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Musos say payments a royal mess | South Africa | Norton Rose Fulbright

Musos say payments a royal mess

22 May 2011

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This article was first published by the Sunday Times, Business Times.

Musicians and composers are furious about the inability of royalty collection agencies to pay money owed to them since new legislation came into force in 2002.

The matter was heard by the Copyright Review Commission during public hearings in Johannesburg this week.
The legislative changes reintroduce “needletime” royalties, entitling artists and composers to be paid a certain amount every time a song is played on radio, TV or in public places, including restaurants and shops. Royalties should also be paid for cell phone and other music downloads.

Payments to artists could total at least R200-million a year if the legislation is properly enforced, said Nick Matzukis, an advocate and lecturer in music law. To date, royalties of about R13.5-million have been collected from small users and some retailers, but no needletime royalties have been paid to date.

Award-winning guitarist, composer and producer Selaelo Seiota said: “These monies are not being distributed because of certain legalities. We're professionals who work very hard, yet our monies are locked in.

“You don't hear of doctors not getting paid because their salaries are parked somewhere. I need to be paid, full stop.”

In response to the concerns raised by the creative industry, Trade and Industry Minister Rob Davies established the Copyright Review Commission last year to review the process. The commission is expected to submit its final report with recommendations to the minister at the end of July.

Needletime royalties are fairly common internationally, and used to be in place in South Africa until 1965 when broad-casters lobbied successfully to have them removed.

They allow for recording artists, background singers and anyone who contributed to a recording getting airplay to be paid every time their work is put in the public domain. Recording companies, typically the owners of the music, are also entitled to a portion of the royalties.

Brian Wimpey, head of the Intellectual Property department at Deneys Reitz, said the issues at stake are complex, and that it won't be easy for all parties to reach consensus.

“One of the main problems is how to divvy up the royalties between the recording company and the artists involved, particularly 'background' artists such as back-up singers, sound engineers and the like.

“To add to the mix, the broadcasters complain that needle-time royalties increase the cost of playing music,”said Wimpey. The old system was straight-forward: an artist would sign a contract with a record company and earn a portion of every record that was sold.

Background singers, instrumentalists and other contributors to the recording would get their one off pay for their part of the job, while the featured artist would receive a portion for every record sold.

Broadcasters would simply buy a record from the recording company and could then play it as often as they liked. Broadcasters are fighting the needle time system to limit the amount of royalties they would have to pay, while collecting agencies still need to find a way to split the royalties.

A court battle is under way to determine if the broadcasters should be held liable for royalties from 2002, when the legislation was enacted, or 2006, when the regulations were published, and how much they should be paying.

The administration of needle-time only started in 2008. Participants at the hearings urged the commission to recommend stricter oversight over broadcasters to ensure minimum local content requirements are met.

They asked it to investigate ways to register musicians and other people involved in the industry to enable the payment of royalties to the entitled parties.

“Second by second, artists are losing out. I'm tired of talk; I want action now,” said Seiota.