The Great South African Needletime Debacle

This is a highly complicated legal matter, but it affects every recording musician in the country so I will try, in this article, to simplify and explain it all for you. Parts of this article may make heavy reading for the layman (especially the parts about the legislation), but I urge you to read and absorb it all, from beginning to end. I would also prefer it if you read it all in one sitting, but if the publishers decide to break it up into weekly parts, you will need to read the previous weeks’ articles again in order to recap them so as to understand the one you are reading this week. Everything you will read in this article as a whole (even the legal content) is vitally important for the performing musician.

Let’s start with a recap…

The Different Copyrights

There are two main copyrights that apply when a piece of music is recorded: a) the copyright in the composition and b) the copyright in the recording. They are distinct and different copyrights, and may be owned by different persons.

a) The copyright in the composition is the right flowing from ownership of the creative work – the concept and origination of the music and lyrics. In a nutshell, when a piece of music is written, a legal right to it, called a copyright, comes alive and vests in the songwriter. Thus the copyright in the composition relates to the creation or genesis of the song, its idea, lyrics, melody, structure etc. This copyright gives rise to several rights, including mechanical rights (the right to make copies) and performance rights (the right to publicly perform, broadcast or diffuse the song. The royalties flowing from these rights are known as publishing royalties and are paid to the songwriter (or his publisher if he has one). Thus, every time the song is broadcast, a performance royalty becomes payable to the songwriter, due to the fact that it stems from the copyright in the composition. Despite the fact that this is called a performance royalty, no royalty is due to the performers from this copyright – only to the songwriter.

b) If that piece of music is later recorded (by anyone, including the songwriter himself), a totally separate and distinct copyright then comes about, called the copyright in the recording. The copyright in the recording, as its name would suggest, is the right flowing from the ownership of the actual recording of a performance of the song/s (or the master), as opposed to the composition. As stated above, this is a different copyright, and usually vests not in the songwriter, but in the record company (or whomever facilitated/paid for the recording.) If this happens to be the songwriter as well, only then does the copyright in the recording also vest in him.) You have to understand this distinction to carry on.

There is one more little complication to understand before we continue: when a song is written with lyrics (this is the case in South Africa but not all countries, eg America is different), two separate copyrights in the composition come about – one in the lyrics and another in the music. (In America the position is that the musician owns part of the copyright in the whole composition, the lyricist the other part of the same copyright in the whole composition, and the two cannot be separated.) So in South Africa, if Zakk wrote the music and Zebadiah wrote the lyrics to a song, these two separate people can own two separate copyrights in the composition – Zebadiah owns the copyright in the composition of the lyrics, and Zakk owns the copyright in the composition of the music. (If they were in America, each would own half of the single combined copyright in the composition). But the record company still owns the copyright in the recording – a third copyright. If you understand this, we are now on the road to understanding needletime.

What is Needletime?

As stated above, performance royalties are collected and distributed to song composers and their publishers for the public performance of songs. But until the 2002 amendment to our law, there was no legal provision for performers, producers, or record companies to collect any royalties for the broadcast performance of the recordings of these songs.

Needletime (also called “Pay for Play”) is therefore the calculation, collection, and distribution of oyalties to the performers and owners of the recording for the public performance of the recording. (The copyrights vested in the sound recording are sometimes called “phonographic rights” and overseas are often indicated by the symbol  (p).) In essence, needletime offers recording musicians an additional revenue stream beyond that of live performances and sales royalties paid by record companies, without infringing on or detracting from the rights of composers and authors.

Some believe that needletime will effectively activate the fundamental goals of intellectual property by finally enabling musicians to make a living from their music.

The first point to note is that needletime relates to the copyright in the recording. As at time of writing, needletime is still regarded by some as a ‘new’ royalty stream in South Africa, because it only re-entered our law in 2002, and the regulations for its administration and distribution were only passed in 2006. Its actual administration only began in 2008 and still, in 2010, no needletime royalties have been distributed to labels or musicians.

