CRM in the Field of OMD
Supplementing the analysis of the limits to rights in the previous two chapters, this chapter deals with collective rights management (CRM) in the field of OMD. The relevance of CRM in the context of the limits to rights is twofold. Firstly, CRM is related to the voluntary limits of exclusivity, as opposed to the statutory ones. The sheer quantity of rightholders and services in the field of music creates very high transaction costs, making the individual rights management inefficient in many cases. As a result, in some areas rightholders traditionally opt for CRM, abandoning their own possibility of excluding third parties from the use of the subject-matter following the granting of rights to collective management organizations (CMOs). The rights management for a CMO typically becomes efficient only after it has accumulated a repertoire of a considerable size, and many CMOs tend to grow into natural monopolies. As a result, out of competitive concerns, CMOs are typically deprived by law or by a judicial order of the possibility of excluding from the use those third parties who are willing to pay the licensing fees, and are required to license their whole repertoire against the uniform royalty rates discriminating neither between the licensees nor between the rightholders. This situation stands in the middle between the full exclusive right (property rule) and the statutory limit of exclusivity (liability rule), and has sometimes been referred to as “contracting into liability rules” or “private liability rules”.