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

4.3.16. In 2009, in what was coined a ‘ringtone royalties wrangle’, NORM instructed corporate and commercial law firm,Werksmans, to issue a letter to WASPA. John Fishlock, board member of NORM, explained:We’re not here to take people to court, but it’s been a three-year-long battle to get digital service providers on boardlegitimately. With the action we’re taking now, we’re confident that our composers will be properly recompensed for theirworks.We have requested WASPA to forward correspondence to all its members, to whom we have sent downloadagreements ... If they have not signed before the end of August 2009, they will not enjoy the standard discounted rateas all other service providers who have concluded agreements with NORM already. If they fail to sign by the deadline,that preferential rate will fall away and they will have to account at the base rate.4.3.17. Janine Hollesen, an attorney representing NORM, said download agreements are being signed by mobileoperators and major digital service providers. She noted:Although a number of WASPA members have been in contact with NORM and have signed the agreement, pursuant tothe correspondence sent to them, there are many WASPA members who are unenthusiastic about giving composerstheir due. Their continued use of composers’ works without paying royalties is unauthorised in terms of the CopyrightAct and constitutes an infringement of the composer’s rights as administered by NORM.The Copyright Act makes it a criminal offence to knowingly use copyrighted works without authorisation. WASPAmembers will not be able to plead ignorance if one considers WASPA’s code of conduct and that many of its members,including one of its biggest, Exactmobile, have signed the NORM agreement.4.3.18. The WASPA representative noted that WASPA had made huge efforts to educate WASPs and encouragedlicensing at every opportunity. All WASPA members were advised to contact NORM and SAMRO and to signthe licensing agreements. The WASPA representatives argued that it was not their role to ensure that membersactually entered into licensing agreements with the collecting societies as it is a self-regulating body.4.3.19. WASPA representatives have argued that the main issue in the collection of the royalties is that collectingsocieties lack processes to identify whom they represent, making it difficult to send invoices timeously.Allegations were made that NORM tended to focus on a few individual players rather than the whole market.4.3.20. It was also argued that the collecting societies have not been proactive in exploiting and enforcing theirmembers’ rights in the digital market. It was noted by the representatives of WASPA – and reiterated by arepresentative from the Internet Service Providers Association (ISPA) – that collecting societies are notempowered to deal authoritatively with the challenges of online music exploitation. This is refuted by the factthat SAMRO has prepared licensing agreements for all online music services described in 4.3.4 above as wellas ‘Burn-on-Demand’ services, ‘Digital Juke Boxes’ and web-page advertising.4.3.21. A RiSA report (Digital Music Statistics) on digital music statistics estimates that approximately 3,6 million songsare illegally downloaded in South Africa on a monthly basis, translating into monetary losses of R36 millionmonthly and R432 million annually. A PricewaterhouseCoopers report (Entertainment and Media OutlookReport (2010)) estimates that if the current trend continues, by 2014 the potential revenue loss due to copyrightinfringement will be in excess of R500 million per year.- 34 -