In fact, needletime it is not really a new royalty, because it did exist in South Africa in the sixties but was removed for various reasons (particularly broadcaster interference.) It is therefore not some strange new right, as some artists seem to believe, but is simply the reactivation of the performance right relating to the copyright in the recording (as opposed to the performance right relating to the copyright in the composition.) In law at least, needletime is back, and this is potentially very good news for musicians who may not have written the songs they helped record), for music producers and, of course, for the record companies (and advertisers) who own the recordings. Needletime was reintroduced after much lobbying from ASAMI (now RiSA), representing the labels, and MUSA (now CWUSA), representing the performers. Their point was that the owners of the copyright in the recording, and the performers who contributed to the recording should share in a new royalty to be derived from a new and additional license fee to be paid by users broadcasting, diffusing or otherwise communicating the recorded work.

As indicated, needletime did previously exist in SA, but was removed from South African copyright legislation in 1965 due to pressure from the broadcasters. Recent amendments to the Copyright Act of 1978 and the Performers Protection Act of 1967 have resulted in its re-introduction into South African legislation. Under the old legislation, performers enjoyed no copyright protection – this right was confined to composers and authors. This lack of protection for performers was out of keeping with international trends, in which needletime royalties are increasingly the norm. South Africa's non-membership of the Rome Convention (which dealt, inter alia with needletime) showed how far behind we have been in this matter, for some time. The absence of needletime legislation for so long has been seen by some as one of the key hurdles to the development of local music and the music industry.

Yet the re-introduction of needletime was controversial. On the one hand it was argued that the reintroduction of needletime would extend the scope of intellectual property rights of performers and would give performers greater protection. On the other hand, it was argued that the imposition of needletime would simply place unnecessary additional, onerous burdens on broadcasters and users and make music performance and broadcast too expensive.

I agree with the former view. Under the concept of needletime, recording artists, background singers, instrumentalists, and anyone who contributed to a recording that is getting airplay (performance) should and will be compensated for use of their work when it is performed or communicated to the public. It is also important to note that needletime is a sub-category of performance royalties – just one that stems from a different copyright. The vital thing about needletime is that the musicians who played on a recording will now for the first time in decades be paid a performance royalty even though they did not write the song. This is an important gap that needed to be filled. Of course, the owner of the recording will not be left out of this new royalty stream - far from it (and in most cases that is, naturally, the record label.) Yet there are skeptics.

As pointed out by Tim Kraft, some professionals, such as respected advertising music producer Rob Schroder, feel that the administrative burden, the inefficiencies in the industry structures and the complexities of collecting the information required for the fair distribution of needletime royalties, will effectively cancel the financial benefits. Schroder may well be correct as things stand (just look at all the litigation and red tape currently going on), but in my opinion it is up to us, as the industry, to solve these issues and get needletime working smoothly – there is simply too much money at stake not to do so.

Needletime does not replace or get deducted from any other existing royalty stream. It is paid by the user in addition to the other licensing fees listed above. So where does this extra money come from? Quite simply, from the music users (broadcasters, retailers, clubs etc) who must now pay more every year for the music they use, in order to cover this new royalty.

The main object of needletime is to fairly remunerate and recognize the musician, producer and owner of the recording copyright for their contributions to the recording. This is a good thing, because it can only help to build a more healthy South African music industry, but it cannot be done without an additional license fee. Ask yourself: why shouldn’t a drummer who did not write the song but played a great back-beat, leading to significant airplay, not be rewarded for this (especially if, despite the airplay, album sales were low)? And why shouldn’t the label that owns the recording receive a performance royalty every time its recording is used or broadcast to the user’s benefit?

After all, the broadcasters are earning advertising revenue from the use of the recording, and the recording was not only created by the author who penned the composition – it was also created by all who contributed to the recording.

Thus, needletime was re-introduced to our law with the passing of the Performers Protection Amendment Act of 2002, and the promulgation in June 2006 of the Regulations under the new Act. This new legislation finally provides for the right of remuneration to performers and record companies for the public use of their recorded performances and audio recordings.

The Legislation

The Copyright Amendment Act, No. 9 of 2002 amended section 9 of the Copyright Act No 98 of 1978 and provides the legal framework upon which needletime royalties can be collected in South Africa. It also provides for the possibility of means to control the various uses of a sound recording. It is this legislation that has re-introduced needletime to our law, but it is also true to say that the legislation is to some degree the cause of the current problems, since it could have been drafted in a more precise manner.

Section 9, as amended by s.2 of Act 9 of 2002, now reads as follows:

Nature of copyright in sound recordings

9. Copyright in a sound recording vests the exclusive right to do or to authorize the doing of any of the following acts in the Republic:

(a) Making, directly or indirectly, a record embodying the sound recording;

(b) letting, or offering or exposing for hire by way of trade, directly or indirectly, a reproduction of the sound recording;

(c) broadcasting the sound recording;

(d) causing the sound recording to be transmitted in a diffusion service, unless that service transmits a lawful broadcast, including the sound recording, and is operated by the original broadcaster;

(e) communicating the sound recording to the public.

Section 9 (a) is of particular importance to record labels and producers of music for commercial release, and clauses (b) through (e) are relevant to producers of commercial music that is not destined for mechanical reproduction and resale (including digital streaming, radio and television broadcasts, public performance, diffusion and other communication by users to the public).

In the case of piece of advertising music, ownership in the sound recording may still vest in the advertiser, since the production of the sound recording would ordinarily be considered a work for hire.

Section 9A, which covers the royalties payable, makes the important new provision for the “performer”. Thus, the Act now makes a distinction between the performer and the owner of the sound recording, and refers to “an agreement” between the parties concerning the amount of the royalty to be paid to each. It reads as follows:

9A. (1)

(a) In the absence of an agreement to the contrary, no person may broadcast, cause the transmission of or play a sound recording as contemplated in section 9(9), (d) or (e) without payment of a royalty to the owner of the relevant copyright.

(b) The amount of any royalty contemplated in paragraph (a) shall be determined by an agreement between the user of the sound recording, the performer and the owner of the copyright, or between their representative collecting societies.

Now here is the important part for performers: Section 9A (2) provides that performers on the sound recording are entitled, by law, to a share of the royalties earned by the owner of the sound recording. According to the legislation, this share will be determined by agreement between the owner and the performer or their representative societies.

The section reads as follows:

9A (2)

(a) The owner of the copyright who receives payment of a royalty in terms of this section shall share such royalty with any performer whose performance is featured on the sound recording in question and who would have been entitled to receive a royalty in that regard as contemplated in section 5 of the Performers' Protection Act, 1967 (Act No. 11 of 1967).

(b) The performer's share of the royalty shall be determined by an agreement between the performer and the owner of copyright, or between their representative collecting societies.

Section 1 (2) of the Performers’ Protection Act is also worth noting. It reads:

“…any reference… to the doing of an act in relation to a performance… shall be taken to include a reference to the doing of that act in relation to a substantial part of the performance.” With regard to the words “substantial part”, this has not yet been tested by our courts, but our copyright legislation and case law often follow English precedents, and the English courts have decided that the meaning of the legal term “substantial part” could involve either a qualitative or a quantitative measure, or both, depending on the facts of each case. This means, in my view, that if an agreement between a record company and an artist provides that they will split performance royalties equally, one or more session musicians, backing singers, group members or studio producers can claim a share of the contracted performer’s share of the needletime royalty that the record company collects from the user, so the performers will have to split their share, while the copyright-owner (the label) retains its half-share. (This certainly seems to be the accepted practice overseas, at any rate.)

The 2006 Regulations promulgated under the 2002 Act were effectively Regulations of Collecting Societies for Needletime and declared Cipro as an accrediting authority since June 2006. Cipro has the power to supervise Collecting societies for governance purposes. Under these regulations CIPRO accredited SAMRO, SAMPRA and SARRAL to administer needletime (but has subsequently withdrawn SARRAL’s accreditation.

How does Needletime fit into the existing landscape?

Now that we have understood what the new needletime legislation says, let’s go back and place it in context to the industry, the royalty collection societies and to the other royalties that are already payable:

- Performance Royalties

These publishing royalties are SAMRO’s primary function, and have been for many decades. Modern methods of communication like radio and TV broadcasting can use a single recording to entertain an audience of thousands or even millions. This considerably limits the sales of recordings, and therefore the sales royalties earned. As a result of these developments, for many composers, the principal source of livelihood today is the performing right royalty, a fee payable to the composer by anyone who performs his/her music in public. SAMRO controls this right in Southern Africa.

When a composer/artist becomes a member of SAMRO, he must assign to SAMRO the performing, broadcasting and diffusion rights in all his works. SAMRO issues blanket licenses to music-users throughout its territory - banks, broadcasters, cafés, concert promoters, hotel proprietors, retail stores, night clubs, restaurant owners and others – to perform any music of its members against payment of proper fees. SAMRO also has Agreements of Reciprocal Representation with similar organizations in more than 100 countries throughout the world, with which it remains in continuous contact. It authorizes those organizations to administer the rights of its members in their respective countries, and, conversely, they authorize SAMRO to administer the rights of their members in Southern Africa.

SAMRO has an active body of Licensing Representatives who visit all establishments in which music is likely to be performed in some manner or other, in order to ensure that all such performances are properly licensed and that the appropriate fees are regularly paid to SAMRO for subsequent computation of royalties and distribution to its members and affiliated societies. Thus far, the overlaps seem large, and it is no surprise, therefore, that SAMRO has formally expressed its intention to administer needletime.

- Mechanical Royalties

In late 2006, SAMRO also decided to start administering mechanical royalties, despite the fact that this has traditionally been the domain of SARRAL and later NORM. The reason for this is the steady demise of SARRAL over the last few years, culminating in an order for SARRAL’S liquidation after being sued by Colin Shapiro, and CIPRO’S subsequent de-accreditation of SARRAL. The decision to administer mechanical royalties makes SAMRO a very dominant and powerful organization, but the move may well prove to be good for our industry, due to SAMRO’s good financial standing and record of transparency.

SAMRO has thus far been successful in this diversification, and is clearly moving towards becoming a “one stop shop” for composer musicians to use as their sole agency for all royalties, especially since it now also wishes to administer needletime – see below.

- Needletime

Since needletime is a type of performance royalty (albeit one that relates to the copyright in the recording rather than the copyright in the composition, which has until now been SAMRO’s traditional domain), it makes sense that SAMRO would wish to be involved in the administration of this royalty. It does, after all, have an existing strong infrastructure in place to police the users. SAMRO’s decision to administer needletime was announced in late 2008. Since needletime administration was re-introduced with new regulations in 2006 (see above) and implemented by SAMRO in 2008, musicians now theoretically should be able to receive payment for the exploitation of their recorded performances through SAMRO, particularly if they are composers as well. The performers to benefit from this include lead vocalists, backing vocalists and instrumentalists. Where such people happen to be the songwriters as well, the value of existing performing and mechanical rights will not be affected, and SAMRO should be able to administer both on the same statement. Bearing in mind this landscape, it would seem to make absolute sense (at least from the performers’ point of view) that SAMRO should somehow be involved in the administration of needletime for performers (perhaps even those that are not songwriters.) Indeed, SAMRO has set us POSA (Performers Organisation of South Africa) for this very reason. More about this later.

Royalty allocation of Needletime

Although this matter is currently subject to litigation, the general consensus seems to be that the needletime royalty collected by SAMPRA will/should be shared by the record companies and the artists on a 50/50 basis.

The actual tariffs to be paid are also the subject of litigation before the Copyright Tribunal. (For example SAMPRA, see below, believes that a broadcaster that uses music as 100% of its content should pay 10% of its advertising revenue, one that uses music as 80% should pay 8% of its advertising revenue and so on; the broadcasters, naturally, disagree.) Thus, although no finalized table of actual tariff rates is yet available due to the litigation, we think we know what percentages will be paid out to whom (since this seems to be generally agreed, despite the litigation, and there are overseas precedents): needletime royalties to record companies should theoretically comprise half the income with the other half going to the performers. Of the performers’ half, this amount should be further split on a 65%/35% basis. 65% should be shared between the “featured performers” on the sound recording, and 35% between the “non-featured performers” on the sound recording. It should be noted that this proposed 65%/35% split is not strictly-speaking a directly-legislated law in South Africa, but is the English model that POSA proposes should be followed in South Africa (and in my view POSA should be empowered to negotiate this model – see below.)

The royalty split between the performers

There are three categories of performers that will benefit from needletime: Featured Performer, Non-Featured Performer and Other Featured Performer. Thus, the performers to benefit from needletime will be all those who performed on the recording (including lead vocalists, backing vocalists, instrumentalists and so on) as well as the producer. Solo artists will be featured performers, full band members will all be featured performers, session musicians will be non-featured, and independent producers will (at least to begin with) be non-featured performers if they acquire documentation to this effect. These latter two categories, particularly producers, can even make themselves into other featured performers and thus raise their needletime income by proving that they contributed significantly more than non-featured performers to the recording. POSA’S website explains as follows:

• A Featured Performer is an individual Performing Artist in whose name the CD was recorded, or a member of a band and who made a performing contribution to the recorded performance.
• A Non-Featured Performer is a Performing Artist who has been engaged for a fixed period of time, customarily known in the industry as a session, specifically to make one or more recorded backing performances which subsequently are included in the sound recording. This includes a studio producer who makes a performing contribution to the recorded performance.
• The term ‘Other Featured Performer’ is used only in exceptional circumstances, where a performer’s contribution that would otherwise fall within the Non-Featured Performer category but merits (sic) Featured status. Participants who may fall into this category are limited to:
  •  A Lead Vocalist or instrumentalist not exclusively contracted to the commissioningrecord label or whose professional name appears with or is linked to the name of the Contracted Artists credited with making the recording; and
  • A performer who is entitled under the terms of a contract with the Contracted Artist to receive royalties from sales of the recording.

How will Recording Artists Notify POSA of Recorded Performance(s) in which they Participated?

Performers who are SAMRO members for Needletime Rights should notify POSA of all recorded performances in which they played a role, by completing the POSA Needletime Notification of Recorded Performances Form. The following will be needed as supporting evidence to register a claim:

Non-Featured Performers

POSA requires Non-Featured Performers to produce one the following to support their claim:

(i) record/CD/tape sleeve inlay crediting performance; or

(ii) contracted artist’s official website crediting performance; or

(iii) official correspondence from the record company confirming instrumental or vocal contribution; or

(iv) letter from fixer, studio producer or orchestral manager confirming contribution category; or

(v) signed verification from one of the featured artists or their management; or

(vi) signed verification from at least two other non-featured musicians already confirmed on the recording; or

(vii) in the case of a studio producer, a certification letter from one or more of the contracted featured performer(s) who performed on the recording, or the record company to which they are contracted.

Other Featured Performers

POSA requires Other Featured Performers to produce one the following to support their claim:

(i) a product sleeve front cover or spine showing the performer’s name with the name of the Contracted Artist or linked thereto with the words ‘featuring’, ‘with’, ‘and’, ‘meets’, ‘versus’ or derivations thereof. (A credit on the product sleeve naming the performer as a member of a group does not establish a valid claim to Other Featured status); or

(ii) a contribution as a lead vocalist; or

(iii) contract between the performer and the Contracted Artist entitling the performer to receive royalties as a singer or musician from sales of the recording; or

(iv) official correspondence from the Contracted Artist or their management confirming contributing category; or

(v) a duly executed contract between the performer and other members of the group confirming contributor category.” As you can see, these matters are all questions of proof, ie letters from record labels, clauses in recording agreements, name appearance on album booklets, etc. It is therefore vital that you see to the provision of these documents before the recording takes place.

A note on feature/non-featued performers

As observed by Timothy Kraft (who is, of course, a noted music producer) in his excellent thesis “From Genesis to Cashing the Cheque”, looking only at the ‘featured’ performer’s contribution would ignore the simple truth that very little of the performance on a typical performing artist’s album can be attributed to the ‘featured’ performer. Very often the featured performer comes into the studio and sings for an hour to a track that may have taken several other performers a day to make.

The sound engineer adds to the performance and may take another three hours to retune the vocalist’s intonation errors and edit this performance in a more musically acceptable manner. The engineer further shapes, moulds and manipulates the sound using technical skill with music shaping instruments. In Kraft’s view, this makes the engineer a performer, and he should be entitled to needletime. Kraft also cites the example of the conductor who performs before the orchestra leading them to produce the musical sound. Although he does not personally produce any noticeable sound himself, he too should be classified as a performer.

