Needletime royalties

It is an agreed maximum allowance of time for broadcasting recorded music. 

It is also referred to as “pay for play”. The term refers to the calculation, collection and distribution of royalties to the performers and owners of the recording of public performances of an artist.

This can vary in terms of the Copyright Act, Contractual Agreements between the artists and the record labels. 

We at Licence Solutions want to assist Artists to obtain royalties to which they are rightfully entitled. 

We have studied the dense legal framework that we can pursue on behalf of artists to obtain their royalties. We have also identified the obstacles that usually impede this process

The main objective of needletime is to fairly remunerate and recognize the musician, producer or owner of the recording copyright for their contributions to the recording. This is desirable, because it can only help to build a healthier South African music industry. However, this cannot be done without an additional license fee. Therefore, we at License Solutions assist in the issues at hand to ensure that artists obtain what is rightfully theirs without straining their pocket. 

Auditor’s Responsibility 

Non-compliance with the provisions of the Copyright Act exposes music users to the risk of litigation. The obligation to pay a royalty is a statutory obligation. All accountants and auditors, as well as trainees, are urged to ensure compliance by clients that are music users and need to ensure that these obligations are provided for in their clients’ financial statements in accordance with International Auditing Standards. 

South African businesses have become accustomed to making payment of a license fee to the Southern African Music Rights Organisation (SAMRO). There is no connection whatsoever between SAMRO and SAMPRA. When you pay SAMRO you pay a royalty that is intended to go to the composer of each song you play. When you pay SAMPRA, you pay a royalty that goes to the artist that performs the song and to the record company that has invested in making the specific song.  

How does Needletime fit into the existing landscape?

Now that we have understood what the new needletime legislation says, let’s go back and place it within the context of the industry, the royalty collection societies and to the other royalties that are already payable:

Performance Royalties:

These publishing royalties are SAMRO’s primary function, and have been for many decades. Modern methods of communication like radio and TV broadcasting can use a single recording to entertain an audience of thousands or even millions. This considerably limits the sales of recordings, and therefore the sales royalties earned. As a result of these developments, for many composers, the principal source of livelihood today is the performing right royalty, which is a fee payable to the composer by anyone who performs his/her music in public. 

When a composer/artist becomes a member of SAMRO, he must assign to SAMRO the performing, broadcasting and diffusion rights in all his works. SAMRO issues blanket licenses to music-users throughout its territory - banks, broadcasters, cafés, concert promoters, hotel proprietors, retail stores, night clubs, restaurant owners and others – to perform any music of its members against payment of proper fees. SAMRO also has Agreements of Reciprocal Representation with similar organizations in more than 100 countries throughout the world, with which it remains in continuous contact. It authorizes those organizations to administer the rights of its members in their respective countries, and, conversely, they authorize SAMRO to administer the rights of their members in Southern Africa.

SAMRO has an active body of Licensing Representatives who visit all establishments in which music is likely to be performed in some manner or other, whereby it is ensured that all such performances are properly licensed and that the appropriate fees are regularly paid to SAMRO for subsequent computation of royalties and distribution to its members and affiliated societies. Thus far, the overlaps seem large, and it is no surprise that SAMRO has formally expressed its intention to administer needletime. 

Mechanical Royalties: 

A mechanical right is implemented when a musical project is reproduced from one format to another.  This has become popular in our day and age where an artist can supply their masterpieces to different platforms. This makes it convenient for all different classes and ages. The different forms range from CD’s to MP3’s and is not limited to other platforms. 

Mechanical Rights (also known as reproduction rights) is another way for music creators and authors (composers and lyricists) to earn money from their creative output.  The creator of the music can authorise an organisation such as SAMRO (or a music publisher) to administer the Mechanical Rights in his/her works. SAMRO will then license and collect licence fees from music users, which will later be distributed to members in the form of royalties. 

These users include TV and radio broadcasters, production houses, advertising agencies, DJs (who make copies, cover versions and compilation CDs), record companies and digital service providers that make music accessible via the internet, cellphones (ringtones and downloads), and other technological media (e.g. iPods).  Note if your work is reproduced via a recording, you will receive royalties in the form of annual distributions.