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Notification: Non-payment of Needletime Rights

royalties is a violation of human rights


One of the things the new democratic government had to deal with was finding lasting solutions to the problems that plaque the South African music industry. To this end the then Minister of Arts, Culture, Science and Technology, Dr Ben Ngubane, appointed a Music Industry Task Team (the MITT) to investigate various problems and challenges pertaining to the development of the music industry. The MITT comprised of members from government, music industry and civil society, as well as international experts. The MITT was tasked, amongst others, with examining the inadequacy of the legislative framework governing the industry and to make recommendations.

The MITT, following public hearings in various provinces, compiled a report with 37 recommendations. One of the recommendations made was the amendment of the copyright legislation to allow for the introduction of Needletime Rights in South Africa. This led to the amendment of the Copyright Act and the Performers Protection Act in 2002 to secure the right for musicians/recording artists and record companies to be paid when their recorded music is broadcast/used or performed in public. So, for the first time in the administration of music rights in South Africa, musicians and record companies were going to benefit when their recorded music (in the case of musicians) and their sound recordings (in the case of record companies) were broadcast/used or performed in public. The legislation was amended on the understanding that the Needletime Rights royalty would be split equally between the record company that produced the sound recording and the musicians who are featured in the track(s).

The Regulations on the Establishment of Collecting Societies in the Music Industry (the Regulations) came into effect on 1 June 2006. The Regulations state that any licensing body intending to act as a collecting society for Needletime Rights needs to be accredited by the Companies and Intellectual Property Registration Office (CIPRO). An organisation known as the South African Music Performance Rights Association (SAMPRA) was accredited as a Needletime Rights society to administer Needletime Rights on behalf of record companies, whilst the Southern African Music Rights Organisation (SAMRO) was also accredited as a Needletime Rights society to administer Needletime Rights on behalf of recording artists/musicians. This means that, in respect of the sound recordings that it controls, SAMPRA will administer the 50% portion of the Needletime royalties, while SAMRO will administer the 50% recording artists’ share for its members (recording artists/musicians) who performed in such sound recordings.

SAMRO established a Trust known as the Performers Organisation of South Africa Trust (POSA) to ensure the efficient administration of Needletime Rights and to distinguish this administration from SAMRO’s historical administration of musical works (administered on behalf of authors, composers and publishers). POSA has a Board of Trustees that has nine (9) members, seven (7) of whom are recording artists/musicians.

In terms of the legislation and the Regulations, SAMPRA, as the society representing record companies, has the exclusive right to licence and to collect money from music users. The general understanding is that SAMPRA also has the obligation to pass over the recording artists’ share to SAMRO/POSA for those recording artists represented by SAMRO/POSA. The law appears, however, to be vague and ambiguous on this issue. This lack of clarity has led to different interpretations of the law by different organisations.

SAMPRA interprets the law as saying that they have to pay over the recording artists’ share of royalties to record companies, and not to SAMRO/POSA. SAMPRA insists that record companies can decide on a different split and they also have the right to deduct whatever expenses, including advances paid to recording artists, from the artists’ share of the Needletime Rights royalties.

SAMRO/POSA and CIPRO have been arguing that SAMPRA should only distribute to record companies their 50% share and that record companies do not have the right to deduct anything, including advances, from recording artists’ share. SAMRO/POSA and CIPRO insist that recording artists’ share belonging to recording artists represented by SAMRO/POSA should be paid to SAMRO/POSA and not to record companies. SAMRO/POSA will in turn make a further distribution of the royalties to recording artists who participated in the relevant sound recordings.

This impasse has led to CIPRO refusing to approve the SAMPRA distribution plan because approving the distribution plan in its current form would lead to a situation where CIPRO would not have control over how Needletime Rights royalties meant for recording artists are handled by record companies. This is because accredited Needletime Rights societies are required to account to CIPRO regarding their handling of received royalties, as part of the accreditation conditions.  CIPRO wants SAMPRA to change its distribution plan and policy to state that 50% of the royalties collected by it will be paid over to SAMRO/POSA because it represents musicians/performers, and not to record companies.

CIPRO threatened to withdraw SAMPRA’s accreditation in January 2010, if SAMPRA did not comply with the CIPRO requirements that it (SAMPRA) should distribute the performer share to the society that represents recording artists. SAMPRA responded by taking CIPRO and the Minister of Trade of Industry to court.

Whilst members of the POSA Board of Trustees respect the different positions adopted by different parties on this issue, and whilst we acknowledge that the ambiguous and vague legislation is at the root cause of the impasse, we wish to bring it to SAMPRA and CIPRO’s attention that the non-distribution of Needletime Rights royalties is a violation of recording artists’ rights. It is unjust that Needletime Rights royalties cannot be distributed due to legal wrangling that can be resolved out of court through negotiations and the amendment of the legislation.

The POSA Board of Trustees, on behalf of recording artists, urges all parties involved in the administration of Needletime Rights to find a speedy and amicable solution to the impasse so as to allow for the distribution of Needletime Rights royalties to recording artists.

To our minds, this has become a human rights issue. The income of hardworking and long suffering recording artists is now compromised by an ambiguous and vague piece of legislation that does not seem concerned with the welfare of those it sought to benefit. Whilst the wrangling continues, it is the smaller man, the hard working recording artist, the driver of the music industry who, to all intense and purposes, suffers. The output of the recording artist is what gives the music industry its raison d’être. It is therefore necessary to protect and promote the interests and rights of recording artists. The speedy resolution of the impasse on the distribution of Needletime Rights royalties presents one such opportunity.

During this month of April 2011, the month of freedom, we expect that:

  • justice will prevail for the sake of our hard working and long suffering members;
  • music industry players will resolve this matter speedily;
  • the Ministry of Trade and Industry will amend the law as a matter of urgency to remove the ambiguity that currently exists, and that has contributed to the current impasse; and
  • parties involved will use this month of freedom as a catalyst in breaking the unnecessary impasse. Let us respect and honour recording artists’ rights! 

We look forward to the flow of Needletime Rights royalties.

Sibongile Khumalo
Chairman: POSA
For, and on behalf of the POSA Board of Trustees.