National Association of Broadcasters v South African Music Performance Rights Association

Following amendments to the Copyright Act 98 of 1978 in 2002 introducing so‑called ‘needletime’ royalties, broadcasters were required to pay royalties for the broadcast of sound recordings. No statutory rate was prescribed. The National Association of Broadcasters (NAB), representing commercial and public radio stations, and the South African Music Performance Rights Association (SAMPRA), an accredited collecting society for owners of copyright in sound recordings, failed to agree on a royalty rate or formula. SAMPRA referred the dispute to the Copyright Tribunal under s 9A of the Act and proposed a formula based largely on a percentage of broadcasters’ net revenue linked to music usage. NAB made a cross‑referral proposing an alternative formula based on time channels, profit, audience reach and actual revenue. The Copyright Tribunal adopted a determination that NAB contended ignored relevant evidence and factors. NAB appealed to the Supreme Court of Appeal, challenging the correctness of the Tribunal’s determination and the approach it adopted.

The appeal was upheld in part. The determination of the Copyright Tribunal was set aside and substituted with a new royalty formula based on the proportion of time sound recordings are broadcast relative to editorial content, multiplied by 3% of the broadcaster’s certified net broadcasting revenue. The cross‑appeal was dismissed, with no order as to costs.

This was the first Supreme Court of Appeal decision dealing with the determination of needletime royalties under the Copyright Act. The case clarified the role and limits of the Copyright Tribunal, confirmed that courts may substitute their own determination where the Tribunal ignores relevant factors, and provided authoritative guidance on how reasonable royalty rates for sound recordings should be assessed. The judgment also highlighted serious legislative deficiencies in the regulation and procedures of the Copyright Tribunal.