MTN. (Duncan Alfreds, Fin24)
Johannesburg - A copyright body claims MTN [JSE:MTN] owes songwriters just under R1m in unpaid royalties for music sold by the mobile network.
MTN sells music via the likes of its caller tone service ‘CallerTunez’. The mobile network also secures music from third party aggregators which include Content Connect Africa (CCA). MTN acquired a stake in CCA in 2014, according to the Financial Times.
But non-profit songwriter and publishing royalty collecting society Capasso (Composers Authors and Publishers Association) says attempts to license and collect alleged outstanding royalties from MTN and CCA have been met with “constant rate disputes and an unwillingness to enter into licence agreements”.
Capasso is accusing MTN of not paying an invoice for 2014 and failing to report its 2015 music usage
"You can imagine the pressure that we're under as an agency from our members to say look I'm hearing my music everyday - where is my money?” Capasso CEO Nothando Migogo told Fin24 about the dispute with MTN.
"They (MTN) are selling unlicensed work.
"We've hit a brick wall. They're (MTN) just giving us the run-around; (we) can't get meetings,” said Migogo.
Migogo explained to Fin24 that there are two types of rights with music - the first being copyright in the composition and the second in the sound recording.
Capasso only deals with composition copyright and represents songwriters either by direct mandate or through their publishers.
But MTN has responded to Capasso’s claims by saying that the copyright body’s “allegations are devoid of all truth”.
“MTN has been working with Capasso to settle royalties for the current period, “ Larry Annetts - MTN South Africa’s executive for sales, marketing and distribution - told Fin24 via an email response.
“MTN has never disputed any royalty rates with Capasso or any other collecting society. Since 2014, MTN has required all content providers to obtain all necessary licences and engage directly with regulators.
“MTN requested Capasso to submit a revised and correct invoice in respect of invoices payable. To date the revised invoice has not been sent,” said Annetts.
Migogo, though, said that Capasso’s latest invoice is correct as it is based on usage reports for 2014 and calculated at the same rate at which MTN paid royalties for music usage in 2013.
Background to dispute
Capasso claims that MTN’s “attitude to songwriter royalties is not new” amid allegations that the mobile network had disputes with previous copyright bodies.
Capasso was formed in 2014 as a non-profit company amid the coming together of Samro (Southern African Music Rights Organisation) and Norm (National Organisation for Reproduction Rights in Music) into a single licensing hub.
Migogo said that "one of the things we inherited was the MTN outstanding royalty issue” and that "at that time, MTN had not paid anything at all for 2012 and 2013”.
Migogo further said that for the period between 2006 and 2011, there were only partial payments by MTN.
Capasso, though, managed to reach a payment agreement with MTN for the periods between 2006 and 2013, said Migogo.
Of the money that Capasso collects, 12.5% goes towards its operational costs while the rest is distributed to songwriters.
“So, we don't deliver actual content; we have rights in the content, in the composition,” Migogo told Fin24.
Waiting for agreement
Capasso is further calling on MTN to enter a licensing and reporting agreement regarding the music that the mobile network uses.
Other networks such as Vodacom have agreements with Capasso and are paying royalties to songwriters, said Migogo.
Migogo said that if the dispute isn’t resolved, Capasso could get mandates to stop MTN from selling music.
MTN’s other troubles
The dispute between Capasso and MTN is just the latest in a series of troubles for the mobile network in recent months.
In October last year, the Nigerian Communication Commission (NCC) fined MTN $5.2bn for failing to disconnect five million unregistered SIM cards. That fine has since been reduced to $3.9bn while the Federal High Court in Lagos last month moved to adjourn a case regarding the penalty to March 18 2016 in a bid to get MTN and the NCC to settle the matter outside court.
Cameroon’s anti-corruption board last month also said that the mobile network owes R1.5bn in taxes.
And in December last year, the Nigerian Copyright Commission (NCC) filed criminal charges against MTN Nigeria over alleged copyright infringement of musical work from an Abuja based musician, Dovie Omenuwoma-Eniwo (who is also known as Baba 2010).