In Kraft’s opinion (and he should know), the argument that the other contributors to the affixed performance are not defined as performers because their performances were ‘works for hire’ is “full of holes”:

a) Firstly, the ‘featured artist’ is in the same category and has the status of a commissioned person since a personal services agreement states something to the effect of, “The Company wishes to engage the services of The Artist and The Artist accepts the engagement ... in consideration for these services The Company agrees to pay The Artist a royalty of …”

b) Secondly, says Kraft, Section 21 of the copyright act deals specifically with the ownership of the work and in no way suggests that if a performer is paid to perform, that he/she ceases to be a performer for purposes of needletime. I tend to agree. The legislation (or at least POSA’s interpretation thereof) seems a little tough on music producers and recording engineers in particular. Even to become a non-featured performer, a producer, according to POSA, needs a certification letter from a featured performer. In order to become an “other featured performer”, the requirements are even tougher – the producer must enjoy ‘featured with’ status on the album cover or have a sales royalty agreement with the artist (this is crazy, because his sales royalty agreement will surely be with the label, not the artist), have official correspondence or a contract with the artist to this affect (again – what if his deal is with the label, the owner of the copyright in the recording – would this not be preferable?), or sing lead vocals (this is arbitrary if you ask me – what if it is a heavily instrumental production?) Thus, it is submitted, POSA’s requirements for featured, non-featured and other featured status need to be refined somewhat.

SAMPRA has recommended that, if an artist’s contract already provides for the producer and the performer to participate in performance royalties, then that contract should govern the split of needletime royalties as well. If any existing contract does not specifically provide for the producer to participate in performance royalties, the prevailing legal view is that the producer will not participate in the performance royalty, but SAMPRA has further proposed that in such circumstances, consideration should be given to sharing the performer’s share of the royalty between the performer and the producer in a 4:1 ratio. This is an unusual proposition because: firstly, it generally does not apply in other countries; and secondly, it will no doubt be welcomed by producers, but not by other performers, who will argue that producers have been paid a separate fee and/or sales royalty for their work and they should not necessarily get an automatic one quarter of the performers’ needletime unless they qualify as non-featured (or even featured) performers according to POSA’s rules.

Now that we have understood the royalty splits as best as we can (bearing in mind the very uncertain legal framework), let’s now turn our attention to the largest bone of contention – the institutions entrusted with managing this money for us, some of whom are involved in the litigation:

The Parties

- CIPRO

CIPRO (The Companies and Intellectual Property Registration Organisation) is the government department (part of the Department of Trade and Industry) tasked with the responsibility of registering all corporate entities and (in particular, for the purposes of this article) the organizations empowered to collect copyright license fees and distribute the resulting royalties. CIPRO, therefore registered SAMRO and SAMPRA as Section 21 (not for profit) organizations and accredited them to administer needletime. It accredited SAMPRA as the licensing body and recently de-accredited SARRAL as a needletime administration body. CIPRO requires that such organizations provide a “Distribution Plan” to ensure that the registration of the organization is in the best interest of all stakeholders.

Now let’s take a little time to talk about the collecting societies involved:

- SARRAL

SARRAL is under a liquidation order, has run out of time to lodge its appeal. Furthermore, despite its desire to administer needletime, it has been de-accredited by CIPRO. For now, therefore, we can regard SARRAL as being out of the needletime picture.

- SAMPRA

As you would expect, RiSA (Recording Industry of South Africa – the collective association of SA record labels) has been proactive in forming mechanisms to collect and control needletime fees through the establishment of a collecting society called SAMPRA (South African Music Performance Rights Association.) SAMPRA has a mandate from the RiSA members, record companies and music producers, and has established a mechanism to collect fees on behalf of these members. It has a detailed tariff list which divides users into various categories from clubs and pubs all the way through to major retailers and large broadcasters (the so-called “super-users”). Depending on the user’s category, various calculation methods are used by SAMPRA to determine the annual needletime license tariffs, from size of venue to number of hours in which music is played, to advertising income generated.

