Performers’ Protection Amendment Bill: public hearings day 2

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Trade and Industry

14 September 2018
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The second day of the public hearings on the Performers’ Protection Bill began with a presentation by the Publishers’ Association of South Africa. The organisation proposed that the Bill should have its own exceptions and own provisions relating to Technological Protection Measures and rights management information and not be dependent on the terms of the Copyright Act. The Association also had two fundamental objections to the policy of Government prescription underlying the procedures to arrive at a fair and equitable remuneration: the undermining of the freedom of contract and the one-size-fits-all prescriptive approach.

Members asked if the Association had any suggestions to resolve the issue of contracts, bearing in mind the need to protect the more vulnerable performers.

The South African Broadcasting Commission got off on the wrong footing when it was discovered that the Head of Television, who had been expected to lead the delegation was not in attendance, nor was the CEO or other senior decision-making executives. Although the intention of the presentation was to make the Committee understand the impact of the Bill on the SABC, the presenters spent much of their allocated time defending the SABC against the allegations made by performers the previous day. The presenter declared that the industry had been highly appreciative when the SABC had begun commissioning work as producers had been unable to afford to tell their stories after the advent of democracy. Furthermore, performers had welcomed the very contract that they were currently complaining about when it was first introduced in 1997.

The presentation included an extensive review of repeat broadcasts and payment for such broadcasts to actors. It was noted that most commissioned drama programmes made marginal revenue and that continued repeat fees were not cost effective. The SABC asked for the deletion of the Notice of Intention to perform for various reasons, but mainly because it simply was not practical.

Members asked whether it would affect the SABC’s financial situation, if the SABC was forced to pay the additional post-production costs. Would the SABC be able to pay those monies? How was payment impacted by questions around solvency? A concern raised the previous day was that the SABC refused to tell the performers to which broadcasters the programmes had been sold. Why did the SABC refuse to release such information to the performers? It had become an arduous task for performers claiming royalties that were rightfully theirs. What was the SABC doing about that, and was the broadcaster going to correct that situation? Was it true that some performers were paid, but not others because they were ‘tedious’?

How did SABC regard the people that it utilised in a performance? Were they employees, workers, or contractors?  Did they get leave, medical aid, etc.?

The Chairperson and several Members of the Committee remained dissatisfied with the presentation of the SABC. The Chairperson finally informed Members that the CEO of SABC and the Head of SABCTV would requested to appear before the Committee, and, if need be, she would summons them.

 

South African Musical Performers Rights Association welcomed the amendment in 3(2) regarding the protection of performers’ moral rights. The Bill, however, left unclear the extent to which that right could be maintained after the death of a performer. Section 3A would risk serious harm to the South African record industry. There would not be significant investment by record companies if there was a 25 year limit on copyright and the companies might not be prepared to invest in things like videos that would promote the performer. Section 5 proposed transactional licensing which was a very onerous form of licensing that significantly increased the costs to administer the Needletime Right. It would not be physically nor financially possible.  The Association noted that equal sharing of royalties was not included in the Bill, and SAMPRA believed that sharing of needle time rights should be shared 50/50 between record companies and performers.

Members thought that the 20% administration fee was high. Who had regulated it? Was it government or was it a self-regulation?  What was SAMPRA’s views on the concept of one collecting society per set of rights? What did SAMPRA understand by equitable and how did the organization address the issue of disputes?

MultiChoice brought to the hearing a well-prepared team of senior executives from MultiChoice and MNet to make a very focussed and succinct presentation. The reliance in the Bill on the Beijing Treaty, although the Treaty had not yet been signed by South Africa, was a concern. MultiChoice had not yet done a cost analysis of the implications of the Treaty but was aware that the Treaty favoured UK and USA performers and therefore they cautioned against the finalization of those clauses before further investigation. MNet referred to the production complexity and highly collaborative approach of TV productions in which many performers make contributions at differing levels. He pointed out that there were principal actors but also performers who spoke only one or two lines in a production and yet others who were simply in crowd or street scenes. A blanket approach would not work. In terms of the TV Commissioning Value Chain, it had to be borne in mind that the broadcasters put up all funding and took all the risks involved in commissioning content and needed to recoup those costs from successful productions. Technological Protection Measures were very important to MNet. Piracy was one of the main ways in which performers’ rights were undermined. The CEO pleaded for direction and not prescription from government.

Members asked if MultiChoice had a sound system for managing records and paying people? Were the extras being paid? He asked for the views of MNet on the issue of retrospectivity. What were their views and recommendations? Could MNet also explain about equitable renumeration? What did MultiChoice understand by equitable and how did the organization address the issue of disputes?

The Recording Industry of South Africa welcomed the Government’s aims to bring the Copyright Act and Performers’ Protection Act in line with the World Intellectual Property Organisation Copyright Treaty, the Performances and Phonograms Treaty and the Beijing Treaty to ensure that performers and artists were fairly remunerated. However, the Performers’ Protection Amendment Bill was not compatible with the treaties and some provisions would cause serious harm to performers and producers. The 25-year limitation on the term of assignment of rights was a concern, as was the introduction of a sweeping United States-style fair use exception. Incomplete provisions on technical protection measures risked creating a legal haven for pirate services in South Africa. The changes were welcomed but specific details were not suitable for musicians. Lady Zamar added her view from a performer and record label holder’s perspective but the Chairperson suggested that she make a written submission and present at a future hearing.

 

The Independent Producers Organisation began by stating that film and television was a fragile industry that faced intense international competition, fragmenting audiences, dropping advertising revenues, a public broadcaster in perpetual crisis and a monopolistic broadcast environment. Most independent producers struggled to survive from year to year.

The definition of ‘Performers’ should not include ‘extras’ as it would be unsustainable to pay hundreds of people who filled in the background and did not even have a speaking role. ‘Prescribed contracts' suggested that government would determine various contractual elements. That was not feasible in a business where contracts were complex, and highly specific to each individual production. Clause 4 requiring one to notify performers ahead of a broadcast and to get their permission was not feasible. It would mean that any individual in the cast could hold the entire production to ransom.

Members asked for clarity in respect of the concerns about international treaties. Could presenters provide specific recommendations for aspects of the Bill that they disagreed with?

The Committee adopted the Report on the Study Tour to Germany to investigate the Fourth Industrial Revolution.

 

Meeting report

Opening remarks

The Chairperson indicated that the Committee would begin with the Study Tour Report on the Fourth Industrial Revolution.

Study Tour Report on the Fourth Industrial Revolution (German leg)

The Chairperson asked the Committee to consider the recommendations.

Mr D Macpherson (DA) noted that during the study tour meeting with BMW, the organisation had expressed its desire for the Automotive Industry Master Plan to be completed. The Director-General of the Department of Trade and Industry had said that the plan was 99% complete. A recommendation would, therefore, be that the Minister finalise the plan so that the investment with BMW could continue.

The Chairperson had two recommendations: Firstly, the critical role of ensuring the compact between industry, unions and the public sector in moving forward with the Fourth industrial Revolution; secondly, in taking the Fourth industrial Revolution forward, the Committee needed to consider working with other Portfolio Committees. It was not simply a Trade and Industry issue. It was also a Telecommunications, Economic Development, Small Business Development and Labour matter. In short, the Committee needed to work with other Portfolio Committees in that direction. In addition, the Committee had agreed to recommend that South Africa focussed on the importance of training and vocational training initiatives.

The Chairperson requested Committee staff to immediately finalise the report.

Oral Presentations

Mr D Mahlobo (ANC) suggested that PASA should present at the end of the day, if they were to present at all, as they should have been at the hearing the previous day.

The Chairperson explained that their flight had been cancelled the previous day and she, and every other parliamentarian, had been on the receiving end of that experience so she was allowing PASA to present, although their time would be limited.

Publishers’ Association of South Africa (PASA)

Mr Mpunka Radinku, Executive Director and Mr Colleen Dlamini, General Manager: Regulatory Affairs represented PASA.

The Chairperson stated that the Committee did not go through the Copyright Bill. She only wanted to hear about the Performers’ Protection Amendment Bill.

Mpunka Radinku explained that the Technological Protection Measures (TPM) impacted on the Performers’ Protection Amendment Bill.

Colleen Dlamini stated in terms of the TPM, the Performers’ Protection Amendment Bill should have its own exceptions and own provisions relating to TPM and rights management information and not be dependent on the terms of the Copyright Act. The socio-economic assessment report was disappointing and PASA felt that there was a need for independent and objective study to determine the impact of the Bill. PASA had two fundamental objections to the policy of Government prescription underlying the procedures to arrive at a fair and equitable remuneration: Undermining the freedom of contract was detrimental to both performers and producers, making it extremely difficult for producers to make investment decisions; and the one-size-fits-all prescriptive approach to regulating contracts between creative talent and producers across all copyright industries was a concern. Had it been researched and compared with other countries?

Discussion

The Chairperson recognised that PASA was referring to clause 5 which dealt with fixation, i.e. where a performance had been printed and copied.

Mr Mahlobo asked what PASA suggested the Committee should do when they expressed concern about undermining of the freedom of contracts when people had not entered into contracts, or had not entered into contracts on an equitable basis because they were vulnerable. How did one find the balance when it was morally wrong, even if legally correct? He also queried the socio-economic report that PASA was referring to.

Mr Dlamini explained that the socio-economic report was the one that had been commissioned for the Performers Protection Bill.

The Chairperson informed the Committee that the Department of Trade and Industry would present the report at a later stage.

Mr Radinku agreed that there should be protection for performers and artists. The Bill should use mechanisms to protect performers but when it over-rode the normal contractual arrangements between publisher and author; then it became a problem. Everyone had to get what was fairly due to them. Minimum requirements were a good idea but the Bill should not take away the flexibility of the contractual arrangements.

The Chairperson invited PASA to make further written submissions should the Association wish to do so.

South African Broadcasting Corporation (SABC)

Dr Mathapelo Matsaneng, Research and Policy, Intellectual Property Legal Advisor, and Ms Thando Shozi-Malanga, Head of Factual Genre and Acting Head of Content, represented the SABC.

The Chairperson was not comfortable with the representatives as she had been expecting the Head of Television. It was not acceptable to have a legal person presenting, especially as that was not what had been conveyed to the Committee. The Committee wanted to deal with the people who dealt with policy. The Committee would be writing to the SABC as it was unacceptable to send a delegation different from the one approved by the Committee.

Dr Matsaneng stated that it was her job to try and make the Committee understand the impact of the Bill on the SABC. The SABC acknowledged that the Bill was seeking to align to international treaties but the Bill had to be considerate of the effect of the proposed provisions on copyright owners in the context of commissioned works. The SABC also acknowledged that the balancing of rights was important in the redress of past socio-economic imbalances. The presentation dealt only with the proposed sections 3A, 3B and 5(1A) and the impact on the copyright owner, such as the public broadcaster.

Dr Matsaneng responded to some of the concerns raised the previous day. She explained that the SABC freelance contract spoken about by performers was not a SABC contract. That freelance contract had been drawn up between SABC and the Performers’ Organisation of South Africa Trust (POSA) in 1997. Performers were dying as paupers and were not making money at the time so the SABC had put itself in a relationship between performers and production houses. At the time, performers had agreed that the agreement had been a win for the industry. The contract gave performers certain working conditions. SABC had put in clause 5 and 7. Clause 5 related to repeat fees and clause 7 dealt with exploitation fees.  There had been a time limit before the repeat fees could be claimed, and such fees were only offered for drama productions. The SABC did pay exploitation fees at 2% of the exploitation licence. However, performers wanted more. SABC also paid exploitation fees for writers.

Mr S Mbuyane (ANC) stated that the presenter should adhere to the presentation and not give a response to the previous day.

Mr G Cachalia (DA) wanted to hear the SABC’s response as well as its views of the Bill.

Mr A Williams (ANC) stated that the Committee could not engage in a ‘he said she said’ scenario. He wanted to hear responses to the Bill.

The Chairperson asked the presenter to focus on the details relating to the Bill as the Committee was not holding an inquiry.

Dr Matsaneng proposed changes to two definitions: A Performer is defined as an actor, singer, musician, dancer or other person who acts, sings delivers, declaims, plays in, or otherwise performs, literary, musical or artistic works; and audio-visual fixations are cinematograph films, television programmes etc. The SABC did not agree that where there was a transfer/assignment of rights to the copyright owner (commissioned works), there should be a royalties option. The SABC also queried the practicality of making an assignment/ transfer of rights agreement valid for 25 years.

The presentation included an extensive review of repeat broadcasts and payment for such broadcasts to actors. It was noted that most commissioned drama programmes made marginal revenue and that continued repeat fees were not cost effective. The SABC asked for the deletion of the Notice of Intention to perform for various reasons, but mostly because it simply was not practical.

Discussion

Mr Macpherson linked his question to the very public implosion of the SABC finances. The SABC was basically bankrupt. How did the change in the way in which SABC had to interact with or contract performers impact on its financial position? Was Dr Matsaneng at liberty to indicate how, if the SABC was forced to pay the additional post-production costs, it would affect the SABC’s financial situation? Would the SABC be able to pay those monies?

Mr Williams informed the SABC that before them was the Performers’ Protection Bill and it was intended to redress both past and current injustices to performers. At the previous day’s hearings, the Committee had heard some things that were not at all good about the SABC. The performers did not get paid any royalties when programmes were sold on to other broadcasters. A concern raised the previous day was that the SABC refused to tell the performers to whom the programmes had been sold on to so the performers could not even claim from those companies directly. Why did the SABC refuse to release such information to the performers? He suggested to the Chairperson that perhaps the Committee should instruct the SABC to inform the performers whenever the programmes were sold on and to whom the programmes had been sold. That should happen every time a programme was sold. There was massive exploitation of performers taking place and the SABC was not helping with that.

The previous day the Committee had heard that the claims process was very arduous as if the process itself was intended to dissuade performers from claiming what was rightfully theirs. What was the SABC doing about that, and was the broadcaster going to correct that situation?

Mr Cachalia said that there were two separate issues. The first issue was around the enforcement and proper payment. The second issue was around the substantive issues of what governed, or should govern, payment. In terms of enforcement issues: Could the SABC pay? Did it pay timeously? How was payment impacted by questions around solvency? The questions might be moot given the state of insolvency at the broadcaster. The substantive issues were: assignment of rights, lump sum payments, repeat fees, and on-call licences. The SABC had raised a number of issues in that regard: time period, definition of a performer, multiple royalties, records that were lost or stolen. Whose fault was it if records were lost or stolen? Surely, it was the company’s fault.

