Business Day

Collecting societies ‘failing to unite creative sectors’

- 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 twothirds 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 soundrecor­ding 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 soundrecor­ding owners for needletime 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.

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 apartheide­ra monopolies and scapegoate­d 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.

 ?? /Siyabulela Duda ?? Distributi­on of royalties: Trade and Industry Minister Rob Davies is satisfied with the Copyright Review Commission’s findings in the music sector.
/Siyabulela Duda Distributi­on of royalties: Trade and Industry Minister Rob Davies is satisfied with the Copyright Review Commission’s findings in the music sector.

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