Collecting the Uncollectable: A Job That Someone Has to Do

By Bob Jenkins

According to Compact Collections Director and General Manager John O’Sullivan, “it is surprising how many companies, don’t even know they are owed money, much less how to set about collecting it.”
In 1994, music publisher Palan Music got together with PACT (a U.K. trade body for independent television and feature-film producers) to form Compact Collections, a company established with the specific aim of “collecting the uncollectable.”

“PACT,” said O’Sullivan, “was aware that many of their members were either ignorant of the existence of publishing rights, or else ignorant of how to collect on them, but PACT itself didn’t have the human resources to effect these collections on behalf of its members. So, it turned to Palan, as the company already had very comparable experience in the music publishing business.” This lead to the establishment of Compact; although originally a joint venture with PACT, the company is now privately owned and PACT is no longer directly involved.

The rights, which Compact specializes in protecting, sound straightforward enough: simultaneous cable retransmission, blank-tape levies, educational copying, rental royalties, theatrical box-office levy and public performance levy. As O’Sullivan pointed out, the importance of these various rights to a company will vary according to the nature of the company’s business, so that while, in general, cable retransmission and blank tape are more important, for companies such as Discovery and National Geographic, educational copying will assume a much greater significance.

As Compact’s list of clients, now totaling more than 150 companies, including Fremantle, Granada, Channel 4, Discovery, National Geographic, Five, Icon and Sesame Workshop, will testify, if you or the agency you appoint knows he way this side of the business works, this particular game can be a very rewarding one.

Dan Allan, Fremantle International Distribution’s chief operating officer, is one such clients. “I would say,” ventured Allan, “that we have been very pleasantly surprised by the amount of money out there that we certainly would not have been able to access [without Compact].” Although he conceded that this might be because “we were in a catch-up period, which might mean income from these sources trails off,” but added, “so far it has been a fairly substantial bonus.”

Icon Entertainment’s Humphrey Gravell acknowledged “it is certainly true that since we took Compact on board, collections have increased, and I am very happy with their performance and with the funds they have sent us on a regular basis,” adding, “I am also happy not to have to deal with all the individual societies.”

Both companies appointed Compact just over two years ago after previously handling the collection of these monies internally. But even for significant companies such as Fremantle and Icon, it is questionable whether the revenues would justify the establishment of an operation such as Compact, which employs 15 people in the U.K. who have over seventy years of experience with collections between them. Compact has also recently opened offices in Los Angeles, to add to its existing representation in France, Germany and Spain. All of which, said John O’Sullivan, “make Compact the biggest player in the collections game, with annual collections on behalf of clients running into several millions of dollars.”

Looking to the future of the collections business, O’Sullivan predicted, “the major changes on the horizon will include the introduction of these rights in Eastern Europe and Latin America,” while in Australia he expects to “witness the introduction of cable retransmission and blank tape levies.” Adding, “further down the road new rights will be generated by the rollout of new digital technologies.”

As for the future of Compact, growth is in the air with the establishment of a new service - CAM - geared towards film collections. O’Sullivan admitted that “there are well-established companies in this field such as Freeway, Vintage and N.F.C.,” but, he countered, “we have just hired Alun Tyers who has 25 years of experience with N.F.C. and we plan to offer clients the ability to track licenses. So, if, for example, you have licensed a film for two transmissions over five years, we will be able to tell you when the second run has been taken. If this is prior to the expiry of the five-year period then the license has been exhausted and the client will be able to immediately negotiate a renewal without waiting for the time-period to expire.”

Both strategies would seem to herald a bright future for the company that likes to “collect the uncollectable.“