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

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TABLE OF CONTENTSLIST OF ABBREVIATIONS ................................................................................................................................................. 1EXECUTIVE SUMMARY ..................................................................................................................................................... 31 INTRODUCTION ........................................................................................................................................................... 71.1 ESTABLISHMENT OF THE COMMISSION ............................................................................................................. 71.2 MEMBERS OF THE COMMISSION ......................................................................................................................... 71.3 THE COMMISSION’S TERMS OF REFERENCE .................................................................................................... 71.4 PROCESS FOLLOWED BY THE COMMISSION ..................................................................................................... 92 THE FACTUAL BACKGROUND ................................................................................................................................. 102.1 PRE-1994 NEEDLETIME ASSESSMENT .............................................................................................................. 102.2 THE ESTABLISHMENT OF THE MUSIC INDUSTRY TASK TEAM (MITT)........................................................... 112.3 SUBMISSION BY THE DEPARTMENT OF ARTS AND CULTURE ....................................................................... 123 HISTORY OF COPYRIGHT AND NEEDLETIME LEGISLATION ................................................................................ 123.1 HISTORY OF COPYRIGHT LEGISLATION ........................................................................................................... 123.2 EVENTS FOLLOWING THE ENACTMENT OF NEEDLETIME LEGISLATION ..................................................... 193.3 LESSONS TO BE LEARNED FROM EVENTS SINCE THE ENACTMENT OF NEEDLETIME LEGISLATION ..... 244 COPYRIGHT AND THE LAW ...................................................................................................................................... 284.1 THE RISE OF THE DIGITAL MUSIC DELIVERY ................................................................................................... 284.2 DIGITAL COPYRIGHT LAW................................................................................................................................... 294.3 THE ROLE OF MOBILE CONTENT PROVIDERS ................................................................................................. 314.4 LIABILITY OF SERVICE PROVIDERS .................................................................................................................. 354.5 DEVELOPMENT OF THE ‘3 STRIKES’ INTERNATIONALLY................................................................................ 364.6 THE ROLE OF THE INTERNET SERVICE PROVIDERS ASSOCIATION (ISPA) ................................................. 374.7 CONCLUSION ........................................................................................................................................................ 374.8 RECOMMENDATIONS .......................................................................................................................................... 385 STRUCTURE OF COLLECTING SOCIETIES IN SOUTH AFRICA ............................................................................ 385.1 BACKGROUND ...................................................................................................................................................... 385.2 FUNCTIONING OF COLLECTING SOCIETIES ..................................................................................................... 405.3 ‘GOOD PRINCIPLES’ OF COLLECTING SOCIETIES ........................................................................................... 416 LEVEL OF COLLECTING SOCIETIES’ COMPLIANCE WITH REGULATIONS ......................................................... 436.1 ACCREDITED COLLECTING SOCIETIES ............................................................................................................ 436.2 COMPLIANCE BY COLLECTING SOCIETIES WITH REGULATIONS ................................................................. 456.3 RECOMMENDATIONS AND CONCLUSION ......................................................................................................... 457 LEVEL OF CORPORATE GOVERNANCE COMPLIANCE BY COLLECTING SOCIETIES ....................................... 467.1 BACKGROUND: COLLAPSE OF SARRAL ............................................................................................................ 467.2 COLLECTING SOCIETIES (SAMRO, SAMPRA AND NORM) VERSUS KING III ................................................. 487.3 CONCLUSION ........................................................................................................................................................ 527.4 RECOMMENDATIONS .......................................................................................................................................... 538 COLLECTION OF MUSIC ROYALTIES ...................................................................................................................... 548.1 OVERVIEW OF COLLECTION ACTIVITIES .......................................................................................................... 548.1.1 Background ........................................................................................................................................ 548.1.2 Radio stations ..................................................................................................................................... 548.1.3 Television Stations ............................................................................................................................. 558.1.4 Community Broadcasters ................................................................................................................... 55- ii -