In terms of some of the issues that Dr Matsaneng had raised, and her reference to the BBC, and a previous submission’s reference to a UK example which addressed those issues, how did those best-practice examples fit with her sense of what the Amendment Bill was proposing to do? He asked her to also answer the questions on enforcement.

Mr Mahlobo suggested that because a number of very serious issues had been raised relating to things that had happened in the past and continued to happen concerning the protection of performers, could those things be ring-fenced and then other Committees could join the Committee and call the SABC to come and account. The SABC could then send the relevant officials. He did not want to open up the enquiry at that stage.

He added that the financial viability of the SABC was an important matter. He informed Dr Matsaneng  that section 21(c ) of the Copyright Act (1978) was outdated and it was being amended because it was a piece of legislation made for a particular time with certain implications. Referencing that section was not helpful. Raising the issues of contractual law and Roman Dutch law was an important tool but could not be used with the assumption that people were on an equal footing. The reality was performers had been exploited to enter into contracts that were immoral and exploitative. It was problematic when such contracts were supposedly used to maximize benefits when the people were treated as if they were sub-human. Contracts could not dehumanise people. He viewed that in a dim light. The SABC had entered into contracts with the production houses and it had to concern the SABC when some of the concerns about those contracts came to light. Clauses could not be signed by parties that did not want to enter into an agreement.

On the question of payments, he wanted a yes or no answer to the allegations that some performers had been paid but others had not been paid because the people were considered tedious.

Mr Mbuyane had heard the presenter indicate that SABC was not funded by government. He requested clarity on that point. The definition of performer had been included in the principal Act. What did the SABC understand a performer to be? The SABC should brief Parliament in terms of the agreement signed with performers and outline the royalties disbursed to performers.

The Chairperson referred to the payment of repeat fees since 1996 to principal performers and writers in television dramas only. One could not have a show with only a principal actor unless it was a solo performance and she did not know of any sagas recently where there had been a solo performance. Some programmes stretched to thousands of actors because of crowd scenes. If the SABC only paid principal actors, what about the supporting actors? If only the principal performer was paid, the supporting actors were being paid only for the actual time that they had been working. They went in to work at 6 am and they could not leave. They had to remain there but they did not get repeat fees for perhaps having spent 16 hours on set that day and perhaps only working for half an hour. Did that prevail in all countries?

The principal Act was old. It was enacted in 1967. There had been no amendments. The SABC had made one or two proactive changes but in 1967, South Africa did not even have television. How did the SABC regard the people that it utilised in a performance? Were they employees, workers or contractors?  That was not clear. Did they get leave, medical aid, etc.?

She informed Members that the CEO of SABC would come or be summonsed to appear before the Committee, and the Head of SABCTV.

Dr Matsaneng apologised again for the absence of the Head SABCTV who was at a summit and she actually had had no intention of coming herself. There had been a miscommunication.

She responded to the question on the financial status of SABC. Repeat programmes did not make money. The repeats took place within a timeframe but fees did not come from the showing of repeats. The money was taken from somewhere else in the SABC. Certain programmes did make money, but those programmes bankrolled the cost of repeating other programmes. For example, ‘Generations’ was in season 26. It made money on the ‘eyeball’ in its first showing at 8pm when a lot of South Africans watched television. The advertising space made money as advertisers wanted to advertise when ‘Generations’ was showing and the majority of South Africans were watching TV. When it was repeated at a time during the day the viewing was low, and so advertisers paid very little.

Dr Matsaneng asked that her colleague to explain how money was made through programmes.

Ms Thando Shozi-Malanga, Head of Factual at SABC, explained that her division dealt with reality programmes, talk shows and reality programmes. Dramas were in a different section. Her mandate was not to generate revenue but to meet the requirements of ICASA. Drama generated revenue. The Bill suggested that performers would have to be paid for performances in factual programmes that were produced to meet the mandate but which did not make money. There were ways other than via commission to work with SABC, such as pre-sales, licences and so on. In 1994, people had not had opportunities to tell their own stories. The SABC had wanted to bring in voices of South Africans but the producers did not have the funds to realise their projects. The 1997 changes were welcomed by the industry because through 100% commission the SABC was able to give producers the money in advance to realise those projects.

The Chairperson asked the presenters to respond to the specific questions. The Committee was talking about the Bill and the Committee wanted answers about the SABC’s response to the Bill. Members had heard about the history of 1994 long enough. She gave them three minutes to respond.

Dr Matsaneng explained that SABC had paid for exploitation fees in certain cases where performers had come forward. In some instances, the SABC had disclosed where the programme had been sold overseas. The corporation had informed agencies that asked where shows had been licenced overseas so it was not true that the SABC did not share exploitation information with anyone else.

Ms Shozi-Malanga responded to the question of the funding of the SABC. The SABC generated 80% of its revenue from advertising, government contributed 3% to 4% and the rest came from TV licences.

Dr Matsaneng responded to Mr Cachalia’s question about whether the SABC could pay timeously. She assured him that the SABC could pay timeously, but there was a process. When it came to paying for repeat performances, but because of the lost records, the SABC was not always able to verify the claim. Where there were no records, SABC tried to negotiate but performers did not want to negotiate. Some had agreed to negotiate. She agreed that it was the SABC’s responsibility to retain the records, but as the situation was, the broadcaster tried to negotiate where there were no records.

The Chairperson intervened stating that the Committee had heard that not having records was a challenge, but the question was, what the SABC was proposing in the Bill.

Dr Matsaneng stated that the SABC proposed that the Committee should look at sections 3(a), 3(b) and 5(1A) which might impact negatively on the SABC or a broadcaster, especially in instances where it was expected to pay continuous royalties for the next 25 years. It was not practical. So much had been said about the SABC’s financial situation and what it had seen was that if the Bill was adopted, the SABC would have to pay for each and every programme, and not only drama productions. The point that a drama performance was not only dependent on principal actors, the broadcaster did take that into consideration but it was not affordable for SABC. It had been an industry decision that only the principal performers would be paid. It was not something that SABC had come up with on its own. It no longer suited the industry, which was why they were coming back to say that the SABC did not want to pay them. The SABC did pay where it could.

The Chairperson noted that the SABC was not taking the Committee forward. She declared that SABC was an important broadcaster in the country. It was very significant and she wanted the SABC to help with the Bill. She wanted the broadcaster to go through the Bill again, in the current environment, and to come back with a new written submission and to make an oral presentation. The engagement was taking the form of an inquiry and the Committee was not conducting an inquiry into the SABC. The Committee had an amendment and was trying to deal with legislation.

She would be making a note of Members’ questions. They could go to the Secretary with other questions that the Members felt should be covered on the return of the SABC.

The DA members objected to the ending of the discussion because they felt that their questions had been well answered and they had follow-up questions. They were disappointed not to conclude discussions.

The Chairperson was adamant that the SABC would have to come back again, with responses to the Bill. The Chairperson asked the Secretary to take all the questions that the Committee had, plus the ones that had been presented that morning and deal with them in the same way as the Committee did for all visitors where the Committee ran out of time or where the presenters were not prepared.

South African Musical Performers Rights Association (SAMPRA)

SAMPRA was represented by the CEO, Pfanani Lishivha and Ernie Smith, performer member and vice-Chairman of the SAMPRA Board.  Mr Lishivha explained that SAMPRA was a collecting management organization that collected Needletime Rights on behalf of its copyright owners and just over 4 700 record companies as well as more than 13 000 performers/recording artists. Royalties were split 50/50 between the performer and producer.

SAMPRA was a member of the Societies’ Council for the Collective Management of Performers’ Rights (SCAPR), an international association for the development of practical cooperation between Collecting Management Organisations that administered performers’ rights. SAMPRA was also a member of the International Federation of the Phonographic Industry (IFPI) for record companies.

SAMPRA’s main concerns with the Bill related to sections 3(2), 3A and 5. SAMPRA welcomed the amendment in 3(2) regarding the protection of performers’ moral rights. The Bill, however, left unclear the extent to which that right could be maintained after the death of a performer. Section 3A would risk serious harm to the South African record industry. There would not be significant investment by record companies if there was a 25-year limit on copyright and the companies might not be prepared to invest in things like videos etc. that would promote the performer. Section 5 proposed transactional licensing which was a very onerous form of licensing that significantly increased the costs to administer the Needletime Right. It would not be physically or financially possible. It should also be noted that record companies were not always paid for the use of a recording in the case of a promotion. In such cases, how could the record company pay the performer?

A prescribed written agreement would not work as not all performers were on the same level, especially established performers. Minimum requirements would be acceptable.

Equal sharing of royalties was not included in the Bill. SAMPRA believed that sharing of needle time rights should be shared 50/50 between record companies and performers.

The Chairperson informed the meeting that MultiChoice would present at that point and thereafter questions would be put to both organisations.

MULTICHOICE

Mr Nkateko Mabaso, the CEO of MNet, Mr Kwesi Tengenye, General Manager: Regulatory Affairs: MultiChoice and Ms Laura Kantor, General Manager: Regulatory Affairs: MNet, together with the regulatory and legal managers represented MultiChoice.

Mr Tengenye apologised for the absence of Ms Yolisa Phahle CEO, General Entertainment, who had flown to Cape Town the previous week when the proceedings had been cancelled. She was currently travelling overseas. In principle, MultiChoice supported the Bill. Multichoice would provide the Committee with a four-pager document with specific responses to the clauses in the Bill and proposals by MultiChoice.

Mr Tengenye referred to the reliance in the Bill on the Beijing Treaty although the Treaty had not yet been signed by South Africa. MultiChoice had not yet done a cost analysis of the implications of the Treaty but was aware that the Treaty favoured UK and USA performers and therefore they cautioned against the finalization of those clauses before further investigation.

It was suggested that things such as the definition of a performer be more specifically defined. That was dealt with in the written submissions in which specific recommendations were made.

The Chairperson appreciated the specificity of the submission.

