Copyright Review Commission Report - ICT Law and Regulation ...

3.2.14. With the liquidation of SARRAL, SAMRO expanded its collections to include mechanical royalties, andcomposers whose royalties had been collected by SARRAL moved over to SAMRO. An overlap developed inthat the combined number of composers for whose mechanical rights NORM and SAMRO were collectingexceeded 100%. The boards of NORM and SAMRO signed a memorandum of understanding to work togetherand approach the SABC in an endeavour to get a single blanket agreement in respect of mechanical rights.3.2.15. Ms Jill Galanakis, who appeared before the CRC on behalf of NORM, described the negotiations with the SABCas being “a really tough road. Many meetings were held and many others were cancelled at the last minute.”When asked why NORM had not taken the SABC to court, Galanakis said NORM did not have the funds to doso and, therefore, kept trying to negotiate. She said the mechanical royalties that NORM received were paid tothe music publishers, who shared them with the composers in terms of the contractual arrangements betweenthem, which commonly provided for an equal split.3.2.16. The SABC representatives said there had been difficulty in getting a mandate from the Board, which was onlyobtained in 2010. They stated that negotiations were under way and undertook to write a letter to the CRC on31 July 2011 to report the resolution of the issue of payment for mechanical rights and a further outstandingmatter relating to music videos, with the result that the only outstanding issue would relate to needletime. Earlyin August 2011, the CRC received a letter from the SABC in which it was reported:The SABC can confirm that it has reached agreements with NORM and SAMRO on the following terms: [a] a provisionallicence fee of R9,5 million to NORM covering the period November 2009 to 31 July 2011; [b] a provisional licence fee ofR10,5 million to SAMRO covering the period September 2009 to 31 July 2011; and [c] a provisional licence fee ofR1 million per month from August 2011, which will be shared equally by NORM and SAMRO. The amounts payable bythe SABC will remain provisional until a final determination by the Copyright Tribunal of the reasonableness or otherwiseof the licensing schemes proposed by the collecting societies.3.2.17. In consequence of the broadcasters' and retailers' failure to pay anything up to this time in respect ofneedletime, and the SABC's failure to pay royalties for mechanical rights since September 2009, musicianshave been deprived of substantial sums of money. Mr Sibisi, who appeared as a consultant for the SABC beforethe CRC and had previously been in the employ of the national broadcaster, agreed that the issues referred toabove “should have been resolved a long time ago”. He agreed that “certain things could have been done betterand that going forward the SABC does need to get its house in order”. Sibisi added that “there is a genuine willand feeling from the team [who were dealing with the matter on behalf of the SABC] that all of these issues aregoing to be resolved by the end of July.” He conceded that the impact of the SABC's failure to pay was “farreaching”and said he did not think that the SABC could “run away from the fact that as a consequence of nonpayment,collecting societies and the artists suffered as a result”. Later he said:... we are not proud of the history of non-payment. I don't think as we sit here we take away any joy in the SABC havingbeen tardy ... in the manner in which it has dealt with this matter ... [T]here have been challenges at the SABC, whichresulted in some of these things not being resolved timeously and in a manner that is satisfactory to all the parties.3.2.18. The SABC was also involved in a dispute over non-payment for the broadcasting of music videos. When therepresentatives of RiSA appeared before the CRC on 13 July 2011, they were informed that it was unnecessaryfor them to deal with this dispute as the SABC had informed the CRC that it would pay the outstanding amountsin respect of music videos to RiSA before the end of July 2011. The SABC told the CRC that it was going to pay- 22 -