Why Collective Management Organizations Matter in a Digital Copyright Economy (Part I)

By Somadina Eugene Okorie

Creative industries are no longer peripheral to national development. They are central drivers of economic growth, social cohesion, cultural identity, and innovation. From books and digital learning platforms that shape education, to scientific journals that fuel research and technological progress, creative works underpin modern knowledge economies. Music, film, literature, and other forms of artistic expression also play a vital role in social life, fostering shared experiences that transcend borders and cultures.

In an increasingly interconnected and digital world, the protection of national creativity and cultural diversity has become both an economic and a strategic imperative. A thriving creative sector ensures that local voices, traditions, and artistic expressions are preserved and meaningfully represented in the global cultural landscape. However, creativity cannot be sustained without economic viability. For creators to continue producing new works, they must be able to earn a living from their intellectual output.

This reality places copyright at the heart of the creative economy. Effective copyright protection ensures that markets function properly, piracy is reduced, licensing systems operate efficiently, and creators receive fair remuneration for the use of their works.

Copyright Protection Under Nigerian Law

Nigeria’s Copyright Act 2022 provides a comprehensive legal framework for protecting the rights of authors and other rightsholders. Sections 8, 9, 10, and 12 of the Act clearly define the proprietary rights of copyright owners. Any use of a protected work without the express authorization of the rightsholder constitutes infringement under Sections 15, 28, and 30 of the Act.

Copyright comprises two main categories of rights: economic rights and moral rights.

Economic rights are built around exclusivity. They grant the rightsholder the authority to decide who may use a work, under what conditions, and for what purpose. These rights include, among others, the right to reproduce the work, communicate it to the public, and create translations or adaptations. Rightsholders may exercise these rights directly or mandate a professional body, such as a Collective Management Organization (CMO), to manage them on their behalf.

In certain cases, however, the law substitutes exclusive rights with a right to equitable remuneration. Under such regimes, the rightsholder cannot prohibit use but is entitled to compensation. Examples include private copying compensation schemes and the resale right (droit de suite) for visual artists, which entitles them to a percentage of resale prices when their works are sold through galleries or auction houses.

Moral rights, on the other hand, protect the personal and reputational bond between creators and their works. These include the right of paternity, which allows authors to claim authorship, and the right of integrity, which enables them to object to distortions or modifications that could harm their honour or reputation.

Exceptions, Limitations, and the Three-Step Test

Copyright law is not absolute. National legislation may introduce exceptions and limitations to exclusive rights, provided they comply with international treaty obligations. These limitations are governed by the three-step test, a legal standard embedded in major international copyright treaties and reflected in national laws.

Under the three-step test, exceptions and limitations are permissible only if they meet all three cumulative conditions:
they must apply only to special cases;
they must not conflict with the normal exploitation of the work; and
they must not unreasonably prejudice the legitimate interests of the rightsholder.

Policymakers play a crucial role in applying these criteria, as they must strike a careful balance between protecting creators’ rights and safeguarding legitimate public and user interests. Different legal systems implement these limitations differently. Common law jurisdictions such as Nigeria, England, and India often rely on fair use or fair dealing doctrines, while civil law countries like Germany and Argentina adopt narrowly defined statutory exceptions.

Where an exception or limitation applies, the use is permitted by law without the consent of the rightsholder and, in most cases, without remuneration. In such situations, no rights management mechanism is required.

Piracy, Licensing, and the Limits of Enforcement

Unauthorized use of copyrighted works remains one of the most serious threats to creative industries. Infringement can range from large-scale commercial piracy to unintentional misuse arising from misunderstanding of copyright law. Regardless of intent, infringement undermines creators’ rights and the sustainability of creative ecosystems.

Organized piracy, particularly in the digital environment, poses a significant challenge. Illegal streaming platforms, file-sharing networks, and unauthorized download services enable cross-border infringement on an unprecedented scale, making it difficult for legitimate businesses to compete.

While enforcement is essential, it is not sufficient on its own. Legal alternatives must be readily provided. Affordable, accessible licensing options reduce incentives for piracy and promote lawful consumption. Both individual rights exercise and collective management play critical roles in this context, enabling rightsholders to license their works efficiently while expanding public access.

Beyond outright piracy, other forms of infringement, such as unauthorized copying of educational materials, have now become widespread. In these cases, licensing schemes administered by specialized CMOs often provide the most effective solution, particularly for universities, research institutions, and corporate users.

Individual vs. Collective Exercise of Rights

In principle, copyright grants rightsholders exclusive authority over how their works are used. This control forms the foundation of the copyright system. At the same time, creators generally benefit from widespread dissemination of their works, provided they receive appropriate remuneration.

In some sectors, rights can be exercised individually through direct contractual relationships. This is common in book publishing, film production, and other industries where licensing is relatively straightforward.

However, individual licensing becomes impractical when works are used on a mass scale, across multiple platforms, or across national borders. Radio broadcasts, streaming services, cable retransmissions, and large-scale educational copying involve vast repertoires of works and numerous users. Managing such uses individually would be inefficient, costly, and often impossible.

It is precisely in these contexts that collective management becomes indispensable.

Collective Management and Its Societal Value

Section 39 of the Copyright Act of Nigeria establishes the legal foundation for collective management, while the Collective Management Regulations 2025 provide operational guidelines for CMOs. These organizations negotiate licences, collect royalties, and distribute income on behalf of rightsholders.

Licensing agreements are often negotiated between CMOs and user associations representing industries such as broadcasting, hospitality, education, and cable services. These negotiations help ensure fair, transparent, and practical terms that reflect both copyright protection and business realities.

Globally, the economic significance of copyright industries is well documented. Studies conducted in more than 50 countries using the World Intellectual Property Organization (WIPO) methodology show that copyright industries contribute an average of 5.44% to national GDP and 5.78% to employment. These sectors often grow faster than the broader economy, generating substantial revenue and supporting millions of jobs.

Effective collective management systems also benefit users by reducing transaction costs, improving legal certainty, and facilitating access to creative content. Royalties collected by CMOs circulate back into the economy, enabling creators to reinvest in new works, employ professionals, and contribute to public revenues. In many jurisdictions, CMOs also support cultural, educational, and social initiatives.

A strong regulatory framework, combining clear legislation, effective oversight, and robust internal governance, is essential to ensure transparency, accountability, and efficiency in collective management. When properly aligned, legal and institutional frameworks complement each other and strengthen confidence in the copyright system.

Looking Ahead

As Nigeria’s digital economy expands, the role of Collective Management Organizations will only grow in importance. Yet collective management also raises complex questions about governance, transparency, competition, and the balance between rightsholders and users.

In the next part of this series, we will examine these critical issues more closely, exploring regulatory challenges, best practices, and the future of collective management in a rapidly evolving and complex digital landscape like Nigeria.

About the Author

SOMADINA EUGENE OKORIE, Esq. is a WIPO-certified advocate, intellectual property/business solicitor, and researcher based in Lagos. His work explores how legal innovation can drive inclusive economic growth and cultural preservation in Africa.

NB: Some of the references in this publication are extracts from the author’s WIPO Academy certification course in 2025.