Recording Industry of SA Presentation to parliamentary portfolio committee

RiSA Formed in mid 1970s as Association of South African Music Industries (ASAMI) Changed to Recording Industry of South Africa (RiSA) in 2000 Currently represents approximately 4000 independent record companies – many of which are self-releasing artists, and 3 multinational companies. Our members range from Kalawa, David Gresham, Gallo, Afrotainment to Sony, Warner and Universal Was instrumental in the re-introduction of the so-called “needletime” rights in 2002, and the Collecting Society Regulations in 2006 Organises the South African Music Awards which celebrates South African talent

RiSA Board Members Nhlanhla Sibisi Sipho Dlamini Sean Watson Tracy Fraser Jody Farber Thobela Dlamini Arthur Mafokate Nthuthuko Mdluli Major Kobese Andrew Mitchley Neil Greenberg Refiloe Ramogase Dharam Sewraj

Music Industry Value Chain

Internet Treaties - WCT and WPPT The international community, in the 1996 Diplomatic Conference, adopted the Wipo Copyright Treaty (WCT) and the WIPO Performances and Phonograms (WPPT) Treaties (Treaties) The purpose of the two treaties was to update and supplement the major existing WIPO treaties on copyright and related rights, primarily in order to respond to developments in technology and in the marketplace (our emphasis) It’s encouraging that the Copyright Amendment Bill also seeks to update our existing copyright regime, and, we hope, primarily in order to respond to developments in technology and in the marketplace We therefore welcome the DTI’s commitment to modernising our copyright law to make it a standard for the continent and to bring it into line with the provisions of the Copyright Treaty (“WCT”) and the WIPO Performances and Phonograms Treaty (“WPPT”).

Ratification However, we would like to highlight the importance of not only of updating the law to bring it into line with these Treaties, but taking the further step of ratifying them. Only then will South African creators reap the full rewards of their works being enjoyed globally Without ratification of the Treaties we will be left with half developed legislation which, in the long run, will…

Suffocate the industry

Changing business environment Global music sales rose 3.2% last year as digital music revenue surpassed those from all physical music formats for the first time This means that revenue from music consumption has moved from traditional physical products (CDs etc) to digital products (music downloads, streaming etc) As indicated earlier, the Copyright Amendment Bill seeks to respond to developments in technology and in the marketplace Unfortunately, some of the provisions of the Bill, as they relate to the recording industry, have deviated from WPPT in a significant way. And this will lead to the suffocation of the industry

Provisions Impacting negatively on RI Section 7 of the Bill – replacing Section 9(e) of the Copyright Act (Act) by combining the communication to the public and making available right; Section 8 of the Bill – amending Section 9A of the Act to : 1. downgrade the exclusive rights of communication to the public; 2. introduce sharing of royalties with users and other non-contributing and irrelevant parties; and downgrading of the making available right with suffocating consequences to the recording industry Section 21 of the Bill – amending Section 22(b)(3) of the Act by introducing a proviso which state that “assignment of copyright shall be valid for a period of 25 years from the date of agreement of such assignment”

Downgrading Communication right While it would have been great for the recording industry to have an exclusive right of communication to the public which is not downgraded to a right of remuneration, we concede that the WPPT, under Article 15, has made this right to be a right of remuneration

Sharing of royalties – senseless The proviso that: “the royalty payable for the use of a sound recording shall be divided equally between the copyright user, performer, owner, producer, author, collecting society, indigenous community, community trust or National Trust on the one hand and the performer on the other hand or between the recording company, user, performer, owner, producer, author, collecting society, indigenous community, community trust or National Trust” does not make sense and is not thought through. ROYALTIES MUST ONLY BE SHARED BETWEEN PERFORMER AND PRODUCER OF SOUND RECORDING

Limiting assignment to 21 years While it may be acceptable to limit the assignment of copyright by an owner to 25 years (or not more than 25 years – if that’s the intention), this will be impractical in relation to the performance embodied in the sound recording. With respect, the performance embodied in the sound recording should not be limited to 25 years while the copyright in the sound recording is 50 years.

Combining the Communication to the Public and Making Available Rights The proposed Section 9(e) provides an exclusive right of communicating the sound recording to the public, by wire or wireless means, including by means of internet access and the making of the sound recording available to the public in such a way that any member of the public may access the sound recording from a place and at a time chosen by that person, whether interactively or non-interactively However, these rights are then reduced to mere rights of remuneration under the proposed Section 9A. We concede that in relation to the communication right, this may be in line with WPPT but not in relation to the making available right. THERE IS NO OTHER COUNTRY IN THE WORLD WHICH HAS THIS RIGHT AS A REMUNERATION RIGHT OR SUBJECT TO EQUAL SHARING OF ROYALTIES

Making Available Right This right is fundamental for the dissemination of music over digital networks and for replacing the loss of revenue from physical sales. The international community, when crafting the WPPT, recognised that the dissemination of phonograms in digital networks such as the internet(and other mobile applications) constitutes a primary form of exploitation of music, and therefore should be subject to the control of the rights owner. Instead of combining the communication to the public with the making available right, the international community created separate rights under Articles 10 (performers’ exclusive making available right), 14 (RC’s exclusive making available right) and 15 (CTTP) of WPPT.

Art 10 of WPPT Performers shall enjoy the exclusive right of authorising the making available to the public of their performances fixed in phonograms, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them.

Art 14 of WPPT Producers of phonograms shall enjoy the exclusive right of authorising the making available to the public of their phonograms, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them

Art 15 of WPPT Performers and producers of phonograms shall enjoy the right to a single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any communication to the public

Article 10 of WCT – Songwriters The drafters of the Bill confused the rights under WCT relating to composers with the rights of performers and producers under WPPT. Art 10 of WCT states: “Without prejudice to the provisions of Articles 11(1) (ii), 11bis(1)(i) and (ii), 11ter(1) (ii), 14(1)(ii) and 14bis(1) of the Berne Convention, authors of literary and artistic works shall enjoy the exclusive right of authorising any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them” This, we think, is were the confusion arouse – confusing the rights of composers under WCT with those of performers and producers of sound recording under in WPPT. This must be corrected to avoid suffocating the industry.

Effect of confusing WCT and WPPT The international community understood that in respect of performers and producers of sound recordings, the making available right must be exclusive and separate from the right of communication to the public. The latter was made a remuneration right while the former was made exclusive. This is what we request Parliament to do. By combining the two rights, the drafters of the Bill failed to appreciate the crippling impact this will certainly have on the SA recording industry.

Our Proposal: We urge Parliament to: amend the Bill so that the making available right is separate from the communication to the public right. In this regard, we propose a new Section 9(b)(A) which will provide as follows: “Producers of phonograms shall enjoy the exclusive right of authorising the making available to the public of their phonograms, by wire or wireless means, in such a way that members of the public may access them from a place and at a time individually chosen by them”; Limit the sharing of needletime royalties under section 9A to performers and producers of phonograms; and Delete the proviso to Section 22(b)(3) which limits the assignment to 25 years.

Investment by RI

Copyright Alliance and IFPI As indicated in our written submissions, we fully support their submissions especially on, among others, Fair Use. We believe that there is no place in our law for fair use as it creates uncertainty.