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

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Once the handset technology changed, it became possible to offer full music downloads. Agreements were thenentered into with the record labels to sell master recordings of music.4.3.4. The digital exploitation of music has developed significantly and current offerings can be described as:4.3.4.1. Permanent downloads: transfers of music from a website to a mobile device, for example, for permanentretention. A full-track download entails the making of a permanent copy of the original sound recording.4.3.4.2. Limited downloads or on-demand services: the consumer’s use of the copy is restricted by associatedtechnology that makes the file unusable when a subscription ends and/or an offering is streamed to thelistener to enable him to listen once, twice or a number of times during the period he subscribes to thatservice. This would typically include the Spotify model [www.spotify.com] and is regarded as a streamingservice. A RingBackTone (RBT) service is regarded as the streaming of a sound recording because it isnever downloaded. The user subscribes to the RBT service and when he/she receives a call, the MNOstreams the track so that the caller hears it.4.3.4.3. Special webcasting: This is a service where the user can choose a stream of music, usually from onesource, i.e. from an artist, a group/ensemble or the record of a particular concert.4.3.4.4. Premium or interactive webcasting (so-called ‘intermediate services’): This form of webcasting includespersonalised services such as LAUNCHcast and Pandora in the UK.4.3.4.5. Pure webcasting: a stream of pre-programmed (non-interactive) back-to-back music.4.3.5. In general, South African WASPs offer subscription and limited download or on-demand services, but some dooffer permanent downloads of sound recordings. Most subscription services involve the payment of an accessfee, usually through daily or weekly billing. Once users have paid this fee, they are able to access a mobi sitewhere they can choose and download content. This is a permanent file and does not expire after the user’ssubscription comes to an end. Once users have been successfully billed, they have full access to the downloadportal and can claim their tracks as offered by the service. Some services may offer the right to download onesong per day, whereas others offer unlimited downloads. Although offerings may differ, the subscription modelremains the same.4.3.6. WASPS offer services on a subscription and à la carte basis. Apple (SA), iTunes (SA), eXactmobile, the NokiaMusic Store (launched on 23 September 2010), Africori, Next Music and many more are indicative of theinevitable online trend.4.3.7. Limited download or on-demand services are regarded as streaming services and are offered by MNOs inSouth Africa through RBTs. Streaming of music through a RBT service entails the distribution of a work in adiffusion service. A ‘public performance’ licence is necessary for the streaming of music through RBT servicesand for the transmission of sound recordings through Internet radio stations. According to a WASPArepresentative, only MNOs offer the distribution of sound recordings through RBT services; WASPs may notoffer these services. However, not all MNOs offer RBT services. According to a WASPA representative, 8ta hasnot launched such a service. Cell C noted in a written response to the CRC that it had not sold ringtones since- 32 -
2009 and that its platform providers (Exact Mobile and IOGlobal) have in the past made royalty payments to therelevant collecting societies.4.3.8. According to the information made available to the CRC, only one MNO entity has an agreement with SAMRO,namely Vodacom (July 2011).4.3.9. Special, premium and pure webcasting fall within the realm of broadcasters. South African radio stations put upstreams for public consumption on their websites.4.3.10. As noted above, WASPs have been selling ringtones since 2000. The CRC is aware of the fact that someWASPs have been paying mechanical royalties to NORM since 2000. Only Vodacom has signed SAMRO’smechanical licence agreement. An overwhelming majority of WASPS have paid no royalties as they are notlicensed and have profited 100% from the digital exploitation of authors’ copyright works for almost a decade.4.3.11. The licensed mobile entities have been paying 60% of the retail price to record companies and 7,5% royalties toSAMPRA for making sound recordings available to download.4.3.12. According to representations made to the CRC, only 14% of all WASPS have agreements with NORM to paymechanical rights royalties. The percentage of WASPS that have agreements with SAMRO is significantlysmaller.4.3.13. The compliant mobile entities report use of content to the collecting societies and pay upon invoice. Mobileentities that are not invoiced for their customers’ downloading of works do not pay any royalties to copyrightowners. The share of the record companies’ royalties that goes to the performers is governed by the recordingcontract.4.3.14. From 2007 onwards, SAMRO contacted WASPs and alleged that a performance royalty was payable on thedownloading of music works. This liability was denied by WASPs. WASPA formed a Royalty Working Group todiscuss the demands from SAMRO and obtained a legal opinion that supported its position. Although SAMROthreatened litigation, the matter was not pursued. The Royalty Working Group was dissolved in 2009. At thisstage, WASPA agreed that mechanical royalties must be paid for all downloads, and that performance royaltiesmust be paid for any kind of streaming of sound recordings or music. The representative from SAMRO noted:The point is that our dispute with them has not been on the tariff, our dispute with them has been on the principle oflicensing performing rights.4.3.15. In a recent case in the US (re Application of Cellco Partnership D/B/A Verizon Wireless (case 1:09-cv-0774-DCLfiled 10/14/2009)), the court declined to hold that a sound recording (set as a ringtone) is performed in publiceach time a user’s phone rings. The court held that Version (a mobile service provider) did not need a publicperformance licence for musical compositions because it provides ringtones to its customers. This, of course,did not exonerate the service provider from paying the mechanical royalties, the communication right to thecopyright owner and the ‘making available’ right for every sound recording it delivers to a customer.- 33 -
Page 2 and 3: TABLE OF CONTENTSLIST OF ABBREVIATI
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 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
Page 50 and 51: 6.1.3. The CRC’s assessment of th
Page 52 and 53: 6.3.3. SAMPRA should be given one y
Page 54 and 55: Corporate Governance GapsKing II Re
Page 56 and 57: King IIIPrincipleKing IIIRequiremen
Page 58 and 59: King IIIPrincipleKing IIIRequiremen
Page 60 and 61: 8 COLLECTION OF MUSIC ROYALTIES8.1
Page 62 and 63: 8.1.4.2. Needletime royalties are n
Page 64 and 65: 8.1.7.4. For the past five years, V
Page 66 and 67: PRS (UK)SPRE (FRANCE)SUISA(SWITZERL
Page 68 and 69: DetailsPerformance RightsSound Reco
Page 70 and 71: 8.2.7 Comparative Study Performed b
Page 72 and 73: y a collecting society. A rights ho
Page 74 and 75: agency, its rights being derived fr
Page 76 and 77: Mr Robinson said DALRO assumed the
Page 78 and 79: 10.1.6. The distribution to publish
Page 80 and 81: 10.4.4. Most of the other collectin
Page 82 and 83: 10.6.3.4. South African English-lis
Page 84 and 85: 10.10 CONTRACTUAL RELATIONSHIPS BET
Page 86 and 87: 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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