Getting your head around music rights

Getting your head around music rights

The collective management of music copyright in South Africa, although in place since the 1960s, remains a largely confusing space for both practitioners within the music industry and the public in general. In South Africa, we have six (yes six!) bodies that administer copyright royalties in the music industry, referred to as Collective Management Organisations (CMOs).

Two of these entities, namely SAMRO (Southern African Music Rights Organisation) and CAPASSO (Composers, Authors and Publishers Association), collect royalties related to composition; let’s call these the “upstream rights”. The other four CMOs, namely SAMPRA (South African Music Performance Rights Association), IMPRA (Independent Music Performance Rights Association), AIRCO (Association of Independent Record Companies) and RiSA (Recording Industry of South Africa), collect royalties for the sound recording, which I will refer to as “downstream rights”.

Why so many CMOs?

Although it may seem ideal to have one über CMO responsible for all copyright administration, one must understand that the different CMOs actually administer different rights in the copyright for completely different aspects of a song.

In fact, when you are listening to a recording of a song, there are two separate copyrights at play (copyright in the composition and copyright in the sound recording).

Both the copyright in the composition and copyright in the sound recording can be broken down further into individual rights.

“The Upstream Rights” - copyright in the composition

I’ve used the term “upstream rights” to describe the bundle of rights attached to the first or primary aspect of a song, which is composition. This is the initial copyright-protectable aspect of a song consisting of lyrics, the melody, arrangement and structure of the song.

The owners of this copyright are the composers (including lyricist, writer and possibly producer) and their publishers, if the composers have assigned their rights to a publisher.

The individual rights that make up the copyright bundle in the composition are administered differently by different people.

Most of the individual rights are administered on a case-by-case basis by the composers or publishers themselves (such as the “synch right”, which is the right to synchronise the composition to a visual), but there are two specific rights that are administered collectively by CMOs in South Africa.

The first right that is administered collectively is the right to reproduce the composition, commonly referred to as the “mechanical right”. This reproduction right is administered by CAPASSO which licenses and distributes royalties where compositions are reproduced, for instance, on CDs, digital download platforms or by a broadcaster. The second right in the composition that is administered collectively in South Africa is the public performance right, administered by SAMRO. This is the right to have the composition performed in public (as opposed to a private performance of a song, which does not require a licence).

“The Downstream Rights” - copyright in the sound recording

Once the composition is completed, the next step is to hit a music studio and record the song. This part of the process creates a second copyright and introduces a whole new set of players to the game.

Once the composition has been recorded, a master recording is created and this is ordinarily owned by the person who funded the recording, in most cases the record company.

The record company owns the master sound recording and the copyright in that recording, and will have control of the individual rights, eg reproduction, in a recording’s copyright.

Over and above the record label, the other people with a vested interest in the sound recording will be the performers (singers, instrumentalists, producers) who made the recording possible.

Unless the original composer is also a performer, they do not have any rights relating to the sound recording. Again, like in the composition, many of the rights in the sound recording are managed directly by the record labels themselves, eg reproduction of the recording for purposes of CDs or digital downloads.

The two rights in the sound recording that are managed collectively by CMOs in South Africa are the rights related to the broadcast of music videos (administered by RiSA and Airco) and the Needletime right (which benefits all the performers and the record label every time the sound recording is performed in public) which is administered collectively by SAMPRA and IMPRA.

Who gets paid and by whom? Putting the foundation in place

One of the most frustrating things for composers and performers is realising, down the line, that what they thought they would be entitled to from a royalty-earning perspective is not the case. Let’s start with the composer/publisher relationship.

The contract entered into between a composer and publisher outlines the services the publisher will provide to the composer - which include administration, marketing and liaison.

In return, the composer either gives up a portion of his copyright in the composition/s by way of assignment or the composer agrees to pay the publisher an administration fee levied for the administration of the rights in the composition. Understanding the mechanics of the contract and royalties payable to both the composer and publisher when income starts rolling in - from CMOs, CD sales, digital platforms, synch agreements etc - is key.

Composers are advised to seek legal guidance before signing any agreement in this regard.

Once the composer creates a composition, and specifically where they have collaborated with other composers, a document called a split-sheet is crucial in defining who owns what percentage of the song.

In the excitement of creating and collaborating, it is not uncommon for composers to walk away without agreeing to the ownership splits in the composition.

The result of this failure is that once the composition starts generating money at SAMRO or CAPASSO, disagreements on who owns the song arise.

It is important that you understand and agree to the artist royalties the record label will be paying you on sales, Needletime splits etc, and how any royalty advances will be set off.

It is also important to note that shifts in the industry have seen music companies rolling the publishing and record label contracts into one comprehensive “360 degree” contract.

How the royalties flow: A SAMRO perspective

SAMRO issues licences to broadcasters, live music venues and any other person or entity that plays music to what is defined as a “public” audience. Case law has found that a company playing music on its factory floor is deemed to playing music to the public. Generally, the licence is calculated on a percentage of income basis and obliges the licensee, as required by the Copyright Act, to report to Samro the songs (containing the compositions) played by the licensee and the number of times the songs were played. Once the report is received by SAMRO, all the songs played (including repeats) are compiled into one list and the total music duration tallied up. The total duration is then divided into the licence fee received from that licensee so that a rand/cent value per minute is calculated. The owners of the various compositions are then paid the total value of the minutes that their compositions were played on the basis of the ownership splits notified by them to Samro.

Written by Nothando Migogo - SAMRO CEO and orinigally published on The Sunday Independent.