8.1.5 Foreign Sources of Income ................................................................................................................. 568.1.6 General (Licensing) Music Users ........................................................................................................ 568.1.7 Mechanical Rights .............................................................................................................................. 578.1.8 Conclusion and Recommendations .................................................................................................... 588.2 TARIFFS ASSOCIATED WITH LICENSING AGREEMENTS ................................................................................ 588.2.1 Background ........................................................................................................................................ 588.2.2 Commercial Radio Stations – Performance Rights ............................................................................. 598.2.3 Commercial Radio Stations – Sound Recordings ............................................................................... 618.2.4 Consolidated Costs for Commercial Radio Stations – Performance Rights Plus Sound Recordings . 618.2.5 Comparative Study Performed by NAB on Radio Stations ................................................................. 628.2.6 Commercial TV Stations ..................................................................................................................... 638.2.7 Comparative Study Performed by NAB on TV Channels .................................................................... 648.2.8 Community Radio Stations ................................................................................................................. 648.2.9 Ringtones ........................................................................................................................................... 648.2.10 Music on Hold (for 100 lines) .............................................................................................................. 658.2.11 Background music – Departmental Stores and Warehouses (for 2 000 square metres) .................... 658.2.12 Conclusion and Recommendations .................................................................................................... 658.3 AGREEMENTS BETWEEN BROADCASTERS AND COLLECTING SOCIETIES ................................................. 658.4 CONTRACTS BETWEEN COLLECTING SOCIETIES AND GENERAL MUSIC USERS ...................................... 668.5 CONCLUSION AND RECOMMENDATIONS ......................................................................................................... 679 LICENSING AGREEMENTS BETWEEN TERTIARY INSTITUTIONS AND COLLECTING SOCIETIES .................... 679.1 BACKGROUND ...................................................................................................................................................... 679.2 FUCNTIONING OF DALRO AS A COPYRIGHT LICENSING AGENT .................................................................. 689.3 RECOMMENDATIONS .......................................................................................................................................... 7010 DISTRIBUTIONS OF MUSIC ROYALTIES ................................................................................................................. 7010.1 OVERVIEW OF ROYALTY DISTRIBUTIONS ...................................................................................................... 7010.2 COST-TO-ROYALTY INCOME RATIO ................................................................................................................ 7210.3 SOCIAL AND CULTURAL CONTRIBUTIONS ..................................................................................................... 7210.4 NON-ROYALTY INCOME .................................................................................................................................... 7310.5 RECIPROCAL AGREEMENTS ............................................................................................................................ 7410.6 FOREIGN DISTRIBUTIONS ................................................................................................................................. 7510.7 ROYALTY DISTRIBUTION CYCLES ................................................................................................................... 7610.8 UNDOCUMENTED WORKS / ROYALTIES FOR NON-MEMBERS .................................................................... 7610.9 MUSIC USAGE INFORMATION (MUSIC LOG SHEETS) .................................................................................... 7710.10 CONTRACTUAL RELATIONSHIPS BETWEEN RECORDING ENTITIES AND ARTISTS ................................ 7810.11 CONCLUSIONS ................................................................................................................................................. 7910.12 RECOMMENDATIONS ...................................................................................................................................... 7911 STATUS OF LOCAL MUSIC CONTENT ..................................................................................................................... 8111.1 BACKGROUND .................................................................................................................................................... 8111.2 ICASA’S ROLE WITH REGARD TO LOCAL MUSIC CONENT ........................................................................... 8111.3 SOME OF THE MITT RECOMMENDATIONS ..................................................................................................... 8211.4 ICASA’S LOCAL MUSIC CONTENT TARGETS VS PROGRESS TO DATE ....................................................... 8211.5 IMPLICATIONS OF LOW LOCAL MUSIC CONTENT .......................................................................................... 8411.6 DEFINITION OF SOUTH AFRICAN MUSIC......................................................................................................... 8411.7 CONCLUSIONS ................................................................................................................................................... 85- iii -
Page 4 and 5: 11.8 RECOMMENDATIONS ..............
Page 6 and 7: LIST OF TABLESTable 1: Cases of Non
Page 8 and 9: NORMOSPsPOSAPPLPPL (India)ProLitter
Page 10 and 11: These problems are addressed in the
Page 12 and 13: xxi.The report considers developmen
Page 14 and 15: 1.3.8. Determine whether all money
Page 16 and 17: 1.4.9. The CRC derived considerable
Page 18 and 19: 2.3 SUBMISSION BY THE DEPARTMENT OF
Page 20 and 21: Aspects of Intellectual Property Ri
Page 22 and 23: (1) Subject to the provisions of th
Page 24 and 25: Copyright Tribunal or an arbitrator
Page 26 and 27: society, the South African Recordin
Page 28 and 29: 3.2.14. With the liquidation of SAR
Page 30 and 31: the final rate or rates to be appli
Page 32 and 33: (a)that payment is to be made to th
Page 34 and 35: information as to their use to enab
Page 36 and 37: The WCT and WPPT oblige members to
Page 38 and 39: Once the handset technology changed
Page 40 and 41: 4.3.16. In 2009, in what was coined
Page 42 and 43: 4.4.6. In exchange for the above li
Page 44 and 45: operators are licensed by NORM to p
Page 46 and 47: 5.2 FUNCTIONING OF COLLECTING SOCIE
Page 48 and 49: the grant of licences. Article 17 o
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6.3.3. SAMPRA should be given one y
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Corporate Governance GapsKing II Re
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King IIIPrincipleKing IIIRequiremen
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King IIIPrincipleKing IIIRequiremen
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8 COLLECTION OF MUSIC ROYALTIES8.1
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8.1.4.2. Needletime royalties are n
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8.1.7.4. For the past five years, V
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PRS (UK)SPRE (FRANCE)SUISA(SWITZERL
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DetailsPerformance RightsSound Reco
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8.2.7 Comparative Study Performed b
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y a collecting society. A rights ho
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agency, its rights being derived fr
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Mr Robinson said DALRO assumed the
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10.1.6. The distribution to publish
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10.4.4. Most of the other collectin
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10.6.3.4. South African English-lis
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10.10 CONTRACTUAL RELATIONSHIPS BET
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10.12.2. The Regulations should rec
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licence that the licensee comply wi
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11.4.6. The details of ICASA’s ta
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RecommendationsTimelines for Recomm
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enterprises. There was a suggestion
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Copyright as it relates to copyrigh
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13.4 DEPARTMENT OF ARTS AND CULTURE
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Table 28: Comparative Study’s Key
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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KEY ITEMS BRAZIL FRANCE INDIA NORWA
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about 30%, which is the highest amo
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15.1.3. The Copyright Tribunal’s
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15.1.20. Local music content requir
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for the selected artists. The outco
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King III Report by Institute of Dir
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Paranagua Pedro, “Strategies to I
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Copyright Amendment Act of 1984Copy
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APPENDIX 1(B): SUMMARY OF ORAL REPR
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Due to the fact that the existing c
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Mr BrottelProtection of copyright m
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1.1.3. LIST OF ENTITIES VISITED AND
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In the 2009 Annual Report of ABRAMU
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The implementation of this law led
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ecordings. In respect of audio-visu
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In 1995, ECAD distributed 72% of it
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niches in the market to ensure fair
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Proprietary rights allow authors to
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International royalty distribution
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3.2. Relevant LegislationsThe prese
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IPRS uses the standard tariffs in r
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Ad-hoc workshops on copyright are c
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meaningful living out of their crea
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4.1.3. LICENSING AND LEGAL REGIMESI
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Ballet teachers; Teachers in the fi
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It was founded in 1928 by the Norwe
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6.2. STRUCTURE OF COLLECTING SOCIET
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6.5. COLLECTION OF MUSIC ROYALTIEST
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1957, when the Managing Director of
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16.4.14 SWISSPERFORM: CHF4 millionI
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Cross-border licensing of digital r
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algorithm could be used to determin
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Collecting societies in the UK all
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APPENDIX 3: RECOMMENDATIONS BY MITT
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1.PREAMBLEThe Music Industry Task T
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The environment in which the music
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3.1.3 IMPLEMENTATION AND ACCESSION
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In this regard, the Minister should
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3.5.6 OMBUDSMANThe music industry s
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RECOMMENDATION 23:The MITT recommen
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The MITT further recommends that DA
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APPENDIX 4A: EXTRACTS FROM COPYRIGH
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(f)(g)doing, in relation to an adap
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(i)requiring notice of any intended
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(b)any organization claiming to be
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PERFORMERS’ PROTECTION ACTNO. 11
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the parties may agree to refer the
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ANNEXURE 5: COPY OF SARRAL’S CONT
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ANNEXURE 6: SARRAL’S AUDIT REPORT
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TERMS OF REFERENCESNO’SREQUIREMEN
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