The Founding of TALI
TALI was founded on December 14th, 2000, to bring some order and establish an equitable and routine workflow to the field of royalty rights of screenwriters and directors, as well as to collect and distribute royalty payments. The founders had realized that it was an ambitious and risky project, but were under the impression that the company would be up and running within a reasonable amount of time. Unbeknown to them at the time, many powerful forces would make great efforts to discontinue this endeavor and many years would in fact pass before this vision would indeed become a reality.
The timing of founding TALI was no coincidence. During the 90’s the local Israeli cinema and television creation was coming into its own as commercial subscription based television started. – For the first time, the Israeli audience showed interest in Hebrew speaking TV series, but the screenwriters and directors – those responsible for the creations – had degrading work and pay conditions. It was painstakingly clear that despite their direct contribution to the success of Hebrew TV series , they were not compensated fairly for the fruits of their labor.
In 1999, the chairman of the Screenwriters Association at the time, Avi Shemesh, assembled an inspection committee regarding the representation of screenwriters in ACUM – The Society of Authors, Composers and Music Publishers in Israel. The inspection revealed that ACUM distributed royalties in a non-transparent way that was extremely biased against screenwriters; movie screenwriters were not even entitled to royalties and screenwriters had no representation in the board of directors. The conclusion was that screenwriters must immediately found an independent royalty company. Despite the fact that this was a risky move, during their meeting the members expressed strong support for it.
The first significant preliminary decision made before founding a company, was whether to join forces with the directors. This followed the founding of a royalty company named TABI by a group of directors headed by director Ori Inbar. Some screenwriters were against this since Israeli law did not expressly define a director as a “creator” and they were concerned that directors would be a liability for the screenwriters. Avi Shemesh and Ori Inbar insisted that this complex project, still only an idea at this point, should be a joint endeavor and managed to convince members of both groups to unite and found TALI – The Collecting Society of Film and Television.
The first board of directors of TALI appointed Avi Shemesh as CEO of the company and Ori Inbar was appointed as Chairman. Funding for the company was obtained with a bank loan secured with the help of personal collateral provided by some TALI founding members.
From the outset, ACUM used bureaucracy to make the transition from ACUM to TALI almost impossible while Channel 2 franchise holders took advantage of the situation and implemented the policy of “divide and conquer”. Some ACUM member screenwriters (even those who had voted for the move) feared that they may personally lose their existing royalties from ACUM when ACUM made threats to this effect about how the move would be irreversible.
At this point, about 100 “ideological” screenwriters backed TALI”s move. This number was big enough to justify founding an independent royalty company, but too small to give it the necessary clout. As a result, Channel 2 franchise holders – the most significant broadcast channel at the time – felt assured that they could stall and bide their time, while offering ridiculously low sums of money. Other players in the industry chose to ignore the new royalty company completely.
At the beginning of 2002, one and half years after its foundation, TALI had not yet collected or paid even one NIS to its members. It was crystal clear to everyone that if royalties were not paid for 2001, this ambitious project was doomed.
The First Royalty Distribution
Several members of TALI decided to go to the offices of The Council of the Second Authority for Television and Radio to demand its intervention. Consequently, the Council sent a harsh letter to the franchise holders. Another significant step was the decision of TALI to file for a court injunction against RESHET (one of the franchise holders).
A few days before the court hearing TELAD (one franchise holder) became the first to transfer advance payments for the royalties of 2001 to TALI. Reshet and Keshet followed suit and the injunction was never litigated in court. Finally in April 2002, TALI became a paying royalty company.
Following this move, TALI gained the confidence of the screenwriters and hundreds of them started to transfer from ACUM to TALI. (TALI named them the second wave of migration) But even after the justified euforia, these were still only advance payments as opposed to routine and systematized royalty payments – the original goal for founding TALI. TALI started to realize that although rights are something you can fight for, fighting is not the best way to gain money.
In 2003, advocate Aharon Nahumi was appointed as the legal counsel of TALI. For the first time, Nahumi came up with a well-thought strategy for protecting the screenwriters’ and directors’ royalty rights and for negotiating with the broadcasting companies.
Nahumi’s view on negotiations was that it is better to receive one NIS by reaching mutual agreements than 1.5 NIS after prolonged legal battles. After all, TALI would need to establish a long term working relationship with all broadcasters.
This approach became part of TALI’s DNA, realizing that only patience, insistence and mutual respect would allow the young royalty company to reach its goal.
In 2005 this approach started to show promise: TALI signed comprehensive agreements for screenwriters with the franchise holders of Channel 2, Channel 10, YES and many other bodies.
The Rights Protection Revolution and the “TALI Clause”
It is worth emphasizing that the core of TALI’s work focuses on right protection, as the body holding the rights transferred to it by its members. These rights are the basis for the demand to receive royalties for the license of use. But back then, the whole issue of copyright protection was not clear to the members of TALI, and many thought that “rights” and “royalties” were natural rights – belonging to the creator from the beginning of time, forever and indisputably.