Mr Mabaso referred to the production complexity and highly collaborative approach of TV productions in which many performers made contributions at differing levels. He referred to the fact there were principal actors but also performers who spoke only one or two lines in a production. A blanket approach would not work. MNET contracted with producers, and not directly with performers, who were contracted by the producer.

He referred to the TV Commissioning Value Chain and the risks involved in commissioning content as the broadcasters put up all the funding and took all the risk. There were also costs involved that were not always recouped. MNET had conducted some international benchmarking. In some countries the Rome Convention prevailed, but in the US and UK there was no statutory right to royalties for performers. In practice, the performers had won rights through strong actor guilds which negotiated collective bargaining contracts.

Ms Kantor stated that the definition of a performer was unworkable because ancillaries were not proper performers. MultiChoice supported the intent of a standardised contract but the contractual agreement could not be prescribed because the scope of performance contracts was too broad. The recommendation was that the Tribunal dealt with contracts that performers were not happy with.

It was proposed that section 5(2) of the existing Act should be retained as that was the logical approach. The proposal in the Bill added an enormous amount of red tape and MultiChoice was not sure that it would assist performers.

Technological Protection Measures were very important to MNET. Piracy was one of the main ways in which performers’ rights were undermined. The submission supported the proposed section 28P of the Copyright Act.

The CEO pleaded for direction and not prescription from government.

Discussion

Mr Cachalia thanked MNet for the presentation. He appreciated the brevity. It was well presented and made a lot of sense and echoed issues raised the previous day.

Mr Mahlobo welcomed the presentation on the TPM and the fact that MNet clearly supported the Bill. Certain people had shot down the Bill without indicating any support. The transitional arrangement was sound but it looked forward and did not address those performers who were currently in dire situations and whose dignity had been impugned. What timelines were being suggested for the transitional arrangements? How did one deal with reality as some of them were in old age and some were perishing, and the Committee could not look to the future and neglect the past. He noted that the presentation had raised the issue of the regulation of agreements where the terms of the contract were unfair, and presented a good principle because it addressed contract law and ensuring the rights of performers to fair remuneration. MultiChoice had to remember that the Committee was interested in redress. Did MultiChoice have a sound system for managing records and paying people?

Ms Theko noted that MNet had assisted the process by being very practical and presenting solutions to address the problematic issues. She noted the issues with the Beijing Treaty which the Committee would have to look at. Her concern was with the SABC but the Chairperson had made a ruling that they had to come back. She noted SAMPRA’s queries about the definition of a performer, i.e. who was who in the show? She noted the point about aligning the Bill with section 28 of the Copyright Bill. The industry had to work in hand in hand but the Bill had to make sure that their people received redress. The issue of retrospectivity had to be addressed and SABC had indicated that it was possible, at least since 1994. There had to be redress for their people who were crying. That was the main reason for the Bill.

Mr Mbuyane asked for SAMPRA’s views on the concept of one collecting society per set of rights and he needed more clarity on the unintended consequences that SAMPRA had alluded to. Could there be agreement on a standard contract which covered performers’ rights but with some level of flexibility to cover his argument that performers were not the same. He thought that the 20% administration fee was high. Who had regulated it? Was it government or was it a self-regulation?  Were the extras being paid? He asked for the views of MNet on the issue of retrospectivity. That was back pay in his language. What were their views and recommendations? Could MNet also explain about equitable remuneration?

The Chairperson informed the meeting that the Committee had taken a decision to do the Copyright Amendment Bill first but there had to be absolute alignment with the Performers’ Protection Amendment Bill. The Committee had completed 75% of the Copyright Amendment Bill and so was working on the Performers’ Protection Amendment Bill in order to ensure alignment before finalizing either Bill. She appreciated the specificity of the presentation, the clarity and numbering of slides.

The Chairperson noted that references had been made to prescribed contract agreements. Would there be a problem if the Bill spoke to the core issues or essential requirements, for example, that ten basic requirements that had to be in every contract. There was an issue around payment and the time period of 25 years. What did MultiChoice and SAMPRA understand by equitable and could both of them address the issue of disputes?

Mr Mabaso said that he had looked into the question of retro-specificity and a lot of work had been done, particularly in respect of the practical implementation.  MNet had met with senior counsel on that issue and the period of retro-specificity could not be open-ended. It might be necessary to look at a nuanced approach to the transitional period so that the organisation could put into place appropriate business processes. Some areas could be put into place straight away while other issues were resolved.

Mr Mabaso assured the Committee that MultiChoice definitely did pay. Where the organisation had had challenges, it made sure that it had engaged the relevant persons. There had been issues where there had been non-payment by some of the producers, but they had dealt with that very swiftly. MultiChoice preferred to pay for the exploitation of rights upfront as it made administration more efficient.

