Section 9 sound recording communication to the public rights also known as “needle-time” rights are under-represented in South Africa, with only an estimated 15% of potential clients actually taking licenses. These rights are licensed to radio and TV broadcasters, retailers, banks, shopping malls, sport stadiums, restaurants and venues of various descriptions when they communicate a sound recording to the public.
Except for a period between 1916 and 1965, there was historically no legislation for needle-time rights in South Africa. In 1961 South Africa declined to ratify and become a signatory to the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations.
Recording Industry of South Africa (RISA) championed the campaign for needle-time from 1988 until 2002 when they created the South African Music Performance Association (SAMPRA). SAMPRA received a Section 3(1)a accreditation in 2008, which made South Africa the 52nd country to introduce these rights. SAMPRA appointed one member, RISA and administered the rights on their behalf, although RISA, as a trade association never had any needletime rights from its members to offer SAMPRA.
As 75% of SAMROs composer members are also performers on sound recordings, SAMRO decided to apply for a licence and were awarded a Section 3(1)b accreditation in 2008, for the representation of performers only. SAMROs legal status as a composer’s rights organisation administering rights on behalf of performers came under question. The Performers Organisation of South Africa (POSA Trust) was established in 2009 to administer this right.
“A 3(1)b does not have the right to licence. The right to licence resides with a 3(1)a or c, This was a new right and no one had the knowledge of how it should be administered,” explained Pfanani Lishivha, MD of POSA at the time and now CEO of SAMPRA. Lishiva started his career at ICASA before joining SAMRO as a Business Manager.
POSAs first act was to block SAMPRA through the Registrar. SAMPRA had more than 3000 record company members, including the big three record labels, Sony Music, Universal Music and Warner Music. In June 2009 SAMPRA was preparing to make their first pay-out. POSAs demands were a 50/50 split on all collections. This could not be met by SAMPRA as performers and record labels all have different contractual agreements. In 2013 POSA took SAMPRA to court.
Chairman of the POSA board at the time Sibongile Khumalo’s announced: “This is a battle for redress, for justice. This is our sweat and blood, our creativity. It is about income that should be coming our way. It is a Human Right.” South Africa was one of the early implementers of Needletime rights, but in 1964 these rights were withdrawn and were not re-established until 2002, after a battle that began in the early 90s. It took more than another decade before rates were agreed with broadcasters and to this day record labels and musicians have been paid a small percentage of what is owed to them historically.
This deferment of payment has had a devastating impact on the music industry. Not only are artists and their families not being paid what they are due, but record labels and in particular independent labels have been denied revenue that would have been reinvested.
SAMROs Integrated Report 2015 showed nearly 25 million rand spent on POSA in 2012 and 2013 alone, and loans of nearly 10 million rand in 2010 and 2011. Added to that, the court case cost well in excess of ten million rand in legal fees. This was member’s money. At a General Meeting, members were unhappy about their money being spent on performers who were members of POSA Trust. They instructed SAMRO’s management to get out of the business of running a performers’ collecting society.
SAMPRA, RISA, POSA and SAMRO eventually settled and signed a “Co-operation Agreement” drawn up by Keith Lister who at the time ran the Management Committee at SAMPRA. Legal costs were shared across the five different applications made during the process of litigation (two by SAMPRA and three by SAMRO).
The conditions of the merger provided for two chambers; a performers’ chamber and the record companies’ chamber, equal representation of performers and record companies on the Board, and equal splitting of royalties between the record company that produced the track and the performers featured in the track.
Although the CIPC provisionally withdrew SAMPRA’s accreditation in 2012, in 2014 SAMPRA was accredited as a section 3(1)(c) “joint” CMO to licence and administer on behalf of record companies and performers. Sources have put the SAMPRA collection figure at R600 million plus under the Collection Society Regulations 2006 since 2012. According to Lishivha, SAMPRA have paid out 196 million to date. 27 million rand in accumulated interest on the 2009 – 2013 royalties were also distributed.
“Another point of great importance is that concluding a license agreement can often be time consuming as parties have to agree on payable tariff and very often a court is approached to fix a tariff. The court has just recently fixed a tariff for use of sound recording in the broadcasting area and this took between 2009 and 2015 period roughly.” Kadi Petje, Senior Manager: Copyright, CIPC.
Distributions from these periods are awaiting approval from the CIPC and will exclude SABC payments. SAMPRA are still in dispute with SABC as Hlaudi Motsoeneng recommended a 70/30 split between SAMPRA and Independent Music Performance Rights Association (IMPRA). IMPRA was established by Association of Independent Record Companies (AIRCO) in 2014 and like SAMPRA, is accredited as a section 3(1)b. However SAMPRA represents 4 007 record company members and according to Lishiva, SAMPRA has a 90 – 95% market share and therefore the proposal was rejected.
Lishiva explained, “We are not unique, Italy has four societies just for needle-time. France has got two. As long as you get a playlist from licencees you can identify your repertoire.”
In January 2018 CIPC concluded a forensic audit of SAMPRA however “the results are still to be communicated,” insisted Petje.