Meanwhile, in real life, broadcasters and producers were opposed to copyright protection – claiming that it was impossible since producers must own the rights. The unfair balance of power gave (and still gives) producers and broadcasters a significant advantage when negotiating with an individual screenwriter or director, so TALI members were usually left with no choice but to settle. Even when creators thought they had managed to retain their rights they found out later that vaguely worded clauses were in fact not legally binding.
Opposition to TALI was also voiced in-house. Some TALI members claimed that the broadcasters and producers may have a valid point asserting it was indeed impossible to retain rights. They thought that TALI should adopt a different policy – a solution in the form of a “contractual” clause to secure the transfer of royalties, without mandating the retention of rights.
Adv. Nahumi objected to this approach and insisted that retaining the right to royalties must be proprietary, clear and standardized, or the screenwriters and directors may find themselves, with TALI as their representative, without a concrete legal right to royalties. TALI understood the heavy price the royalty company and its members may have to pay for this insistence, but also realized that otherwise TALI would have no long term justification to exist. In the end, TALI’s board of directors chose to insist on the proprietary right option.
From this point onward, CEO Avi Shemesh and Adv. Nahumi set out on a long path, that took many years, to anchor and cement TALI’s right retention policy.
The first step was to ensure that all the rights of all works represented by TALI were indeed protected. For this purpose, TALI made one of the most difficult decisions it had ever made – to demand that all of its members send TALI every personal agreement they had made in order to check the copyright clause.
At the same time, TALI started formulating an accepted uniform copyright protection clause, to be accepted by all broadcasting bodies. This would release the screenwriters and directors from the need to fight for their rights individually in each and every production. To achieve this, TALI listened to the complaints of the broadcasters and producers and attempted to find a real solution to their concerns. The claims addressed the fear that if creators owned partial rights to their work, commercializing a creative work and selling it to other broadcasters or overseas would be nearly impossible.
Finally, Adv. Nahumi came up with a solution – a uniform minimal clause that reduces the proprietary right of the TALI member (transferred to TALI) to only a slice of a right – God’s little acre – a right to collect royalties and without preventing or delaying any other usage of the work. The clause was formulated in a way that would protect the right to royalties also for future usages of new media, VOD, the Internet and any technological future development.
After a sisyphic process which included dozens of meeting between representatives of TALI and the channel franchise holders, most broadcasting bodies were persuaded to accept the wording which coined as the “TALI Clause”, which gradually lifted the burden off each individual TALI member. The ramification is that TALI members can routinely insert the clause into any agreement and protect their right to royalties for their entire life and for 70 years after their passing – to their beneficiaries.
However, as we shall soon see, this did not happen in the course of one day.
A Critical Crisis With HOT Company
HOT Cable TV continued to follow the old paradigm by denying the royalty rights of screenwriters and directors. At that time, HOT was a monopoly in the field of subscription cable TV. Ram Balinkov – HOT’s CEO – ordered that screenwriters and directors would not be allowed to insert the TALI clause to agreements regarding HOT productions. Non-compliance would lead to termination of work. In other words, TALI lost its justification for demanding licensing fees from HOT, the biggest user of TALI members’ creative works.
In the same vein, the Independent Producer Association, also demanded its members to forbid right retention in all industry productions. Broadcasters were following these events with much interest and eagerly awaited TALI’s defeat so that they too would be exempt from paying royalties to the creators.
Screenwriters and directors heroically stood their ground in the face of this monopolistic and aggressive attack. They refused to sign agreements with HOT, and some of them paid the price of losing their job (e.g. a screenwriter in the series Ha-Shminiya that was immediately fired after refusing to sign an agreement with no TALI clause.)
At the same time, unions of screenwriters and directors launched a public campaign including demonstrations and public artistic events, such as musical events, preventing HOT’s premier screenings, etc. The events, led by the creator Amit Laor, Chairman of the Screenwriter Union then, exposed the hypocritical conduct of HOT – on the one hand they were launching campaigns bragging about their original drama and documentary series, but on the other hand, stealing the rights of the creators of these series.
The legal battle became more and more creative. TALI initiated a kind of “voluntary liquidation”- by returning the rights to those TALI members who successfully retained the rights to their creative work. These members, with TALI’s help, sued HOT individually, and after winning, the court ordered HOT to enter into a mediation procedure with them to determine the amount of royalties that each individual was entitled to.
These measures damaged HOT and forced them to rethink their approach. The last straw that broke the monopoly, was the understanding that once it was obligated to enter into mediation with individual screenwriters and directors separately, doing so collectively with TALI seemed like a better option. This was important proof that in a regulated industry, there is a need for a royalty company not only for the creators of the work, but also for the users of these works – by eliminating for the latter the “headache” of dealing with each screenwriter and director individually.
In 2006 HOT signed an agreement with TALI, stating that they accept the TALI Clause.
The First Royalty Distribution to Directors
TALI had not forgotten the directors, of course. The royalty company’s strategy was first to secure the rates for the screenwriters – who had “older” rights – and then begin deliberations about directors’ rights. At the same time, TALI filed lawsuits, over the course of several years, until the court finally declared that TV and cinema directors do own the copyrights to their creative works.
The first royalty payment to directors took place in 2007. Now that there was money to distribute, the question remained how. TALI had already set up repertoire committees back in its early days. These were composed of the best screenwriters who submitted their recommendations about how royalties would be distributedfor the various creative works represented by TALI. Now that the directors’ creative work had been added, this important committee needed restructuring to reflect this. Over the years, this committee, which operates with full transparency, has become an organic part of the corporate governance of TALI.
In 2017 another attempt was made to reach an agreement with the Israeli Broadcasting Authority. A mediation procedure was headed by former Supreme Court Justice Dalia Dorner. The IBA refused to acknowledge the screenwriters’ and directors’ rights, claiming that the law states that “The rights of the creators to a work commissioned by the IBA belongs to the IBA, unless otherwise agreed.” (Section 38 of the IBA Law). Dorner dismissed this claim and held that the law gives the IBA discretion, therefore, it is expected to make the moral choice and protect Israeli creators. Left with no alternative, the IBA signed an agreement to acknowledge the TALI Clause, but this was never implemented. In fact, the IBA never allowed TALI members to retain their rights. This issue had never been resolved until the closure of the IBA, the enactment of the Public Broadcast Law (which cancelled section 38 above) and the beginning of KAN 11 broadcasts in 2017 (more to come about this).
The Copyright Law
This key event could have been the happy ending to the story of the early obstacles of TALI’s creation, which would have paved the way for the royalty company to finally focus on the collection and distribution of royalties. However, two new and greater threats on TALI’s existence loomed, and this time they came from the state itself.
The Ministry of Justice submitted a new Copyright Law bill with a “tiny” change; the declaration that the original right to the work belongs to the producer and not to the creator. This meant, in effect, that the creators would lose the retention of rights that they had fought so hard in order to receive royalties. And without rights, TALI would lose its raison d’être -reason to exist.
TALI actively immobilized to face this challenge. Due to the uncompromising position of the Justice Ministry and in an effort to ensure the payment of royalties – TALI suggested a far reaching concession -to reach a comprehensive agreement in the industry in return for TALI’s agreement to transfer the rights to the producers. Extensive discussions ensued between TALI and the TV franchise holders, but the Producer Union, feeling confident that they would prevail, refused this offer of compromise.
In retrospect, this turned out to be the producers biggest mistake. In the course of the discussions, TALI managed to convince the Chairman of the Economic Committee, Moshe Kahlon, that this would be a destructive measure that would leave the creators without any rights. This led to a change in the position of the committee, and in the last moment, during a deliberation about the final wording of the law, TALI managed to steer the committee towards a version that returned the original right to the creative work to its creator.
The AntiTrust Commissioner Recommends To Close TALI
Once TALI sighed in relief after averting this threat, it had to start dealing with another one: the threat of closure due to the decision of the AntiTrust Commissioner (today named the Competition Authority).
According to law, businesses and freelancers are not allowed to join forces to coordinate prices. The question arises: how had TALI operated during all of those years? Most of its members were freelancers – as is the case in all royalty companies. TALI had not operated against the law, but rather made a point to inform the AntiTrust Authority about its activity, as early as 2003. At that time, the Authority responded with a letter stating that it would inspect TALI right after it was finished inspecting ACUM. Years passed, and TALI presented arguments and evidence to the Authority, to show that the sole creator could never realize his/her right to royalties without a royalty company, as well as the fact that it was unprecedented around the world to ban the activity of a royalty company.
In 2013, despite the fact that ACUM received a permit to operate as an AntiTrust, the commissioner at the time, David Gilo, issued an opinion to the AntiTrust Tribunal stating that TALI was a cartel, or in other words, TALI as a fully operational company had no reason to exist. TALI members understood the ramifications of this decree -trampling the standing and livelihood of the creators and a fatal blow to the entire local culture sector. The creators, joined by many from the TV and cinema industry, as well as intellectuals and Israeli culture aficionados who supported TALI’s legal battle to exist, started a wave of demonstrations and intensive protests.
Urgent meetings between TALI representatives and Members of Knesset from all factions, led in 2014 to the passage of a bill to amend the Cinema Law in a preliminary reading (initiated by Chairman of the Education Committee at the time Amram Mitznah, and MKs Meirav Michaeli and Gila Gamliel) allowing the each creator of audiovisual works to manage his\her rights through a corporation for collective management of rights.
