EPISODE 8 Music Rights

Internet Tony is the founder of Music Business Intelligence, a beat maker and producer. As a young man he is proving that it is possible to make a career out of music.

Module 8: PRE TASK

At the heart of the music business is a great song or that piece of music that goes deeper to a point that connects.It takes one song to change your life.

There are about 50 000 new songs written each and every day around the world. If you don’t have one recording of one song that is a hit you can’t go eat the big pie in the music game. Each song is Intellectual Property. It is like “land” and develops rental income to its owners every time it is performed or reproduced.

All authorship and ownership claims, the splits and other metadata is stored on a CIS-net database controlled by the International confederation of Societies of Authors and Composers (CISAC). CISAC has 239 member CMOs (collective management organization) across 123 countries.The global industry collects approximately 10 billion Euro’s per year.

Each country has their own industry to accommodate the registering, monitoring and collection on these rights.

Registering and Collecting

You assign an ISRC (International Standard Recording Code) and ISWC (International Standard Musical Work Code), a global reference standard for identifying musical works;to your copyrights.

There are 4 main Collecting Management Organisations (CMOs) in South Africa collecting on 4 main music rights.

A performance rights CMO issues licences to users of public performance, broadcast and transmission through diffusion services rights. IN South Africa it is South African Music Rights Organisation (SAMRO).

The reproduction right, also known as the mechanical right includes the printing of a disk for usage and or resale and the copying of music into a database for the purpose of streaming. IN South Africa it is Composers Authors & Publishers Association(CAPASSO)

The sound recording communication to the public rights are also known as needle-time rights and including licenses to radio and TV broadcasters, retailers, banks, shopping malls, sport stadiums, restaurants and venues of various descriptions when they communicate a sound recording to the public.IN South Africa it is a South African Music Performance Association (SAMPRA).

Public performance rights in cinematographic films are the rights to licence music videos. IN South Africa it is RiSA Audio Visual (RAV) that does the licencing of these rights.

Now answer these questions

1. ISRC and ISWC are both unique identifier’s for music. Can you state the difference in name? Do you know what this difference means?

2. Copyright owners (authors and entrepreneurs) are entitled to five copyrights: reproduction; adaptation; broadcast; performance; and communication. There are different intermediaries for obtaining licences to these rights. Intermediaries are called CMOs standing for Central Management Organisations.
Every time a song is played the songwriter is due a royalty. Every time a song is played the owner of the sound recording as well as the performers are due a royalty. Every time a song is reproduced for resale, the authors and publishers are due a royalty. Every time a music video is played or licenced to film the authors and publishers are due a royalty.
Do you know which of the CMOs you should register with to collect each of the above rights?

3. Some CMOs represent the rights of COMPOSERS AND AUTHORS, whilst other CMOs represent the rights of the SOUND RECORDING and therefore the LABELS AND PERFORMERS.
Of the four CMOs mentioned above can you indicate which represent composers and authors and which represent labels and performers?

4. There are benefits of registering your copyrights. You have copyright from the moment of registration and the term of copyright lasts for the life of the author plus 70 years after your death. In your opinion what are the benefits of registering your copyright and what are the pitfalls for those that don’t? Can you find any examples of musicians or composers who have had to go the legal route in order to get their rightful copyright dues?

Know-how is a key to knowing and protecting your rights to musical copyright.

Module 8 POST TASK

The shortest distance between two points is a straight line. Copyright exists from the moment you create something that is original in a fixed and tangible medium of expression. In the music business this is in sheet music, sound recording, and or video. Copyright protects your expression it doesn’t protect an idea.

There are two types of copyright works –authorial works which belong to the creator (such as a song writer) and entrepreneurial works which belong to the investor (such as an executive producer).

You have copyright from the moment of registration. The term of copyright how long it lasts is the life of the author plus 70 years after your death.

Copyrights first arose in 1454 with the Gutenberg press, which added a reproduction value metrics to performance. These two value metrics underpinned the music industry up until the digital age. Two basic types of copyright law developed. The common law copyright regime arose from the English statute of Anne in 1710, which England exported to all its colonies and protectorates, including America. This favoured capital as opposed to creativity. The Europeans, led by the German and French and their respective colonies and protectorates, adopted a civil law copyright regime which placed creativity before capital. South Africa used the British Imperial copyright act verbatim from 1916 – 1965. A new Copyright Act was introduced in 1978.

