Paying royalties to play music in public- but to whom do you pay the dues?
FASA’s help-line received an interesting inquiry on paying royalties for playing music in public places as there seem to be two different collecting societies claiming
Question
Both SAMRO and SAMPRA appear to be invoicing franchised outlets that play music in their outlets.
– SAMRO is a copyright administration business dealing with primarily the administration of music composers’ and authors’ Performing Rights.
– SAMPRA is a collective licensing society of copyright owners of music sound recordings.
How would a franchise owner verify the collecting society’s legitimacy and should the business pay both these organizations?
Answer
If a restaurant or other venue broadcast recorded music in such a way that it is audible to members of the public in or around the venue, it will be obliged to pay royalties to the owner of the copyright in the sound recording concerned. If the copyright owner is a member of a collecting society (such as SAMRO or SAMPRA), and has appointed the collecting society to administer its rights to receive payment of royalties, the royalties are to be paid to the collecting society, which is then obliged to distribute the royalties to the copyright owner (less any fees or charges that it may be entitled to deduct in terms of agreement regulating the copyright owner’s membership of the society).
Far-reaching amendments to the Copyright Act were passed by the National Assembly in December 2018 and approved by the National Council of Provinces in March 2019. Some of the amendments relate to the establishment, powers, and functions of collecting societies. The amendments have not yet been brought into effect, partly because the US has indicated that it will be reviewing its trade relations with South Africa if certain of the amendments (although not those relating to collecting societies) are brought into effect.
In terms of the Collecting Society Regulations in terms of the Copyright Act, in order to be permitted to act as a collecting society, a person or body must apply for and receive accreditation from the Registrar of Copyright at the Companies and Intellectual Property Commission. Franchisors and franchisees could, therefore, ask the person or body concerned for proof of accreditation and/or verify it with the Registrar.
There are different parties involved in the creation and distribution of a sound recording, from the original composer/s, through the performers, to the record company responsible for recording the performance, and for marketing and distributing the sound recording. Each of these parties may be represented by a different collecting society and each of them may be entitled to some, or all, of the royalties. This will depend on the contracts between them, and their respective collecting societies.
A venue owner who is faced with competing demands by different collecting societies may ask for copies of these contracts to satisfy itself as to what its obligations to each party are.
For further information contact Ian Jacobsburg on ij@tabacks.com or visit Tabacks website
Ian is a practicing attorney with over thirty years’ post-admission experience in the areas of competition, consumer and commercial regulatory law as well as corporate, commercial and other business-related law. His expertise and experience includes data protection and processing, mergers, acquisitions and sales of business, competition law, economic regulation (including international trade, data protection, life sciences, food and beverage and consumer law), commercial exploitation of intellectual property, franchising and licensing. He is recognised as one of the leading practitioners in South Africa in the field of franchise law, and has served as an executive committee member of the franchise association of South Africa for several years, and as its chairman in 2014/15. Ian enjoys working with entrepreneurs and innovators and finds the problem-solving aspects of legal practice especially fulfilling.