Ms Kantor stated addressed the question on transitional provisions and said MNet had proposed a transitional period of up to two years but it might not be an appropriate approach given the urgency. MNet had noted the approach taken in the Copyright Amendment Bill where certain sections of the Act would only come into effect when promulgated by the Minister and it might be appropriate to take a similar staggered approach. MNet had concerns about retrospectivity and had taken legal advice on retrospectivity as proposed in the Copyright Bill and would gladly make the opinion available to the Committee. On the issue of redress for contracts, MNet had a concern that it might be very difficult to work if they could only contract in one way. Instead of a prescribed approach, the organisation preferred the concept of guidelines and minimum stipulations and, where there were unfavourable contracts, that they be referred to the Copyright Tribunal.

Mr Lishivha was not opposed to the idea of one society per right; SAMPRA was worried about competition issues in that it might be regarded as uncompetitive. SAMPRA was also worried about freedom of association. If there was only one society per right, it would be good for the users, but what if the record companies or performers were not happy with the society? They would be stuck with that society. Should they not be able to form their own society if a society was not performing as it should?

DTI had published regulations as drafted by the Minister and which determined the threshold of 20% for the administration of collecting societies. Currently that only applied to Needletime Right societies. It was not self-regulation but government regulations.  

On the payment of extras, such as session musicians, the SAMPRA rules stated that every track had a featured performer/featured band, in whose name the recording was made. Secondly, there were non-featured performers or session musicians or backing vocalist, etc. The third category was the other feature performer, i.e. a guest artist. The royalty split was 50% to the record companies and 50% to the performers. The 50% for the performers was then viewed as 100% and was divided into 65% to featured performers and 35% to non-featured performers. A band with no guest artists or session musicians got the full 100% of the performers’ fee and it was divided amongst members of the band. The details of each track was captured and the IT system allocated the split accordingly. In that way, each person was correctly paid whenever royalties were paid out.

SAMPRA was not opposed to minimum standards or guidelines. SAMPRA was unclear why the assignment of rights was for 25 years.  If the intention was to protect the performer, amongst the unintended consequences could be unhappy performers. SAMPRA said that the current practices in the music industry should be observed, unless there was something very wrong.

The Chairperson asked for a set of proposals from SAMPRA. The Committee had heard why SAPMRA was unhappy, but they had not heard what the organisation proposed, which made it very difficult.

Mr Mahlobo requested that organisations, such as producers and collecting agencies, give the Committee a sense of how grave the situation was and, in writing, tell the Committee that how much was owed and how much was being disputed, and so on so that the Committee could have a sense of what it was dealing with it. What would they be doing about those payments that had not been resolved? His sympathies lay with the vulnerable and the matter had come to the representative of the people and everyone should become transparent while the representatives were dealing with it.

Adoption of Study Tour Report

The Chairperson read the recommendations attached to the report. She asked if there was there sufficient reference to labour. The four recommendations were read out and each one was approved by the Committee. The Study Tour Report was adopted with four recommendations.

The Chairperson person asked Mr Mahlobo to take the Chair briefly. He invited RISA to present and asked the team to refer only to the slides that dealt with sections of the Bill.

Recording Industry of South Africa (RISA)

Mr Nhlanhla Sibisi, CEO, RISA, informed the Committee that RISA believed that it was important that the voice of the performer be heard by the Committee and so they had invited Lady Zamar, performer and record label owner, to make a few comments during their presentation.

Musicians were always paid as were recording companies. Redress had to factor in the distinction between the actors and musicians. Music was issued on a blanket licence and what would happen if there was not an agreement by all after the 25 years?

RISA welcomed the Government’s aims to bring the Copyright Act and Performers’ Protection Act in line

with the WIPO Copyright Treaty, the Performances and Phonograms Treaty and the Beijing Treaty to ensure that performers and artists were fairly remunerated. However, the Performers’ Protection Amendment Bill was not compatible with the treaties and some provisions would cause serious harm to performers and producers. Recommendations were presented.

Rather than supporting performers, a number of the proposals would harm performers and producers alike, including the downgrading of exclusive rights to mere remuneration rights and subjecting them to a statutory licence regime. The 25-year limitation on the term of assignment of rights was a concern, as was the introduction of a sweeping United States-style fair use exception. Incomplete provisions on technical protection measures risked creating a legal haven for pirate services in South Africa. Concerning fair use versus fair dealings, where there were flexibilities, it opened the door to exploitation and one had to go to court and in South Africa, there were no punitive damages.

The changes were welcomed but certain specific details were not suitable for musicians.

Ms Banda, known as Lady Zamar, had taken a lot of time to learn about the industry and the contracts of performers. Standardised contracts would be a disservice to performers and record companies. Minimum standards would protect those that did not understand contracts so well.

There was a generalisation of what artists and performers were. They were individuals and were expressive and regulations had to take that into account. Developing artists were risks for record labels. Established artists almost guaranteed a profit.

If Lady Zama, or any performer, changed her style and approach to music, it would put the record label at risk. Bargaining of the contract for 25 years could be a problem. If a record label was restricted to 25 years, it was not enough to recoup the investment. Also, where did the artist go from there? The Bill should rather allow the 25 years to be a fixed period that did not have to end. Only performers who wanted to move on after 25 years would have to do that.

