SABC paid its first and only payment in 2017 on needle-time and paid everything to IMPRA and nothing to SAMPRA (who claim to represent 93% of the playlist). SABC is still estimated to owe somewhere between R100-300M ($5.5 - 16.6M) in outstanding needle-time royalties. IMPRA and SAMPRA, DSAC, DCDT and SABC have been in meetings to address the deadlock around payment of needle-time royalties and have reached a consensus as well as an agreement from SABC to make an advance payment to assist members.
Communication and Broadcast Rights in South Africa
Distribution in South Africa has a lot to do with political connection. PAIN is breaking through this by putting everyone together as a collective and taking action as a group.
The low hanging fruit in the industry is the neighbouring rights which include performance rights for broadcast and public performance of recorded music. Both audio tracks and and music videos, earn revenue for record labels and their artists. This revenue split in South Africa is 50% to the label and the other 50% is paid to the artists that performed the music on the recording.
The revenue streams from these neighbouring rights have been growing throughout the world and is thus an important source of income to record labels and their artists as the income from the sale of physical product is rapidly drying up.
South Africa holds a small portion of the international market, with rights to the sound recording being worth approximately R350M per annum ($18.346) whereas the global turnover of this industry is about $10B or about R180billion.
Section 9 sound recording communication to the public rights are also known as “needle-time” rights. These rights are licensed to radio and TV broadcasters, retailers, banks, shopping malls, sport stadiums, restaurants and venues of various descriptions when they communicate a sound recording to the public. South African Music Performance Association (SAMPRA) received a Section 3(1)a accreditation in 2008, to collect on needeltime, although the law came into practice in SA in 2002. Independent Music Performance Rights Association (IMPRA), an organ of the Association of Independent Record Companies (AIRCO) was set up to compete for these royalties.
Music Video collections are a neighbouring right. These collections are represented by RiSA Audio Visual (RAV) formed in 2000 with public performance rights in cinematographic films (music videos). Association of Independent Record Companies (AIRCO) was established through funding from Department of Arts and Culture (DAC) and Worldwide International Network (WIN) as a section 21 company, belonging to its members. Both agencies collect on music video licences and on the specific IRSC code.
Recording Industry of South Africa (RISA) trade association is an association of sound recording owners and licensees. It runs the annual SAMA Awards, issuing ISRC Codes as well overseeing an Anti-Piracy Unit. RISA represents IFPI in South Africa and are market share driven.
National Organisation of Reproduction Rights in Music (NORM) - formed in 1970 as a publishers association, primarily representing the interests of the multi-national and foreign publishers. They had a Section 6. Licence in Mechanical rights in literary and musical works. NORM are market share driven.
The non-payment of rights-holders by AIRCO has caused the independent industry to work together to address these issues and create proper transparent streams of reporting and accounting so this type of situation never occurs again. WIN has suspended Airco’s membership and is completely supportive of empowerment and transformation going forward.
Section 9 sound recording communication to the public rights also known as “needle-time” rights are under-represented in South Africa, with only an estimated 15% of potential clients actually taking licenses. These rights are licensed to radio and TV broadcasters, retailers, banks, shopping malls, sport stadiums, restaurants and venues of various descriptions when they communicate a sound recording to the public.
SAMPRA recently published their annual report and we asked Pfanani Lishiva the CEO some questions and here they are with his answers: