Performers bear brunt of needle-time rights muddle
Except for a period between 1916 and 1965, there was no legislation for needle-time rights in SA
Public sound recording rights, also known as "needle-time" rights, are under-represented in SA, with only an estimated 15% of potential clients taking licences.
The rights are licensed to radio and television broadcasters, retailers, banks, shopping malls, sport stadiums, restaurants and other venues that communicate a sound recording to the public. Except for a period between 1916 and 1965, there was no legislation for needle-time rights in SA.
In 1961 the country declined to ratify and become a signatory to the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations.
The Recording Industry of SA (Risa) championed a campaign for needle time from 1988 to 2002 when the South African Music Performance Association (Sampra) was created. The association received a section 3(1)a accreditation in 2008, which made SA the 52nd country to introduce these rights. It appointed one member, Risa, and administered the rights on its behalf, but Risa, a trade association, never had needle-time rights from its members.
As 75% of the Southern African Music Rights Organisation (Samro) composer members are also performers on sound recordings, the body decided to apply for a licence and was awarded accreditation in 2008, for the representation of performers only. The Performers Organisation of SA (Posa) 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," says Sampra CEO Pfanani Lishivha.
Sampra had more than 3,000 record company members, including record labels Sony Music, Universal Music and Warner Music and in June 2009 was preparing to make their first payments.
Posa demanded a 50-50 split on all collections. This could not be met by Sampra as performers and record labels have different contractual agreements. In 2013 Posa took Sampra to court.
Then Posa board chairwoman Sibongile Khumalo, said: "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."
"The readiness of Samro and Posa to dumb down arguably the most transformed sector of the cultural industries, the local sound recording industry [was apparent]," says copyright lawyer Graeme Gilfillan.
"Black equity dominates the sector, with no special purpose vehicles, government hand-outs, loans or debt vehicles required: organic black equity growth in evidence. They have paid and accounted to their artists and producers for a decade and longer without Samro’s involvement."
Samro’s integrated report for 2015 showed nearly R25m spent on Posa in 2012 and 2013, and loans of nearly R10m in 2010 and 2011. The court case cost more than R10m in legal fees. At an annual general meeting, members expressed unhappiness 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. The legal costs were shared across the five applications made during litigation (two by Sampra and three by Samro).
The conditions of the merger provided for two chambers, for performers and the record companies, with the equal representation of performers and record companies on the board; and the equal splitting of royalties between the record company that produced a track and the performers featured on the track.
"Samro relinquished its control of Posa when Posa merged with Sampra in November 2016. The terms and conditions of the agreement have been met. Samro does not receive payments relating to needle-time rights, neither from Posa nor Sampra," says Samro CEO Nothando Migogo.
Although the Companies and Intellectual Property Commission (CIPC) provisionally withdrew Sampra’s accreditation in 2012, it accredited it as a section 3(1)(c) "joint" collective management organisation to licence and administer royalties on behalf of record companies and performers. Sources have put the Sampra collection figure at more than R600m since 2012.
Lishivha says that they have paid out R196m to date and R27m in accumulated interest on 2009–2013 royalties were also distributed.
"Concluding a licence agreement can often be time consuming as parties have to agree on a payable tariff and very often a court is approached to fix a tariff.
"A court has just recently fixed a tariff for use of sound recording in the broadcasting area and this took place roughly between 2009 and 2015," says CIPC senior manager for copyright Kadi Petje.
Distributions during this period are awaiting approval from the CIPC and will exclude SABC payments.
Sampra is in dispute with the SABC after its former chief operating officer Hlaudi Motsoeneng recommended a 70-30 split between Sampra and the Independent Music Performance Rights Association, which was established by the Association of Independent Record Companies in 2014 and is accredited as a section 3(1)b body.
However, Sampra represents 4,007 record company members and according to Lishivha, has a 90% to 95% market share, and therefore the proposal was rejected. "We are not unique, Italy has four societies just for needle time. France has two. As long as you get a playlist from licencees you can identify your repertoire," Lishivha says.
In January, CIPC concluded a forensic audit of Sampra but "the results are still to be communicated", says Petje.