1 Let’s keep this simple! Here’s the basic formula that describes the current contribution of RISA’s members to the oligopolistic and highly lucrative radio advertising revenue pie that the SABC and other members of the National Association of Broadcasters control.

2 RiSA Member’s output of sound recordings = 30 billion hours of radio entertainment for consumers = 3,6 trillion units of 30 seconds of saleable time for broadcasters = R2 billion radio advertising revenue for broadcasters (2006) = ZERO revenue for record companies and performers = HOW MUCH Revenue for record companies and performers in future? Copyright Tribunal referral

3 Commercial Music Radio Commercial music radio has been growing its advertising revenues at a significantly faster rate than the national economic growth. All radio stations that are essentially music stations – commercial or PBS – show the same basic revenue growth trends.

4 Watch the curve ! Have a look at the increase in advertising revenue of commercial music radio stations over the past eight years – going back to the time at which the music industry was united in its call for needletime – and when the SABC and the NAB declined to participate in the DAC’s Music Industry Task Team. Lets start with some independent commercial music stations.

*Note the growth between 1999 and 2006 – from R112m to R286m. Advertising revenue in Rm

6 Jacaranda *Note: R112m in 2000 – and R274m in 2006 Advertising revenue in Rm

7 East Coast *Note: from R90m in 2000 to R243m in Advertising revenue in Rm

8 Now let’s look at SABC’s commercial stations…

9 Metro *Note: from R89m in 1999 to R234m in Advertising revenue in Rm

10 5FM *Note: from R81m in 1999 to R165m in Advertising revenue in Rm

11 SABC’s PBS stations have reflected the same growth patterns.

12 Umhlobo Wenene *Note: from R34,2m in 1999 to R112m in Advertising revenue in Rm

13 Ukhozi *Note: from R84,1m in 1999 to R191m in Advertising revenue in Rm

14 Thobela *Note: from R20,8m in 1999 to R62m in Advertising revenue in Rm

15 Motsweding *Note: from R21,6m in 1999 to R62m in Advertising revenue in Rm

16 Lesedi *Note: from R32,1m in 1999 to R103m in Advertising revenue in Rm

17 What about radio stations that are not music stations? The same trends do not characterise the growth of non-music stations.

18 SAfm *Note: from R16m in 1999 to R29m in Advertising revenue in Rm

19 And compare an all-talk station – which had exactly the same advertising revenue in 2006 as it had in 1997.

*Note: R57m in 1997… and R57m in 2006 Advertising revenue in Rm

21 Let’s look at some other non- SABC commercial music radio stations. The trends is exactly the same.

22 YFM Advertising revenue in Rm *Note: from R33m in 2000 to R126m in 2006

23 KFM Advertising revenue in Rm *Note: from R48m in 1999 to R144m in 2006

24 Algoa Advertising revenue in Rm *Note: from R23,2m in 1999 to R53m in 2006

25 OFM Advertising revenue in Rm *Note: from R25m in 1999 to R50m in 2006

26 RiSA Member’s output of sound recordings = 30 billion hours of radio entertainment for consumers = 3,6 trillion units of 30 seconds of saleable time for broadcasters = R2 billion radio advertising revenue for broadcasters (2006) = ZERO revenue for record companies and performers = HOW MUCH Revenue for record companies and performers in future? Copyright Tribunal referral

27 Radio Station’s revenue ___________________ 10 SAMPRA FORMULA X Music __________________ All Editorial Content Needletime: Plus 2,5% for mechanical transfer license (optional at instance of station).

28 SAMPRA FORMULA – Example Station’s advertising revenue = R200m ______ 8 = R25mx Music owned / controlled by SAMPRA members __________ All Editorial Content = 60 ___ 100 = R15m Needletime and mechanical transfer license royalty per annum.

29 Copyright Tribunal Based on a string of previous statements by SABC and NAB, SAMPRA does not believe that there is a sensible or realistic prospect of negotiating an agreed tariff with broadcasters. SAMPRA therefore intends to refer the tariff to the Copyright Tribunal as soon as possible.

30 Arrear Claims  SAMPRA intends to institute a High Court action on behalf of owners against commercial broadcasters for needletime royalties retrospective to the introduction of legislation in June 2002.

31 Arrear Claims  SAMPRA intends to lobby for South African performers only to be compensated for the period 1965 – May 2002 in order to create a statutorily controlled social security fund for performers.  What amount would be appropriate for 37 years of free music usage by SABC of the totality of South African musicians recorded output?

32 Arrear Claims for performers only  SAMPRA will lobby for an injection of R200m by SABC and government, jointly, to create a viable fund that will kick-start social security for artists, based on their contributions to airplay, giving them a monthly allowance, some measure of medical cover and a funeral scheme as fair compensation for nearly four decades of free usage of their music by SABC.  © Keith Lister 2007