SAMRO/NORM AGREEMENT

The Southern African Music Rights Organisation, Limited (SAMRO) and the National Organisation for the Reproduction Rights in Music in Southern Africa, Limited (NORM) have signed a Memorandum of Understanding. This marks the first step in the process of jointly forming a single collecting society for the administration of Mechanical Rights. The new entity will operate under the name Composers Authors Publishers Association of South Africa (CAPASA).

“This is an important milestone in the process that started some two years ago and we are happy that we have reached this point,” says Arnold Mabunda, Chairman of the Board of Directors of NORM. The two organisations confirmed that the decision to form CAPASA was as a result of the needs expressed by licensees on the one hand and rightsholders on the other. “Most of our members have always felt that there could be a great benefit if the two organisations operated as one in the field of Mechanical Rights. Some of those benefits include reduced operating costs, a simplified licensing process and a streamlined rights holder database,” adds Mabunda.

In an industry where a single administration body seems to uniquely suit the needs of both the users and the rightsholders, South Africa had been a global exception, with three collecting societies for the same right. The move by SAMRO and NORM therefore introduces a new chapter which, according to those behind the move, has been long overdue. “Some large music users had always been complaining about the administrative burden and difficulties of taking out the Mechanical Rights licence from different societies, sometime even for the same song,” says Annette Emdon, Chairman of the Board of Directors of SAMRO. “We felt that a solution had to be found and we are pleased with the signing of the MOU as it marks the beginning of a significant journey towards the establishment of a fully fledged joint Mechanical Rights operation.”

Over the years there has been a decline of Mechanical Rights licence revenues to collecting societies worldwide as a result of the drastic reductions in the sales of physical Compact Discs (CDs). The supposed substitute revenue derived from legal digital downloads has been very slow in taking off, largely due to the structure of the digital downloads industry and online piracy activities such as peer to peer file sharing.

According to the International Confederation of Societies of Authors and Composers (with a French acronym CISAC), Mechanical Rights revenue of collecting societies globally declined by 8.7% between 2007 and 2009. The trend has continued and is only expected to stabilize in 2012. South Africa generally lagged behind world trends in the decline of CD sales. Mechanical Rights income, particularly from reproductions done by broadcasters and related businesses, however, declined significantly from about 2001 as some broadcasters simply cut back on the amounts payable for Mechanical Rights. The establishment of CAPASA is aimed at addressing most of the entrenched inefficiencies in the licensing of Mechanical Rights, thus ensuring that music composers, authors and publishers are adequately remunerated for their work.

SAMRO and NORM aim to launch the new society before the end of the year. Processes of registering and setting up a Board of Directors and establishing the appropriate IT infrastructure are already being considered by a specially formed committee made up of representatives from both organisations.