In 2011 alone, ECAD, Brazil's Central Bureau of Collection and Distribution, claims to have distributed R$ 2.6 million (US$ 1.48 mi) from Digital Media royalties, "benefiting over 21,000 composers, performers, musicians, publishers and phonographic producers."
Huge fuzz in Brazil's blogosphere! Brazilian Performance Rights Agency ECAD, which stands for Brazil's Central Bureau of Collection and Distribution, has sent messages to some Brazilian bloggers warning that they should pay copyright fees for embedding YouTube videos on their blogs or websites.
It takes seconds to start a blog with WordPress or Tumblr. Embedding a Youtube video onto a web page is as easy as cutting and pasting. A ten years old kid can effortlessly do it. In Brazil, the bloggers may be charged $200 monthly fee for embedding Youtube videos, even if Youtube Brasil already pays copyright fees.
Sounds like nonsense!? Astonishingly, according to absurd copyright laws in Brazil, the Central Bureau of Collection and Distribution is surprisingly correct in doing so.
ECAD, Brazil's Central Bureau of Collection and Distribution, is a performance-rights organization that protects its members' musical copyrights by monitoring public performances of their music, whether via a broadcast or live performance, and compensating them accordingly. ECAD can be described as the Brazilian version of American ASCAP or BMI, British PRS or Belgian SABAM.
ECAD has already registered 1,170 websites. According to the organization, this group of "large, medium and small" sites pay for the use of copyrighted music. In 2011, ECAD claims to have distributed R$ 2.6 million (US$ 1.48 mi) from Digital Media royalties, "benefiting over 21,000 composers, performers, musicians, publishers and phonographic producers."
O Globo, one of Brazil's leading newspapers, revealed that ECAD sent a message to Uno de Oliveira, owner of the nonprofit blog Caligraffiti. He was charged a monthly fee of R$ 352.59 (about US$ 200) for embedding a Youtube video in his blog. Then, O Estado de São Paulo, another leading newspaper, announced that the blog A Leitora ( "The Reader" in Portuguese) was the first to be charged the US$ 200 monthly fee for embedding an Youtube preview of the film Confessions of a Shopaholic.
Both blogs could be charged even more, but they were classified as "non-profit" webcasting. The other possible classifications are: podcasting (publishing excerpts from programs on the Internet that can be downloaded in mp3 format), simulcasting (simultaneous transmission of unchanged content) and setting (use of background music on website).
Yesterday ECAD was one of the hottest trends at Twitter Brazil. Artists, opinion makers, and celebrities twitted countless jokes relating to this episode. My favorite comes from the priest/singer Padre Fábio de Melo @pefabiodemelo: "At my place even the cock is forbidden to crow. I don't want problems with ECAD."
Some Brazilian bloggers refer to Brazil's omnipresent corruption and inefficiency, questioning whether artists will actually receive any royalties at all. Others complain about the ridiculous value of the fee. Indeed, the US$ 200 monthly fee is exorbitant, considering that Brazil's minimum wage is R$ 622 (or US$ 355). The underline message is that ECAD is greedy. After charging performance rights even from weddings with DJs, it's now aiming a bigger target market: Brazil's total online population of 80 million people.
Besides joking, virtually everyone protests against the nature of these monthly fees. YouTube Brasil already pays copyright fees to ECAD ( see details about how much Youtube Brasil pays on the bottom of the post). Therefore, charging bloggers as well is "double recovery." The question is: if embedded videos are, for all purposes, just links back to Youtube why should bloggers pay royalties?
The legal foundation for the royalties charged by ECAD to blogs is a federal law created in mid-February 1998 that has not been revised since its creation 14 years ago (article 5, section II of the law 9.610/98). ECAD found a loophole in this ancient law that allows blogs to be described as "relays" and thus also be subjected to a fee.
As absurd as it may sound, according to Brazil's copyright laws, ECAD is correct in charging monthly fees from bloggers. A law created such a long time ago is inadequate, to say the least. This situation reflects Brazil's urgent need to update its digital legal framework.
In fact, Brazil was recently ranked as the worst prepared nation to adopt cloud technology partially because of its weak legislation against cybercrime. Fabrice Grinda, serial entrepreneur and angel investor shares a story at Techcrunch that illustrates Brazil's disgrace:
Logistics and payments work in Brazil, but it's a dangerously litigious country, so startups often find themselves getting sued to oblivion. Grinda shared a story with the audience about a local e-commerce company that had its domain name taken away by some Brazilian judge, effectively killing its business overnight."
Despite, the shameful legal framework, Brazil's internet business is booming and receiving a lot of worldwide attention. For instance, Intel Capital has recently doubled its team to target more Brazilian startups. Further, this week Dilma Rousseff, Brazil's president, was present in the opening of CeBIT, the gigantic IT trade show taking place in Germany.
I believe that ECAD has realized that the ancient law will soon be changed. Therefore, the agency rushed to raise the largest amount of funds before a new copyright law is established. Reaching personal and nonprofit blogs may be seem as hitting below the belt. However, I insist that the problem is not ECAD or bloggers embedding Youtube videos. It's the law! The archaic Brazilian copyright law that was established in mid 1998 must be updated.
*How much does Youtube Brasil pays to ECAD?
According to UOL, one of Brazil's most visited websites, for every 150 thousand views on Youtube Brasi, the artist receives R$1,00.
According to Adnews:
YouTube Brasil pays 2.5% of its gross revenue per exhibition of songs protected by Ecad (Bureau of Revenue Distribution) Brazil. If the amount of the stipulated percentage does not reach BRL 258,000 (US $146,250) in a year, the site must pay the value as "minimum annual fee". Besides the minimum mandatory fee yearly, Youtube Brasil also pays ECAD a yearly "subscription fee" of BRL 645,000 (US $366,000). "
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