagy, joined as founders, but now there are 12 MPSZ members in ProdJus, the other members are independent film and television production companies. “By law ProdJus has to represent all producers, and that’s why we were not necessarily interested in swelling our ranks,” the president added.

György Sándor at the 2008 Producers Meeting

Since all 100% of the royalties collected is redistributed to the different professional organisation by ArtisJus, ProdJus first has to convince them to give up a few percent of their respective share for the producers. “Initial interest is hope inspiring, and professional organisations will have to realise sooner or later that it is in their interest as well to maintain the effective current system of collection and redistribution, and to lend their help to up the disproportionately small share of producers,” said György Sándor. “To fulfil this role legally assigned to us will require a change in legislation later on, and ProdJus can only start dealing with this matter after accreditation by OKM,” the president added.

“The primary goal of ProdJus is the elimination of professional discontent, and that is based on an immaculately functioning database”, said György Sándor. ProdJus would like to purchase and upgrade the database and software used by Filmjus. In reply to the question about how ProdJus would like to overcome difficulties in tracking screenings of Hungarian films abroad and collecting royalties for them, György Sándor reacted, “ProdJus is striving to enter into new mutual contracts with all of Filmjus’ foreign partners. Several foreign rights management organisations have also confirmed interest in mutual contracts once ProdJus has been officially accredited. ProdJus has no mutual contracts or a letter of intent to that purpose with AGICOA, who were not willing to perform rights management tasks for Hungarian films screened abroad in the last 10 years either.”

On behalf of Filmjus, the current collective rights management organisation, György Kabdebó, president, expressed his opinion to Filmhu.”Producers convinced me that I cannot represent directors’, cameramen’s and producers’ interests on my own. That is why ProdJus was created,” the president said. In reply to our question about how tracking of the screening of Hungarian films by foreign television stations is done, György Kabdebó explained that Filmjus signed mutual contracts with the rights management organisations of European countries, so that everyone gets to monitor their own national television stations, and royalties are redistributed according to each country’s domestic laws and the organisations’ internal rules. György Kabdebó also told us that “AGICOA is an agency, therefore not able to perform rights management tasks.” György Kabdebó informed us that the original September deadline for the Ministry’s decision has been postponed by a month, meaning it should be clear by the end of October whether ProdJus can take over collective rights management responsibilities. (According to György Kabdebó AGICOA Hungary’s application does not fulfil legal requirements, so the decision can only influence whether Filmjus can pass on its collective rights management responsibility.)

György Kabdebó at the 2008 Producers Meeting

We also asked a few leading producers about the debate. Péter Miskolczi (Eurofilm Studio), a member of the Association of Independent Producers (FPSZ), said that his main expectation of the new rights manager is to fight for a rise in the percentage share of producers, which is the lowest in Europe. “There is no unanimous voice of opinion on the issue within the Association of Independent Producers. I personally supported AGICOA with a letter of intent,” the producer said. He argued that only one organisation can receive the rights, and AGICOA seems better prepared. It is also important that they have international rights management experience. “I expect the system would be more transparent if AGICOA Hungary managed collective film production rights,” Péter Miskolczi added.

Producer Ferenc Pusztai (KMH Film) told us in relation to the AGICOA-ProdJus dilemma that he has read AGICOA’s circular and reactions to it, of course, but has not dwelt too much on the issue. “Circulars were coming left, right and centre, but they did not reveal any concrete plans from AGICOA about what and how they were planning to accomplish,” the producer said. He also objected to not knowing who were actually behind the initiative. “It is like a foreign company showing up and saying they would like to replace the Motion Picture Public Foundation of Hungary,” Ferenc Pusztai added.

László Kántor, president of the Hungarian Producers’ Association, also expressed his strong views on the issue to Filmhu. While the board of MPSZ supported the creation of AGICOA with 4 votes for, 3 against, 1 abstaining, but this is in no way a unanimous opinion, and the membership is also split on the issue.

László Kántor has cast his vote on AGICOA Hungary, as he said, purely on rational grounds. “Nowadays most Hungarian films are co-productions, and therefore it is evident that the co-producing countries will distribute and broadcast these pieces,” argued the producer. “International co-productions are not only understandable to Hungarian audiences, and so the chances are even greater that a other countries will screen them,” he added. “That is where the strongest argument for AGICOA comes into the picture, because an international organisation that has proved itself worldwide, and has the necessary infrastructure, can much more effectively monitor which parts of the world our films have been screened, which television stations or internet sites have run it, than a Hungarian based organisation protecting Hungarian interests,” argued László Kántor. The producer feels it would take years for ProdJus to grow up to the task of international monitoring, which would cost the industry a great deal of money. “AGICOA is an organisation based in Geneva, overseeing the whole of Europe. It has the staff to monitor films being distributed and screened abroad, and to collect royalties after those screenings,” explained the vice president of MPSZ.

The audience at the 2008 Producers Meeting

László Kántor also shared his personal experiences during our conversation. “I never received any foreign royalties through Filmjus, even though that should have happened automatically.” In Mr Kántor’s opinion producers’ share should be set between 40 to 60 percent since “it is the producer who takes risks when a new production is born. These percentage values are generally accepted in international circles.”

Producer László Sipos (ÚjBudapest Studio) argued for AGICOA Hungary as well. “This is indeed a well functioning organisation. They are in contact with producers and production organisations in many countries. You can register your film on their website and after your registration they will start tracking that given film. You do not have to pay a membership fee in advance, they will just deduct a certain percentage from the royalties collected for the screenings.” The producer summarised his reasons for supporting the international organisation by saying, “It is in AGICOA’s basic interest to collect the royalties for its contracted partners’ films since they get a certain percentage share of that amount.”

In reply to our question, whether it would be possible for the two organisations to share film production management rights, László Kántor said that in Spain the national rights management organisation signed a contract with AGICOA, so in theory the two do not exclude each other. Current Hungarian legislation does not allow for a set of rights to be managed by more than one organisation, so that would require changing the law, but that is not likely to happen in the next year or two. “I think it would be best if two organisations could exercise collective rights management responsibilities allowing everyone to decide who they put their trust in. It would also be beneficial because it would result in healthy competition which will generally influence each organisation to do better,” summed up the vice president of MPSZ.

Felícia Szél of the press office at the Ministry of Education and Culture talked to Filmhu about the accreditation. “In cases like this the examination of legal requirements is fairly complicated because it is not enough to have an agreement, other conditions also need to be fulfilled. A decision will be made when the relevant authority has concluded all necessary investigations and has registered the organisation as a collective rights manager.” Felícia Szél also informed us that the Ministry only acts when an application is received, and the registered rights manager (in this case from Filmjus) can hand over its rights as part of an agreement with the new organisation. We have not yet received an answer from OKM to our question whether the Ministry was treating AGICOA Hungary’s application for collective film production rights management as valid.

Vera Vodál