1 let’s keep this simple! here’s the basic formula that describes the current contribution of...

1

Let’s keep this simple!

• Here’s the basic formula that describes the current contribution of RISA’s members to the oligopolistic and highly lucrative radio advertising revenue pie that the SABC and other members of the National Association of Broadcasters control.

2

RiSA Member’s output of

sound recordings

=30 billion hours of

radio entertainment for consumers

=3,6 trillion units of 30 seconds of saleable timefor broadcasters

=R2 billion radio

advertising revenue for broadcasters

(2006)

= ZERO revenue for record companies and performers

=HOW MUCH Revenue for record companies and performers in future?

Copyright Tribunalreferral

3

Commercial Music Radio

• Commercial music radio has been growing its advertising revenues at a significantly faster rate than the national economic growth.

• All radio stations that are essentially music stations – commercial or PBS – show the same basic revenue growth trends.

4

Watch the curve !

• Have a look at the increase in advertising revenue of commercial music radio stations over the past eight years – going back to the time at which the music industry was united in its call for needletime – and when the SABC and the NAB declined to participate in the DAC’s Music Industry Task Team.

• Lets start with some independent commercial music stations.

5

94.7

0

50

100

150

200

250

300

350

94.7

94.7 9 12 18 33 44 52 54 66 80 102 112 0 135 162 195 219 233 286

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

*Note the growth between 1999 and 2006 – from R112m to R286m.

Advertising revenue in Rm

6

Jacaranda

0

50

100

150

200

250

300

Jacaranda

Jacaranda 7.9 9.3 10.8 14.6 20.6 24.5 28.8 38.4 47.3 68.9 95.3 112 110 135 182 201 238 274

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

*Note: R112m in 2000 – and R274m in 2006


7

East Coast

0

50

100

150

200

250

300

East Coast

East Coast 6.6 7.0 7.4 11 14 17 19 28 39 51 70 90 114 139 182 206 218 243

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

*Note: from R90m in 2000 to R243m in 2006.


8

Now let’s look at SABC’s commercial stations…

9

Metro

0

50

100

150

200

250

Metro

Metro 6 8 10 19 32 53 65 83 88 82 89 0 117 146 147 168 204 234

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



10

5FM

0

20

40

60

80

100

120

140

160

180

5FM

5FM 29 37 41 46 50 61 66 83 85 76 81 114 107 112 119 119 157 165

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



11

SABC’s PBS stations have reflected the same growth

patterns.

12

Umhlobo Wenene

0.0

20.0

40.0

60.0

80.0

100.0

120.0

Umhlobo

Umhlobo 4.0 6.2 9.5 13.9 18.3 23.4 27.1 31.0 36.2 32.4 34.2 61.6 46.9 62.6 78 81 101 112

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

*Note: from R34,2m in 1999 to R112m in 2006.


13

Ukhozi

0

50

100

150

200

250

Ukhozi

Ukhozi 15.75 23.5 33.0 41.0 43.6 59.4 62.6 77.9 63.7 76.6 84.1 114 87.3 109.1 128 132 183 191

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



14

Thobela

0

10

20

30

40

50

60

70

Thobela

Thobela 6.6 7.8 10.3 13.0 14.8 16.6 17.8 19.6 23.2 20.0 20.8 31.2 25.5 36.5 43 44 56 62

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



15

Motsweding

0

10

20

30

40

50

60

70

Motsweding

Motsweding 3.9 5.4 7.1 9.9 11.5 14.0 16.8 20.5 25.3 21.6 21.6 29.8 24 35.3 42 45 56 62

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



16

Lesedi

0

20

40

60

80

100

120

Lesedi

Lesedi 4.1 6.4 9.8 13.7 16.7 21.1 23.1 24.5 31.0 30.4 32.1 52.8 44.3 59.8 70 77 97 103

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



17

What about radio stations that are not music stations?

• The same trends do not characterise the growth of non-music stations.

18

SAfm

0

5

10

15

20

25

30

35

SAfm

SAfm 10 11 13 14 16 17 13 10 10 12 16 0 18 24 26 29 32 29

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



19

And compare an all-talk station – which had exactly

the same advertising revenue in 2006 as it had in 1997.

20

702

0

10

20

30

40

50

60

702

702 23 26 31 33 41 48 55 46 57 47 42 0 31 34 34 43 50 57

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

*Note: R57m in 1997… and R57m in 2006


21

Let’s look at some other non-SABC commercial music radio

stations.

The trends is exactly the same.

22

YFM

0

20

40

60

80

100

120

140

YFM

YFM 14 25 33 29 59 2 43 120 126

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006


*Note: from R33m in 2000 to R126m in 2006

23

KFM

0

20

40

60

80

100

120

140

160

180

KFM

KFM 2 4 9 18 27 37 47 48 63 68 43 130 159 119 144

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



24

Algoa

0

10

20

30

40

50

60

Algoa

Algoa 3.9 4.2 4.1 6.5 8.5 9.6 10 13.5 15.7 14.5 23.2 12.4 7 13 17 23 46 53

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006


*Note: from R23,2m in 1999 to R53m in 2006

25

OFM

0

10

20

30

40

50

60

OFM

OFM 5 6 7 10 12 13 13.0 15 17 15.0 25 35 9 12 17 24 44 50

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006



26

RiSA Member’s output of

sound recordings

=30 billion hours of

radio entertainment for consumers

=3,6 trillion units of 30 seconds of saleable timefor broadcasters

=R2 billion radio

advertising revenue for broadcasters

(2006)

= ZERO revenue for record companies and performers

=HOW MUCH Revenue for record companies and performers in future?

Copyright Tribunalreferral

27

Radio Station’s revenue ___________________

10

SAMPRA FORMULA

X

Music __________________

All Editorial Content

Needletime:

Plus 2,5% for mechanical transfer license(optional at instance of station).

28

SAMPRA FORMULA – Example

Station’s advertising revenue = R200m

______ 8

= R25m x

Music owned / controlled by SAMPRA members

__________

All Editorial Content

=60___100

= R15m

Needletime and mechanicaltransfer license

royalty per annum.

29

Copyright Tribunal

• Based on a string of previous statements by SABC and NAB, SAMPRA does not believe that there is a sensible or realistic prospect of negotiating an agreed tariff with broadcasters.

• SAMPRA therefore intends to refer the tariff to the Copyright Tribunal as soon as possible.

30

Arrear Claims

SAMPRA intends to institute a High Court action on behalf of owners against commercial broadcasters for needletime royalties retrospective to the introduction of legislation in June 2002.

31

Arrear Claims

SAMPRA intends to lobby for South African performers only to be compensated for the period 1965 – May 2002 in order to create a statutorily controlled social security fund for performers.

What amount would be appropriate for 37 years of free music usage by SABC of the totality of South African musicians recorded output?

32

Arrear Claims for performers only

SAMPRA will lobby for an injection of R200m by SABC and government, jointly, to create a viable fund that will kick-start social security for artists, based on their contributions to airplay, giving them a monthly allowance, some measure of medical cover and a funeral scheme as fair compensation for nearly four decades of free usage of their music by SABC.

© