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

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8 COLLECTION OF MUSIC ROYALTIES8.1 OVERVIEW OF COLLECTION ACTIVITIES8.1.1 Background8.1.1.1. The total music royalties collected for performance, sound recordings and mechanical rights over the lastthree years are reflected in Table 4.Table 4: Total Music Royalties Collected via Collecting SocietiesRefsSources of Music Royalty RevenueParagraph.Refs2010 Rm’s 2009 Rm’s 2008 Rm’sa. Radio stations 8.1.2 78,8 72,2 68,5b. Television stations 8.1.3 90,9 86,1 89,6c. Community TV and radio stations 8.1.4 3,0 2,8 2,6d. Foreign sources of income 8.1.5 8,1 7,9 7,3e. General (licensing) music users 8.1.6 121,9 96,3 79,4f. Mechanical rights 8.1.7 19,8 27,5 20,8g. Others 35,4 29,6 25,4h. TOTAL 357,9 322,4 293,6Growth 11% 10%8.1.1.2. The total collections for 2010 amounted to about R357,9 million compared to R322,5 million for 2009 andR293,7 million for 2008 (as per Table 4 (h)). Collections include performance, sound recording, andmechanical rights collected by the relevant collecting societies.8.1.1.3. The total collections of R357,9 million equates to 0,0128% of the total GDP, compared with 0,0417% forthe UK and 0,0468% for France. The growth of 11% and 10% over the last two years was largely due toincreases in sound recording royalties arising as result of growth in SAMPRA’s collections. SAMPRAcommenced with the collections of sound recording royalties in 2008.8.1.2 Radio stations8.1.2.1. Currently, both public and private radio stations pay for performance rights at an average rate of 3,25% (ongross advertising revenue) per annum. Due to the pending tariffs case against SAMPRA, no payment hasbeen made for sound recordings.- 54 -
8.1.2.2. Based on the CRC’s comparative exercise in respect of tariffs in both developed and developing countries,an average of 3,25% (currently paid by local radio stations) is extremely low as a total rate of music costfor an average music radio station. The CRC believes that a minimum rate of between 6,5% and 8%(performance rights plus sound recording rights) is appropriate for most radio stations in South Africa. Thisis based on the average of 8,06% for the countries selected for benchmarking determined in paragraph8.2.4.4. Based on this suggested minimum rate, there is a shortfall of approximately 3,25% (6,5% minus3,25%). Based on the shortfall of 3,25%, currently, the total annual leakage for radio stations is at leastR80 million per annum, which is largely due to non-payment for sound recordings by broadcasters and thefact that tariffs for performance rights are not competitive in relation to benchmarked countries.8.1.2.3. DMX Music is a background and foreground music service provider, providing pre-programmed music andgenre-specific audio channels to subscribers.8.1.2.4. In December 1995, DMX Music concluded an Audio Service Distribution Agreement with pay televisionoperator Multichoice. Under the agreement, DMX Music supplies the service to Multichoice for use inresidential homes in the form of 40 programmed genre-specific audio channels, which are updated atperiods determined by Multichoice and DMX Music.8.1.2.5. For 16 years (as from 1995), no payment has been made by DMX for performance rights and, for the pasteight years, no payment has been made for sound recordings. Accordingly, DMX contravened theCopyright Act of 1978 by playing music publicly for 16 years without the appropriate licences.8.1.2.6. The CRC believes that it is inappropriate for Multichoice to provide a music broadcasting platform tobroadcasters who are not licensed to play music.8.1.3 Television Stations8.1.3.1. Public television relates to all stations that are owned by the SABC (including SABC1, SABC2 andSABC3).8.1.3.2. The total amount paid for performance rights with regard to public television for 2010 amounted toR51,5 million.8.1.3.3. Based on the benchmarking exercise performed against both developing and developed countries, thereare no material leakages in this area arising from these tariffs.8.1.3.4. The total amount paid by private TV stations in respect of performance rights for 2010 amounted toR39,4 million, and there are no material collecting leakages arising from the tariffs based on thebenchmarking exercise performed.8.1.4 Community Broadcasters8.1.4.1. There are about 150 community radio stations licensed by ICASA. Most have licences with SAMRO, butdo not honour their commitments of paying annual royalty fees. The majority are in arrears with payments.- 55 -
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TABLE OF CONTENTSLIST OF ABBREVIATI
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11.8 RECOMMENDATIONS ..............
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LIST OF TABLESTable 1: Cases of Non
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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
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 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
Page 88 and 89: licence that the licensee comply wi
Page 90 and 91: 11.4.6. The details of ICASA’s ta
Page 92 and 93: RecommendationsTimelines for Recomm
Page 94 and 95: enterprises. There was a suggestion
Page 96 and 97: Copyright as it relates to copyrigh
Page 98 and 99: 13.4 DEPARTMENT OF ARTS AND CULTURE
Page 100 and 101: Table 28: Comparative Study’s Key
Page 102 and 103: KEY ITEMS BRAZIL FRANCE INDIA NORWA
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Page 106 and 107: about 30%, which is the highest amo
Page 108 and 109: 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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