UPDATE ABOUT COLLECTIONS AND DISTRIBUTION.

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Dear IMPRA member,

UPDATE ABOUT COLLECTIONS AND DISTRIBUTION.

INTRODUCTION

1. It has come to the IMPRA Board’s attention that SAMPRA recently issued a notice
purporting to set out facts and circumstances surrounding the payment of
needletime royalties by SABC. IMPRA does not intend to pre-empt any litigation
that may be instituted by SAMPRA in this regard but finds it necessary to set the
record straight by addressing some of SAMPRA’s allegations, and also detailing
SAMPRA’s general conduct in the administration of needletime royalties.

COMMUNICATING TO THE PUBLIC ROYALTY COLLECTIONS

2. IMPRA was accredited by CIPC after SAMPRA was accredited. When SAMPRA
collected royalties for the use of sound recordings from the retail sector after the
accreditation of IMPRA, SAMPRA purported to also collect for non-SAMPRA
members, alternatively, that it is/was legally competent to collect for all sound
recording repertoire used by music users. Based on this misrepresentation of its
repertoire, SAMPRA has to surrender that portion of royalties collected that is
attributable to the use of IMPRA repertoire, as some of the repertoire purportedly
licensed by SAMPRA since IMPRA’s accreditation, belonged to IMPRA members.
IMPRA cannot, as a matter of law, demand another payment of a royalty from
music users that have already paid SAMPRA for the use of IMPRA repertoire. Such
music users are deemed to have discharged their obligations for payment of
needletime royalty.

3. IMPRA attempted to engage with SAMPRA to resolve this issue. SAMPRA insists that
it only collected for its members. However, SAMPRA persists with its erroneous
claim, in writing, to music users, informing them that it represents “99,99%” of repertoire. SAMPRA argues that it has no mandate to collect for non-members of
SAMPRA, hence its insistence that whatever it collected belongs only to SAMPRA
members – thereby excluding IMPRA and others from royalties collected from
commercial users of music.

4. IMPRA has found in various meetings with commercial users of music sound
recordings, that they labour under an impression that they have discharged all
their needletime obligations by paying SAMPRA. IMPRA continues to engage with
commercial users of music sound recordings to correct this perception.

5. In view of the challenges created by SAMPRA’s conduct, IMPRA has travelled the
length and breadth of the country to manually collect mandates from its members
to improve its database. IMPRA has furthermore submitted a formal complaint with
CIPC in connection with SAMPRA’s conduct in communicating misleading
information to users, i.e. that SAMPRA represents “99.99%” of the repertoire
utilized by music users.

COLLECTIONS FROM SABC

6. As a result of various engagements (dating back to 2016), between SABC on the one
hand and IMPRA and SAMPRA on the other, the SABC provided both Collecting
Societies with the following information, to calculate the Societies’ relative shares
of needletime royalties:
1. Music usage reports for the period 2014/2015 for 18 SABC radio stations;
and
2. Reports for each of the said 18 radio stations reflecting relative
percentages of music played, versus e.g. adverts, news, sports and
traffic.
7. The SABC hosted both Collecting Societies in a joint meeting to discuss the process
to be followed in apportioning royalties between the two Collecting Societies. The
SABC requested both Collecting Societies to submit their respective repertoires and membership lists, in order to assist SABC with determining the royalty share-split
between IMPRA and SAMPRA.

8. The SABC received the respective repertoire lists of SAMPRA and IMPRA, and the
SABC provided SAMPRA and IMPRA with Music usage reports for the period
2014/2015.

9. The SABC employed a SQL Database to track particular spins (songs) relating to a
particular artist and record company, and as administered by a particular collecting
society. The SQL database was used to manage and separate data comprising of the
artists, titles (songs), record companies and collecting societies.

10. Spreadsheets of the net revenue of the SABC per station as approved by SABC
accountants were supplied. (The net revenue per station were extracted from SABC
SAP System which was audited by AGSA. The spreadsheet provided reflected the
net broadcasting revenues (as defined in the Supreme Court of Appeal ruling on the
rate for needletime royalties for commercial radio stations), of all the various
radio stations.

11. Instances of dual membership in both Collecting Societies were identified. Dual
membership queries were resolved by SABC in consultation with both Collecting
Societies, resulting in a consolidated list. The Collecting Societies in the
consolidated list had previously identified which artist are affiliated to them in
cases of dual membership. Once the spins were calculated for the artists who
appeared to have dual membership, they were allocated to the correct Collecting
Society. A consolidated list of the dual members was sent by SAMPRA to SABC on
behalf of IMPRA and SAMPRA.

THE MEETING ON 14 NOVEMBER 2017

12. On completion of the recalculation of the royalty allocation, the SABC met with
SAMPRA and IMPRA on 14 November 2017 to explain the method informing the
calculation of the 2014/2015 royalty split. The SABC used the following information
from the two societies to assist the SABC in its assessment of the split:

1. Repertoire from SAMPRA;

2. SABC Analysis of 2014/2015 from SAMPRA;
3. Membership Main Master List from IMPRA;
4. Claimed Membership from 2014 and Authenticated Mandates from
IMPRA; and
5. information in line with the SABC generated music usage reports for the 18 radio
stations.
13. The findings/results of the SABC after running the spins or counts were that:
13.1 IMPRA Repertoire constituted 75% of the 2014/2015 music usage report of the
SABC; and
13.2 SAMPRA Repertoire constituted 25% of the 2014/2015 music usage report of the
SABC.
14. The SAMPRA delegation rejected the outcomes and left the meeting.
15. IMPRA invoiced the SABC on a non-VAT basis for the payment of R16, 955 955.44
based on the SABC analysis.
16. It is not known whether SAMPRA ever invoiced SABC in this matter.

ARBITRATION

17. It is alleged in the recent SAMPRA statement that “(i)n November (2019), IMPRA
refuses to sign the arbitration document”.
18. IMPRA’s unwillingness to sign the said arbitration agreement was informed by the
fact that the manner in which the dispute was defined by SAMPRA, did not
succinctly address the question of the percentage of SABC needletime royalties
that should be paid to IMPRA and SAMPRA respectively. IMPRA had proposed
alternative wording to better define the issues, but this was not accepted by
SAMPRA.

19.CONCLUSION

20. The IMPRA Board finds it regrettable that there appears to be an unwillingness to
find common ground in addressing needletime royalties payable by music users who
use both IMPRA and SAMPRA repertoire, and trust that common sense will prevail.

Yours sincerely,
The IMPRA Office
Exec Director.
Dated 13th March 2020

(To view the original document please click on the link below to download or preview.)

re Dear Member IMPRA 13 MARCH 2020

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