Yesterday I alerted you to the South African government commission investigating copyright royalty collection and distribution by collecting societies. What has drawn the attention of the South African government to the issue of collecting societies and their distribution of royalties?
I discussed one of the reasons in a reply to a comment back in October 2009.
I’ve reproduced portion of my reply, which consists primarily of quotes from other sources, as a partial answer to the question of why government is investigating royalty distribution.
The United Kingdom Intellectual Property Commission specifically cited South Africa as an example of a problematic practise. “For example, in South Africa, where the balance is likely to be more favourable than in lower income developing countries, its Dramatic, Artistic and Literary Rights Organisation (DALRO) distributed a total of approximately Euros74,000 to national rights holders, of which approximately Euros20,000 were received from foreign collecting societies; whilst over the same period it distributed approximately Euros137,000 to foreign rights holders.
It is also important to recognise that collective management organisations can potentially wield significant market power and may act in an anti-competitive manner. This is particularly of concern in developing countries with weak institutional capacities and regulatory frameworks.”
The Commission cited research by Professor Story who found
“The experience of the South African RRO, DALRO, is instructive. According to the latest available (2001) financial date posted on the DALRO website, DALRO distributed to national (i.e. South African) rights holders a total of €73,545.89 in reprographic (essentially photocopying) royalty fees during its 1999 financial year. By contrast, DALRO distributed a total of €136, 523.07 to foreign RROs (and hence to foreign right holders) in 1999. The main source of DALRO revenues was the educational sector, particularly universities and technikons. During the same period, DALRO received a total of €19,802.62 from other (i.e. non-South African) RROs for the reprographic copying done in these countries (and presumably for distribution to SA rights holders; this is split between publishers and authors; the percentage split is unknown, though certainly the UK’s Copyright Licensing Association distribution percentages greatly favour publishers over authors). What these figures reveal is that distributions from SA reprographic users to foreign holders were more than 2.5 times higher than the total distributions made to South African right holders by DALRO.37 As is well known, South Africa is a much richer country than any other in Africa and has a significantly larger and more robust publishing and education sector (the latter being where many authors work.) But even here, as the above figures show, the RRO system leads to a highly unequal balance of payments to the advantage of richer countries and reinforces existing patterns of dependency. If a fully functioning and active RRO were to be established in any other African county, especially a least developed country, the financial inequality would be even greater; such an African RRO would primarily – if not exclusively—become a royalty collector for foreign publishers and authors headquartered in rich countries.”
