Vodacom, MTN and CCA accused of withholding royalty payments

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Vodacom, MTN and its content aggregator, Content Connect Africa (CCA), are currently in battle royale over music royalties.

According to City Press, DJ Cleo, Flavour N’abania and Capasso, a body which collects mechanical music royalties on behalf of artists.

Mechanical royalties, in case you were wondering, are payments that have to be made to an artist every time their creation is downloaded as a song, a ringtone and a ringback (when you dial a number and hear a song instead of that generic tone) tone through either the CCA or the networks.

DJ Cleo and Flavour have requested sales data from MTN and Vodacom to find out whether they should be expecting a pay cheque from the networks and if their copyright has been infringed.

Should either, or indeed both networks be found guilty they would be liable for a R5 000 fine or a jail term per instance of copyright infringement, and R10 000 and a jail term if this is the second instance of copyright infringement.

Capasso has outright accused MTN of not paying royalties in 2014 and failing to declare music sales and earnings for 2015. According to Capasso, the network owes the body at least R1 million in mechanical royalties.

A statement issued by MTN refutes this claim and says that it does not owe “billions of rands in royalty payments”.

Both Vodacom and CCA have also denied that they infringed on any musicians copyright.

Sounds simple, but is it really?

DJ Cleo and Flavour are disputing ringtones and ringback tones that are sold to users on a three-month contract of sorts. Once the three-month period was over the contract would automatically be renewed and the user billed again, unless they opted outed.

Copyright expert Graeme Gilfillan who is representing Will of Steel Productions (DJ Cleo’s company) and 2Nite Enter10ment (N’abania’s company) has requested data that will be used to audit the sales of the artists’ music.

MTN and Vodacom have both said they report back on every ringback tone sold or renewed via the three-month contract method. Both DJ Cleo and Flavour are disputing this.

So put simply, DJ Cleo and Flavour want to know whether the networks are being upfront with them and paying them way they are owed. The Capasso matter is hardly as simple.

Capasso insists that there has been a constant tug-of-war over the rates that were meant to be paid to the body during the period of 2006 -2013. These royalties are meant to be paid out at 8% but according to Capasso, this rate is being disputed by MTN.

According to Capasso, “Failed negotiations and rate disputes have been the order of the day for over five years; this while the mobile giant continues to sell hit singles”.

However, MTN has said, “MTN is up to date with most royalty payments with Capasso and is in the process of settling the recent royalty invoice … for the current period, which amounts to less than R1 million.”

Discussion surrounding the matters appear to be ongoing which should mean that a conclusion will eventually be reached, though the timeframe is uncertain at this point.

[Via – City Press] [Image SA BY – Michael Mandiberg]


Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.