MTN has denied it owes composers and artists around R1 million in outstanding royalties. This after MTN was reportedly accused by the Composers, Authors and Publishers Association (Capasso) of failing to pay music copyright royalties to songwriters since 2013.
"MTN received an invoice from Capasso for royalties owing up to the end of 2014. In analysing Capasso's invoice, MTN had identified that Capasso had been claiming royalties for composers that were not their members," MTN told ITWeb in response to the allegations.
The telecoms operator says it would not therefore have been "prudent" for it to make payment of the full invoiced amount to Capasso "when stakeholders within the music industry had raised certain concerns with the invoice".
Capasso is a South African non-profit company representing the mechanical rights of music composers, authors and publishers. MTN has denied claims it failed to pay an invoice of just under R1 million for 2014 as well as outstanding royalty payments for 2015.
"In an attempt to amicably resolve the issue and to ensure Capasso receives all outstanding payments from MTN, MTN made a payment to Capasso of the invoiced amount, less the duplicate claims. This amounted to R976 448.50 (incl VAT)."
MTN says it has also invited Capasso to participate in a meeting where all stakeholders could meet and resolve the disputed claims, which amounted to around R73 000.
Capasso also alleges MTN failed to declare music sales data and earnings for 2015.
"This is incorrect; MTN had sent all reports to Capasso for 2015," says MTN.
Last week, Capasso issued a takedown notice to MTN to remove all music of its members from MTN music platforms.
MTN says though this "development was unforeseen" it was willing to comply with the request if it had received a list of songs and artists that Capasso requested to be removed.
"Correspondingly, MTN also received official correspondence from a number of composers (who are Capasso members) pleading with MTN not to remove their content from MTN's digital platforms.
"Given the clear disjoint between the actions of Capasso and the very composers it claims to represent, MTN has not or will not action the taking down of any content unless the composers themselves are amenable to this action. MTN has recommended that Capasso engage directly with their members in an attempt to resolve this."
MTN says various issues in the music industry, including royalty payments, have compelled it to review its business model for the sale of content, and it has appointed content aggregators to manage this process for MTN.
"MTN now requires all of its content aggregators to themselves procure licences and make all royalty payments directly to Capasso for content sold."
Sony deal
Meanwhile, MTN has signed a content distribution agreement with Sony Music that it says will give its customers access to Sony's expansive catalogue of local and international artists and aid in MTN's "quest to promote and develop music as an art form".
MTN says the agreement was inked after nine months of talks between MTN and Sony Music.
The deal currently gives MTN customers access to caller ring back tones from Sony Music's catalogue of local and international artists. MTN says the parties are negotiating the extension of the deal to also include full tracks and albums.
"The signing of this deal will further provide the customers access to our ubiquitous digital platforms, thereby ensuring that artists widen their revenue streams," according to Larry Annetts, sales and marketing executive at MTN SA.
"We have both agreed that Sony will administer all royalties payable to their artists directly as well as those due to the relevant collecting societies in terms of this deal. Sony, as a content provider, have vast experience in this field and are best placed to embark on this important exercise," adds Annetts.
"We have asked our content providers (such as Sony) to report to, enter into agreements with and pay royalties directly to Capasso. We are certainly hopeful that the streamlining of the process will mitigate royalty issues going forward," says MTN.
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