Music market: collecting societies are failing to unite creative sectors
SA’s music industry is still a long way from transparency and transformation, writes Struan Douglas
Despite Trade and Industry Minister Rob Davies’s satisfaction with the Copyright Review Commission’s report, the country’s music industry is still a long way from transparency and transformation.
The commission was established by the Department of Trade and Industry to, among other things, assess concerns and allegations about collecting society models.
"The findings or recommendations of the commission in the main are mainly negative and go against the current regime of management of collecting societies," Davies said in a recent statement.
The collection society market in SA is worth about R750m a year. It is governed by the Southern African Music Rights Organisation (Samro), which collects nearly two-thirds of the music market through its ownership of the performing rights of all its composer members. The other third is shared between the Composers Authors & Publishers Association (Capasso) collecting the mechanical (reproduction) rights, and the South African Music Performance Rights Association (Sampra) collecting sound-recording owner (record label) communication to the public rights.
"Collecting societies should be seen as another way of unifying the fragmented creative sectors," says Cynthia Theko, who serves on Parliament’s portfolio committee on trade and industry. "When they are unified, they are likely to share the same strategic and developmental goals. If they remain fragmented, there is a likelihood of advocating different positions and this would not change the status quo," she says.
The 224-page Copyright Review Commission report made four conclusions and two key recommendations, but none of the four conclusions mentioned collecting societies.
A focal recommendation was shifting the industry towards one collecting society for performance rights, one collecting society for sound-recording rights and one collecting society for mechanical rights.
According to multijurisdictional copyright lawyer Graeme Gilfillan, "Samro owns, and with all manner of encouragement from the Department of Trade and Industry, has taken ownership of three different sets of rights. Samro must seek a mandate from members prior to utilising cash resources; Samro’s requirement that full members need to be approved by the board is inappropriate, and its distribution of unallocated royalties is unacceptable."
Over the years Samro has spent tens of millions of rand in members’ fees driving the change of the collective management organisation regime to include Sampra and Capasso under their umbrella.
As an implementing arm of the department, the Companies and Intellectual Property Commission (CIPC) was tasked with playing the central role in the regulation and accreditation of the collections industry.
Since the promulgation of the Collecting Society regulations in 2006, the registrar of copyright accredited Sampra, Sarral and Samro to collect royalties for sound recordings. But only Sampra and the Independent Music Performance Rights Association are regulated as sound-recording owners for needle-time rights.
"Application of the law is our only mandate in so far as intellectual property [IP] law and policy is concerned. All our regulatory interventions are entrenched in the applicable IP statutes and the Constitution," says Kadi Petje, senior manager for copyright at the CIPC.
The report did not favour collective management organisations but in fact made all the necessary recommendations that the organisations need to change in order to better service their members
Members of the Copyright Review Commission included Judge Ian Farlam; Oupa Lebogo, secretary of the Creative Workers Union of SA; chartered accountant Nala Mhlongo; Prof Tana Pistorius, intellectual property lecturer at the University of SA; policy analyst Dr Jean Swanson-Jacobs and Prof Musa Xulu.
"The commission cannot and has not been implemented because it was corrupted at the outset," says Gilfillan. "The recommendations, in the main, supported the reinforcement of existing unregulated apartheid-era monopolies and scape-goated black power as economically irrelevant.
"Submissions and interviews, which would have had a material difference in the key recommendations, were excised from the report."
A Copyright Bill subcommittee appointed a seven-member technical panel with five members from collective management organisations — Adv Joel Baloyi (nominated by Samro), Adv Ntsietso Mokitimi-Makhofola (nominated by Sampra), Thabang Mathibe (a trustee at the Association of Independent Record Companies), Andre Myburgh (Samro legal adviser ) and Wiseman Ngubo (Capasso).
"The report did not favour collective management organisations but in fact made all the necessary recommendations that the organisations need to change in order to better service their members," says Ngubo.
The report stated that the organisations needed to increase licensing activities and set a R1bn annual licence fee target. Increasing licence rates and extending legislation to include the regulation of all collective management organisations were recommended for the growth of the local music industry. But the recommendations failed to tackle international copyright considerations regarding the internet, online contracts, the ubiquitous use of smartphones and the key issue of access to the authorship and ownership data of South African songs, recordings, films, books and artistic works.
"The key conclusions did not accord with any understanding of copyright law’s global landscape. The report does not include data, databases, hosting, linking, safe harbour and other essential parts of the copyright landscape today. All copyright works are used, traded, distributed and paid for with and by data. To exclude data in 2018 would render the new bill unfit for purpose," says Gilfillan.
Ireland, Australia, Canada, Nigeria, Kenya, Hong Kong, India, the EU and the US are amending their copyright law.
"It is departments of justice and other organs of state working in intellectual property and trade and industry, empowered by legislation, which are creating national settlements that are distributed to stakeholders and setting the rules of the game," he says.