Audiovisual industry’s fate in the balance
• Proposed new bills’ ‘one size fits all’ approach poses serious threat to thriving creative industry
In their final step to becoming law, the latest versions of the Copyright and Performers ’ Protection Amendment Bills are scheduled to be deliberated on by the National Assembly after their approval by the portfolio committee, over the objections of the opposition members.
If the bills are adopted by the National Assembly, which looks increasingly likely, they will be sent to the president for assent.
The bills have been the subject of controversy since they were first introduced into parliament seven years ago. One of the main criticisms of the bills is that they seek to adopt a “one size fits all” approach to a number of highly complex and nuanced issues for industries which operate in vastly different ways, even though they are all classified as “creative”.
The issues have been hotly debated in the music and publishing industries, while less attention has been given to the audiovisual sector incorporating film production, advertising, animation and the service industries that support them.
The proposed legislation presents several challenges to this rapidly growing sector that the government has recognised as a key driver of job creation and small business growth.
The primary issue is the proposal of placing performers at the same level as producers who create audiovisual works, so they share in the profits derived from the commercialisation of audiovisual works.
Interestingly, the legislation does not recognise creative people working behind the scenes — directors, cinematographers, editors and production designers — in the same way.
By comparison, performers often have little to do with the production of audiovisual works given that they usually only become involved towards the end of the process and work exclusively in front of the camera.
Producers of audiovisual content were troubled to read the latest versions of the bills passed by the National Council of Provinces in September 2023, which state producers and performers will need to pre-negotiate a share of royalties or “equitable remuneration”. If agreement can’t be reached, the dispute must be referred to a tribunal of retired judges. This is hardly a practical solution given the quick turnaround at which content is created in the highdemand environment.
The producer must register each act of commercialisation of an audiovisual work (in a yet unspecified procedure that will appear in ministerial regulation) with the appropriate collecting society, and must presumably make financial records available for the collecting society to scrutinise to establish the correct amounts due to each performer.
Any person failing to comply will be guilty of an offence and subject to a fine or imprisonment (not exceeding five years) or both. If the party is a company, it will be fined a minimum of a staggeringly excessive 10% of its annual turnover.
What does all this mean in practical terms? Let’s take the advertising industry as an example. The industry is robust, competitive and produces content at a fast pace. An estimated 6,000 pieces of advertising material are produced in SA every week.
The industry recognises the role of performers by paying them “usage fees” for the use of their image to sell the marketer’s product. Performers are paid a “daily performance fee” and then also the usage fee (based on the duration and territories in which the commercial will be broadcast) and renewals for every additional year the commercial is flighted at an agreed on escalation.
For example, a featured (recognisable) performer may be paid R5,000 for one shooting day and then 200% for a year’s usage in SA, amounting to R15,000 for a day’s work. If the commercial is to be broadcast worldwide, the usage fee will increase to 1,600% and the performer will earn R85,000. If the commercial is renewed for a second year, the performer will be paid the same amount again, plus the agreed on escalation (usually between 10% and 25%).
In terms of the bills, a new share of royalty or equitable remuneration must be paid in addition to the usage fee if the usage fee does not also cover all exploitation rights conferred by the acts, once amended, from which performers are meant to benefit.
The uncertainty created by this “world-first” legislative approach introduces increased risk to the advertising industry. Unfortunately, the department of trade, industry and competition never conducted the required economic impact assessment study of the consequences of this legislation in the advertising sector.
As a result, there is a real risk the industry’s clients will look to other options. This could possibly take the form of using other media platforms on which to spend their advertising budgets.
OTHER OPTIONS
Alternatively, they could look at increasing the number of imported commercials or producing advertising outside SA in the many valuefor-money production centres which have sprung up to service markets where production is either too expensive or too onerous. Technology may also play a role as it becomes easier to generate imagery in this cutting-edge field.
The legislation will be a game-changer for SA’s lucrative “service industry”, which attracts both advertising practitioners and filmmakers from around the world. The
unfriendly legislation will be negatively perceived by international partners who will find the reasoning (or rather lack thereof) difficult to comprehend.
The warning has already been sounded to parliament by international producers, studios and streamers at the parliamentary hearings, but the department kept its head firmly in the sand and believes any criticism is simply hot air and that the industry will continue to grow regardless of the obstacles it places in its way.
While some actors associations have been advocating for the bills because they have been led to believe they are going to be paid additional royalties, they have offered a simplistic version of what the legislation entails, leaving out the potential hazards.
On the other hand, thousands of freelancers, behind and in front of the camera, and hundreds of companies providing services to the industry will be negatively affected by these and other provisions in the bills.
The stakes are high as the bills pass through the National Assembly. Not only performers stand to lose if the gamble does not pay off. The future of SA’s entire audiovisual industry hangs in the balance.
THE WARNING HAS ALREADY BEEN SOUNDED TO PARLIAMENT BY INTERNATIONAL PRODUCERS, STUDIOS AND STREAMERS