The Composers, Authors and Publishers Association (Capasso) claims MTN has only settled "a portion" of the debt it owes the music organisation for outstanding royalties.
Capasso CEO Nothando Migogo told ITWeb the portion paid by MTN excludes what the telecoms operator's service providers owe the mechanical rights licensing agency for the past two years.
"The total amount owing is unknown because neither MTN nor its many and varied service providers (who deliver the actual sound recordings to MTN) ? to whom MTN attempts to shift the copyright liability ? have reported full music sales for 2014 and 2015 to Capasso," says Migogo.
MTN previously told ITWeb that issues in the music industry, including royalty payments, had compelled it to review its business model for the sale of content, and it had chosen to appoint 'content aggregators' to manage this process.
"MTN now requires all of its content aggregators to themselves procure licences and make all royalty payments directly to Capasso for content sold."
Migogo maintains songs sold through MTN platforms are the telecoms operator's responsibility and MTN is passing the buck to content aggregators on this issue.
Capasso says content aggregator and MTN's subsidiary, Content Connect Africa (CCA), has failed to report how many Capasso members' songs were sold by it in 2014 and 2015, or pay the royalties for these sales.
Migogo says CCA has also "consistently disputed the rate at which Capasso licenses its members' music" and insists it can only afford to pay 50% of the published rate for royalties.
"This effectively means songwriters and publishers would be getting half the royalty for music sold on MTN as compared to the same song sold at the same price on Vodacom," explains Migogo.
CCA did not respond to request for comment by the time of publication.
The royalties row has been going on since earlier this month, when Capasso accused MTN of failing to pay around R1 million in music copyright royalties to songwriters since 2013. Last week, MTN told ITWeb it had paid Capasso over R976 000 in royalty payments for 2014 but there was a disagreement over R73 000 in "disputed claims".
"MTN received an invoice from Capasso for royalties owing up to the end of 2014. In analysing Capasso's invoice, MTN had identified Capasso had been claiming royalties for composers that were not their members," MTN told ITWeb.
Capasso confirmed the disputed claims made up 8% of the invoice in question and that "disputed claims are usual in the course of copyright administration because song catalogues are sold and move around often; for instance, when songwriters sign new publishing deals, etc".
Multi-layered work
Stephen Hollis, senior associate and intellectual property attorney at Adams & Adams, explains each musical work is multi-layered and there are usually a number of people entitled to royalties on any song.
Record labels usually own the copyright in the sound recordings on which musical works are recorded, while the person who wrote the original lyrics may own the copyright in the lyrics, and the original music composer may own copyright in the melody and musical composition.
The dispute in this case is over the mechanical rights of songs: these are licence fees that become payable by music users to the copyright owners of original music whenever a copy of a musical work is made ? be that a physical copy made of a CD or a download from the Internet that copies the music onto a mobile device or PC.
"If music content users and distributors like MTN make songs available for online download, including for ringtones, then every time someone downloads the song, a mechanical royalty becomes due to the copyright owners of the lyrics and music, and should be collected by Capasso, as long as the copyright owners are members of Capasso," says Hollis.
In SA, copyright is regulated in terms of the Copyright Act (No. 98 of 1978). Capasso is one of three main collection societies in SA that each deal with different aspects of royalty payments.
Capasso is the collection society for mechanical royalties, while the Southern African Music Rights Organisation (Samro) deals with copyright for composers and authors' performing rights. It deals with royalties created when music is broadcast on TV or radio or played in public places like gyms, shopping centres and restaurants.
The South African Music Performance Rights Association (Sampra) is the collective licensing society of copyright owners of music sound recordings and collects royalties on behalf of record labels.
Takedown notice
Capasso says MTN refused to comply with a takedown notice it had issued the telecoms operator on 10 February.
"We attached copyright ownership proof for five specific songs in the takedown notice, but MTN has said they will not take down any songs until we provide ownership proof for all the songs represented by Capasso," says Migogo.
Hollis says Capasso had grounds to issue a takedown notice if MTN was not correctly adhering to copyright law.
"If Capasso is aware of copies being made of the music of their members, they have the right to claim the royalties for that - that is what they do. If they are not being paid royalties, they have a right to ask the distributor to stop making copies of the work," he adds.
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