SAMPRA is a Section 21 (not for profit) company, and it is relatively new to the SA landscape, having only been accredited by CIPRO in June 2007. SAMPRA describes itself as a national, non-governmental organization that licenses to third parties specific copyrights that vest in record companies that are members of the Recording Industry of South Africa (RiSA). In terms of SAMPRA’s accreditation by CIPRO, only members of RiSA (see below) are entitled to membership of SAMPRA. This means that SAMPRA is there to recover needletime royalties for record company members, and in particular the majors. (It should be noted, however, that artists who distribute their own recordings may become RiSA members.)

The copyrights in sound recordings provided for in the Copyright Act, 1978, and administered by SAMPRA, are the rights of communicating such recordings to the public, diffusing sound recordings and the broadcasting of sound recordings. In general terms, therefore, SAMPRA is a performing rights society, concentrating largely on needletime (ie communication or broadcast of recordings), and represents the interests of the record labels. Now I do not wish to imply that SAMPRA is not interested in the plight of the performing musician, but SAMPRA will be the first to admit that it is was created by and is thus controlled by RiSA (ie the labels) and its first priority will always be to fulfil the mandate given to it by RiSA (despite its stated willingness to administer for the performers as well.)

SAMPRA states that it makes use of the ISRC (International Standard Recording Code), which is the international identification system for sound recordings and music video recordings. Each ISRC is a unique and permanent identifier for a specific recording, which can be permanently encoded into a product as its digital fingerprint. Encoded ISRC can provide the means to automatically identify recordings for royalty payments.

- SAMRO

SAMRO is the most important Southern African body controlling music performing rights. (As a reminder, performing rights are the rights to play or broadcast a piece of music – SAMRO’s interest in this was traditionally the publishing rights in this respect.) In late 2006, SAMRO announced that it intended to manage mechanical royalties as well, largely due to the impending demise of SARRAL. Finally, in 2008, SAMRO also announced its intention to administer needletime, making it a true “one-stop-shop” for its members. SAMRO’s key function is to administer the “non-dramatic” performing, transmission and broadcasting rights in the musical works of its members and the members of its affiliated societies. It does this by functioning as a collective administration society that negotiates blanket licenses with South African music users who are then granted access to all of SAMRO's extensive repertoire of copyright musical works. Performance royalties stemming from publishing copyrights has for decades been SAMRO’s primary function.

When a composer becomes a member of SAMRO, he must assign to SAMRO the performing, broadcasting and diffusion rights in all his works. SAMRO issues licenses to music-users throughout its territory - banks, broadcasters, cafés, concert promoters, hotel proprietors, retail stores, night clubs, restaurant owners and others – to perform any music of its members against payment of proper fees. (SAMRO also has Agreements of Reciprocal Representation with similar organizations in more than 100 countries throughout the world). SAMRO has an active and efficient body of Licensing Representatives who visit all establishments in which music is likely to be performed in some manner or other, in order to ensure that all such performances are properly licensed and that the appropriate fees are regularly paid to SAMRO for subsequent computation of royalties and distribution to its members and affiliated societies. SAMRO would therefore have been well-positioned to become a licensing body for needletime, although it has not received this accreditation from CIPRO (SAMPRA has).

In late 2006, SAMRO decided to start administering mechanical royalties and finally, in 2008, SAMRO announced that it wished to administer needletime rights as well (through its performers’ trust, called POSA). Since needletime is a type of performance royalty (albeit one that relates to the copyright in the recording rather than the copyright in the composition, which has until now been SAMRO’s traditional domain), it makes sense that SAMRO would wish to be involved in the administration of this royalty. This decision was announced in late 2008.

POSA

SAMRO has established an entity known as the Performers Organisation of South Africa Trust (POSA). POSA is a recording artists’ Trust that has been created to administer needletime rights on behalf of SAMRO’s performer members. POSA has its own Board of Trustees, some of who are recording artists.

