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

10.4 NON-ROYALTY INCOMETable 20: Non-Royalty Income for 2010Collecting SocietyPRS (UK)SUISA (SWISS)TONO (NORWAY)IPRS (INDIA)SAMROPPL (UK)SAMRPANORMNon-Royalty Income as % ofcollections0,6% Short-term money marketNature of Non-Royalty Income7% Investment and other income from service rendered3% Short-term money market7% Short-term money market14% Long-term investments0,4% Short-term money market9% Short-term money market7% Short-term money market10.4.1. SAMRO generates a significant portion of its income from investments. For the year ended 30 June 2010,R39 million was generated from investments and R6,4 million from other activities (income from subsidiaries).This income supplements royalty income. The total investment for SAMRO as at 30 June 2010 amounted toabout R218 million (excluding investment in direct properties and cash on call).10.4.2. According to SAMRO, the strategic reason for retaining these investments was to supplement the members’income under difficult economic conditions. SAMRO acquired a property in Braamfontein (with a carrying valueof R94 million) to house its operations and save on future rental costs.10.4.3. The CRC believes SAMRO’s decision to set aside money for investments and the acquisition of property wassound. There are, however, two possible problems with this arrangement:10.4.3.1. New members join SAMRO on an on-going basis and so a high level of cross-subsidisation exists betweennew and old members.10.4.3.2. For the year ended 30 June 2010, more than 80% of SAMRO’s members received less than R5 000 astotal royalty income for the year. Would they prefer SAMRO to invest on their behalf or should the moneybe paid to them directly?The CRC believes it would be appropriate for members to decide for themselves.- 73 -