International Needletime

International needletime can be quite complicated.  The first thing to understand is that (although it does not really impact upon South African rates, or the formulae applicable from territory to territory)  the principle of reciprocity does have an effect on what is to be paid once the formula is applied.

What does ‘reciprocity’ mean? It is actually simple in principle.  There is an international treaty on copyright protection, known as the Berne Convention. There are a few, actually, but this is the most referred to and widely known.  It is an agreement between countries, the basic premise of which is that they will respect the copyright works of the other countries  – if they are signatories to the treaty –  and give those (foreign) works the same protection as they give to their own (domestic) works.  Example: South Africa gives 50 years of copyright protection to sound recordings, and so our courts will give protection to a sound recording made in the UK for 50 years – irrespective of the protection UK gives to its own works.  where reciprocity comes in, though, is where the UK does not give protection to SA works – if it doesn’t, then SA wont give protection to UK works.

This is important in the needletime scenario, because if a country does not recognise sound recording copyright, nor ‘performances’ as a species of protectable intellectual property, no royalties will be then payable by the broadcasters in that region.  So SA artists and record companies will not get royalties from that territory. And that has for long been the position with the USA. The principle of reciprocity, common in international copyright, means that radio stations (wherever) will not pay a royalty for the broadcast of sound recordings whose country of origin is one of those mentioned above. It is not entirely royalty free music, though; just remember that we are only talking about the sound recording royalty here, not the royalty payable for the composer rights.

In fact, there are many countries where broadcasters will not pay royalties for the broadcast of sound recordings (or performances). These include the United States of America, Peru, China, Russia, Turkey, Israel, Egypt, Pakistan, and many African countries including Lesotho, Namibia, Nigeria, Swaziland, Zambia, and Zimbabwe. (The position in the United States may be changing.)

International Overview.

Leaving that aside, let’s take a peek at the actual royalty rates around the world.  In South Africa, basically, radio stations pay 3% of advertising revenue for  the broadcast of copyright-protected sound recordings, factored by the percentage of time music consumes of the broadcasting day.

Of course, some monetary measure is required in a formula which seeks to establish a fair and reasonable royalty. Record companies, naturally, want to lock into the radio station’s advertising revenue, and factor a percentage of that revenue. On the other hand, a simple pay-per-play royalty,  irrespective of profit margins and ad-revenue, is also an option. Clearly there are conflicting paradigms at stake, but generally the international needletime approach has been to take advertising revenue as the cake from which to receive a slice.

However, the following table shows the diverse approaches in various countries where needletime royalties are in operation; the percentage is of advertising revenue generated by the radio station:-

0 – 2%
Australia
Chile
Japan
Malaysia
Romania
Argentina
Barbados
Costa Rica
Lithuania
India
Italy
Jamaica
Panama
Poland

2-4%
Canada
Dominican Republic
Latvia
Portugal
Slovenia
Spain
Switzerland
Bulgaria
Peru

4-6%
Austria
Czech Republic
Denmark
Greece
Hong Kong
Netherlands
Thailand
United Kingdom
France
Germany
Sweden
Slovak Republic <6%
Finland
Ireland

This table is obviously a basic picture. The point is that there is no international needletime standard, and each country has idiosyncrasies. In several territories, the single percentage covers both sound recording and performer royalties.