TALI Completes the Process of Its Regulation and Broadens Its Reach
In 2014 TALI’s board of directors chose Ophira Lubnitzky as the CEO of TALI. Lubnitzky’s experience included several management positions in the fields of arts and media, one of them being the CEO of the Bezalel Academy of Arts and Design. The most urgent mission was to finish the regulation of TALI. True, the bill passed in the preliminary reading averted the immediate danger to the existence of TALI, but the bill still needed to survive the second and the third reading. More importantly, TALI’s operation as a “cartel” was approved by law, but its terms of operation were to be determined by the Competition Authority.
The negotiations about the terms and limitations that the Competition Authority subjected TALI to took two long years, in which TALI had to make sure the terms would enable it to continue to successfully represent the screenwriters and directors when dealing with the wide variety of users of their works. In 2016, TALI successfully reached an agreement with the Competition Authority about its terms of operation, and these were ratified in the Competition Tribunal’s holding.
Now, the road to broaden the scope and variety of users had opened, since it was evident to all that broadcasting channels were not the only users of TALI’s works. For example, throughout Israel, many activities make use of TALI members’ works, which is the responsibility of local and municipal authorities. After years of refusal by these authorities to deal with TALI, agreements were signed with most of the local authorities in Israel, as well as with gyms around Israel.
Two Groundbreaking Agreements – YouTube and Public Broadcasting
In 2017, TALI became the second audiovisual royalty company in the world that signed a licensing agreement with Google – YouTube’s holding company – which is the biggest website for hosting and sharing audiovisual works. The agreement with this technology giant enabled TALI to cement its position in the new media world, which has presently become the main arena for the transfer and usage of audiovisual content; which can be expected to be a continuously growing trend.
Concurrently, another historical achievement was regulation of the relationship between TALI and the Public Broadcast Corporation. Since TALI’s founding, the IBA refused to acknowledge TALI’s members’ rights, despite the agreement signed in 2008 when the IBA accepted the TALI Clause. However, in practice, it refused to allow its implementation. With the closure of IBA in 2017, negotiations commenced between TALI and KAN – the New Public Broadcast Corporation. In 2018, an agreement was finally signed in which TALI achieved for the first time, the recognition of rights for past creative works of TALI members, who had no rights before and would now receive their rights retroactively.
Victory in the Supreme Court of Israel
“The blank cassette law” was enacted in the 80s, and stated that creators, performers and producers would be compensated for the fact that their works would be recorded on blank cassettes. According to the law, ACUM – the big company representing creators – was supposed to distribute the money paid by the state to other royalty companies as well. True, cassettes are not used anymore, but over the years funds accumulated in ACUM – and ACUM had refused, unexplainably, to transfer them to TALI, claiming that screenwriters and directors did not in fact hold the rights related to the “cassette law”. TALI filed an action in court, which acknowledged the rights of screenwriters and directors to receive compensation. Nevertheless, ACUM appealed to the Supreme Court, which finally ruled, in 2019, that TALI was entitled to a third of the funds according to the blank cassette law. The money was distributed by TALI to its members, according to a usage key determined by the board of directors.
Immediately after this victory in court, TALI chose to let bygones be bygones, and joined forces with ACUM and other companies, to demand that the state update the definition of recording to reflect technological progress. In addition, this union is trying to bring a change in legislation to extend the scope of the law to include new recording media. Due to the two- year political crisis in Israel, these attempts have taken longer than expected.
Looking Forward: The Future Lies in the Internet
Once appointed, Lubnitzky,backed by the board of directors, led a policy that puts the onus on finding solutions to protect copyrights and royalties in the new reality – one in which classic TV is losing more and more viewers to the Internet and web-based TV; while original content is less and less protected by regulation.
Revenue from original content is continuously rising as fiber optic networks provide every consumer access to this content and social networks are spreading it at an ever increasing speed. However, paradoxically, the creators of these works are earning less and less of the revenue generated by their own original content creation.
In 2018 TALI intervened and influenced the wording of the amendment to Section 5 of the Copyright Law. The original amendment, as submitted, completely ignored technological progress. Even worse was that it portrayed Internet providers as indifferent and passive players in transmitting the content to the public, effectively relieving them from any responsibility. For two years, TALI worked relentlessly to embed the necessary changes in the amendment proposal, created a united and strong front with all creators’ organizations and led to the approval of the amendment to Section 5 of the Copyright Law by the Economic Committee of the Knesset. In the end, the current amendment addresses the reality of rapid technological progress as proposed by TALI.
These days, TALI is tirelessly and continuously working to stay in touch with local and international royalty companies and with CISAC – the International Confederation of Societies of Authors and Composers, as well as gathering data and responding quickly and efficiently to the new reality, to protect the screenwriters and directors and their content in the new world.
