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

10.1.6. The distribution to publishers in Table 17 (l) includes both local and foreign components of royalties.Multinational publishers such as EMI and Sony collect on behalf of their principals and, as a result, the foreigndistributions reflected in Table 17 (m) are understated. SAMRO could not provide the split between foreign andlocal publishers. The share of the local composers and authors of 24,1% for 2009 reflected in Table 17 (j) iscorrect.10.2 COST-TO-ROYALTY INCOME RATIOTable 18: Comparison Analysis of Cost-to-Royalty Income Ratio Among Collecting SocietiesDetails for 2010Cost as % ofRoyalty IncomePRS (UK)SUISA(Swiss)TONO(Norway)EAD(Braz.)IPRS(India)SAMRO PPL (UK) SAMPRA10,63% 20% 14,39% 24,5% 15,04% 30% 13,88% 17,82%10.2.1. Of the entities selected for benchmarking, SAMRO has the highest cost-to-royalty income ratio of 30%.Reasons include: Tariffs used by SAMRO are generally lower than the other collecting societies; SAMRO has the highest portion of non-royalty income; The significant costs of managing non-royalty income; and The ratio of collections to labour cost is the lowest among the selected societies, which means they get thelowest returns on collections for every rand spent on labour cost.It is clear that to comply with Regulations, which require a maximum of 20%, SAMRO will have to improve itslevels of collection and reduce cost.10.2.2. At 17,82%, SAMPRA’s cost ratio is higher than most of the collecting societies. This is largely due to fact thatbroadcasters and major retailers have not started paying SAMPRA for sound recordings because of the pendingcourt dispute (the amount involved is between R80 million and R100 million per annum), SAMPRA is still ingrowth phase and a significant portion of the market is not yet captured. The CRC believes that a furtherR30 million worth of collections could be generated from the general users.10.2.3. NORM is compensated on commission basis and the rate currently stands at 12% per annum.10.3 SOCIAL AND CULTURAL CONTRIBUTIONSTable 19: Social and Cultural ContributionsDETAILS FOR 2010Social and Cultural as% of collectionsPRS (UK)SUISA(SWISS)TONO(NORWAY)IPRS(INDIA)SAMRO PPL (UK) SAMPRA0,34% 7,6% 7,3% Nil 5,4% 2,1% Nil10.3.1. SAMRO is the only collecting society in the country that contributes to social and cultural contributions.SAMPRA, as a collecting society for record producers, does not have a mandate to make such contributions.- 72 -