Up until the invention of the internet, the value metrics used was number of copies.This remained intact from the printing press, acetates, vinyl's, 4 tracks to 8, 16, cassettes and CDs.

However, the digital age added a third plane to copyright – DATA. where intellectual property became communicated and traded in data. With digital having destroyed the record industry and with lockdown destroying the live music industry it is crucial for a young musician to know the value of their copyright and how to earn from it.

Digitisation and the internet have changed the landscape significantly, where we see the rise of the knowledge based company. By 2020, the biggest retailer in the world was an APP driven company, the biggest hotel company was an APP driven company, the biggest media company was an APP driven company.

Some of the biggest music distributors are streaming services. Streaming services negotiate the value of your intellectual property on the basis of a share in advertising revenue with brand developers and data miners also playing important roles in the monetisation of music.

Challenges in the Music Rights industry

A Collecting Management Organisations (CMO) takes assignment of an author’s rights which results in a loss of ownership to the author. A primary role of the CMOs are to licence the author’s rights. A major challenge to the music rights industry is under-licencing and under-licencing results in in under-collecting. SAMRO for example only collects 15% of its potential market.

An accurate and transparent payment of music rights to the rightsholder relies on accurate data management and monitoring. Broadcasters provide playlists to CMOs. Composers and authors utilise theglobal database called CIS-net, whilst sound recordings utilise the ISRC and other Shazam like monitoring organisations. All these monitoring databases are inaccessible to the DTI, SARS and the Reserve Bank which has raised the call for an Intellectual Property deeds office.

With our terrible history of political corruption, South Africa is one of the last territories to adopt a transparent, self-empowering, honest and accountable approach to music rights. South Africa has a combination of historical legacy practices, undocumented works, wholesale negotiations of South African copyrights as well as a poor Copyright law which have continued to make it very difficult for the individual copyright owner to earn well off their work.

Market share describes the share of the income of the music market. In South Africa the three multi-nationals, Sony, Warner, Universal and a handful of independents including Kobalt and BMG control 85% of the market share. This dominant position has made it very difficult for independent or individual practitioners to break into the market.

Now answer the following questions

1. One means of breaking into the market is through marketing. Some marketing techniques include “building a brand,” “knowing your audience,” developing a “content marketing strategy,” and making “social media success.”
You have to care about your customer and use marketing to tell them how to find your product. But the only way to compete in the competitive music market is to have a product that the audience want to buy.
Of all your skills, ideas and visions for your career, what do you think it is that is absolutely unique and will break through and touch your audience so deeply that they will want to buy it? Describe it for us.

2. Know how and knowing your rights is extremely important in the music industry. Know how sits between knowledge, skills and training and qulaification.
Now, there are two unique identifiers currently in use to monitor our musical copyrights. These are:
ISRC = International Standard Recording Code;
ISWC = International Standard Musical Work Code;
These unique identifiers are supplied by the following organisations:
CISAC = International Confederation Of Authors And Composers;
RISA = Recording Industry Of South Africa;
IFPI = International Federation Of Phonographic Industries;
Now, can you describe the difference between an ISRC and an ISWC and which organisations supply which code?

3. All copyright owners are entitled to five copyrights - reproduction, adaptation, broadcast, performance and communication. There are different intermediaries for obtaining licences to these rights.
SAMRO = South African Music Rights Organisation;
SAMPRA = South African Music Performance Rights Organisation; CAPASSO = Composers Authors And Publishers Association,
RAV = Risa Audio Visual
Take these acronyms and highlight the ones you would like to be a member of. Why have you chosen these organisations specifically?

4. These 4 CMOs in South Africa collect nearly R1 bn per year. This is crucial revenue to the musician. Do you think it is possible for a musician can get their head around this music rights infrastructure? If so, can you explain how? If not, what do you think is the solution to empowering musicians of the future to know their rights?

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