According to POSA, in order to access their needletime rights, musicians need only register with and thereby authorise SAMRO to administer these royalties on their behalf. POSA has a Board of Trustees with eleven members, comprised as follows: three trustees appointed by SAMRO, six trustees appointed from the Beneficiaries (SAMRO Needletime Rights members); and two independent trustees who are neither SAMRO’s representatives nor representatives of the Beneficiaries. This sounds to me very much like a representative body for performers, therefore one which could reach agreement with SAMPRA on the royalty split, as long as it extended its membership base to include performers that are not songwriters (ie non-SAMRO members.)

With the knowledge that you by now have of SAMRO, POSA and SAMPRA, you will ask the question: what is the functional difference between SAMRO/POSA and SAMPRA and why do we need two organizations involved in needletime? The answer lies in the members they represent and their consequent right (or lack thereof) to license use: as stated above, there are at least two copyrights involved in any sound recording: the copyright in the composition being the origination of the music and/or lyrics and the copyright in the recorded work. SAMRO grants licenses to users for the broadcast, diffusion and public performance of copyrighted compositions works in its repertoire, and distributes royalties to music publishers and songwriters, since those rights have been assigned to SAMRO. For the holders of the copyright in the recorded work, SAMPRA grants licenses for the broadcast, diffusion and communication to the public of copyright sound recordings in its repertoire, and distributes royalties to record companies (that are members of RiSA) since they own those copyrights (although, confusingly, SAMPRA claims not to have assignment of the copyrights – see below.) In order to satisfy the new Section 9, record companies should then in somehow distribute the correct share to the recording artist(s) who took part in the specific recordings. (The big question at the moment, of course, is how to do this.) Practically, therefore, the performance (ie the broadcast, diffusion and communicating to the public) of music will usually involve two licenses to be granted to the user - one from SAMPRA and one from SAMRO (unless the user only plays live music and does not use recordings – a rare scenario.)

It can therefore be said that SAMPRA’s existence sits comfortably with the existence of SAMRO, because SAMRO does not represent record companies, and SAMPRA does not represent performers. SAMRO and SAMPRA are not, therefore, competitors (at least in theory) since they represent different rights holders. But this statement is based on the premise that SAMRO/POSA and SAMPRA can work together, communicate, reach agreements, and respect each-other’s spaces without feeling the need to usurp each other’s territory or feel the need (or greed) to control all the money flowing in. Presuming these two organizations sit (or are forced to sit) around the table, it would make sense that SAMPRA should pay SAMRO/POSA the 50% artists’ share, whereupon SAMRO/POSA could distribute to performers accordingly. A lot needs to be done before we get to this point, but I propose exactly this: that POSA be mandated to represent all performers and negotiate/collect from SAMPRA on their behalf. In anticipation of this wonderful scenario taking place, musicians might well be advised, at least if they are SAMRO members, to assign their Needletime Rights to SAMRO/POSA by signing the SAMRO nedletime Deed of Assignment. But what about non-SAMRO members? Therein lies the problem – POSA’s powers need to be broadened, failing which another collecting society will have to be constituted, to represent performers and producers that are not songwriters. Needletime rights are administered by SAMPRA only on behalf of RiSA (non-RiSA record companies are not invited to the party.) RiSA’s members are generally the owners of sound recordings, being the major record companies and most others. The record company, if it owns the recording, has to share the royalties paid in respect of needletime rights with the performers/artists, by law, due to the new Section 9.

SAMPRA is an accredited collective licensing body for owners of sound recordings and accordingly licenses users for use of copyright sound recordings. The owners of sound recordings are entitled to take the royalty, therefore, SAMPRA pays the needletime royalties to the owner of the sound recording (the record company), and the owner of the sound recording has to then share the royalty with the performer. While SAMRO is the accredited collecting society for performers (for all performing royalties including, since June 2006, needletime), it is, according to SAMPRA, not entitled to license users of copyrighted sound recordings – only SAMPRA, as the representative of the sound recording owner, is entitled to do this. Therefore, if SAMPRA has received the authorization from the owner of the sound recording to pay the needletime royalty to the performer’s collecting society, along with the performer’s consent, then presumably, the performer’s share should in principle be paid over by SAMPRA to SAMRO/POSA. SAMRO/POSA should then (after taking its cut) pay its member performer.