The Chairperson had returned and asked Lady Zamar to address the Bill.

Mr Mahlobo felt that Lady Zamar should make a written submission.

The CEO of RISA explained that he had asked her to talk about her experiences to give a musician’s voice but he agreed that she should do a written submission.

The Chairperson explained that the Committee would hold further hearings and more people would get a chance to present.

Independent Producers Organisation (IPO)

Mr Rudi van As, Board Member, IPO, informed the Committee that IPO represented over 80% of active film and television producers in South Africa creating TV shows for millions of South Africans, and films that travel the world.

He began by stating that film and television was a fragile industry that faced intense international competition, fragmenting audiences, dropping advertising revenues, a public broadcaster in perpetual crisis and a monopolistic broadcast environment. Most independent producers struggled to survive from year to year. Since 2008, inflation adjusted budgets for commissions from broadcasters had nearly halved. Regulation and policy should therefore aim to support the industry to deal with those challenges in order to create jobs, do business, bring in investment and drive exports.

The definition of ‘Performers’ should not include ‘extras’, the individuals who filled out city scenes in the background. Extras did not receive residuals anywhere in the world and, besides being an unsustainable financial burden, it would also be an unbearable administrative burden to co-ordinate payments to hundreds of individuals.

‘Prescribed contracts' suggested that government would determine various contractual elements. That was not feasible in a business where contracts were complex, and highly specific to each individual production because they were based on numerous variables of budget, territories, prominence of the performer, etc. and would be totally impractical.

Clause 4 requiring one to notify performers ahead of a broadcast and to get their permission was not feasible. It would mean that any individual in the cast could hold the entire production to ransom and demand unreasonable terms because that person could prevent the entire show from airing. This would also contradict the clause which provided for the transfer of the rights to the producer.

IPO supported the intentions of the Bill.

Discussion

Mr Macpherson found RISA’s presentation quite confusing. He was disconcerted to see that Lady Zamar had left before he could ask her about the rights existing for 25 years and going on for perpetuity – a contradictory statement. Did RISA support that? Surely it was either to be re-negotiated or be in perpetuity from commencement? Could RISA be clear about their view?

The Chairperson explained that Lady Zamar would be making a written submission and would present at another time.

Ms Theko suggested that the presenters should give specific proposals with the exact wording so that the Committee understood what was required.

The Chairperson noted that RISA had referred to investments and the value chain and the Beijing Treaty but she was not clear what was meant about the scope of protection: Section 2 of the Performers’ Protection Bill be amended to provide national treatment in respect of nationals of WTO, WPPT and Beijing contracting parties, as well as protecting the performances of nationals of other countries where the performances of South African performers were protected. She noted that South Africa had not yet signed the Beijing Treaty but she believed that there was every intention to sign it.

The Chairperson appreciated the information about the executive Committee and thought that it would be helpful to know how long the IPO had been in existence because IPO had made some very solid recommendations.

Mr Sibisi responded that RISA’s stance was that the 25 years rights clause be removed because RISA’s members entered into blanket contracts for music videos. What would happen to music videos after 25 years? On the issue of national treatment, RISA welcomed the intention to sign the treaties, but section 2 might be in conflict with those Treaties.

The Chairperson requested proposals from RISA, particularly in connection with section 5.

IPO was established in 2007.

The Chairperson noted that IPO believed that the definition of performers were too broad and would include anyone who walked past. IPO had proposed the definition in the Beijing Treaty. ‘We propose the legislation adopt the standard definition of performers as per the Beijing Treaty on Audio-visual Performances to bring it in line with global arrangements.’ Did RISA agree with that?

RISA fully supported the alignment with the Beijing Treaty.

The Chairperson stated that if anyone who was present, or was listening in, had anything critical that had not been covered in the one and a half days, it should be submitted in writing. Alternatives had to be given if something in the Bill was not acceptable or did not meet current requirements.

RISA wanted to remain with the current situation in respect of the rights issue.

The Chairperson noted that the Committee was amending a 1967 Act and so she would not except much of what was in the Bill to be relevant in the twenty-first century.

Closing Remarks

The Chairperson welcomed the DG of the Department of Arts and Culture. She thanked the other role players who had been there throughout, especially the DDG from DTI. In future, the Committee would invite other Departments and Portfolio Committees to participate in the processing of the Bill.

The Committee Programme was distributed to the Committee. There were no substantive changes but SABS would be accommodated on 28 November 2018 for a status report. There was some concern about the meetings on 3 and 4 October 2018 and not all Members would be available for the meetings. The Chairperson was concerned because the dates were not new dates and various entities had been requested to brief the Committee on those dates. It was ultimately decided that the next meeting would be held on Tuesday 9 October at 9am but that the Committee would sit until 9pm, if necessary, to catch up with the backlog of engagements.

The Chairperson thanked everyone for their attendance and participation.

The meeting was adjourned.

 

 

 

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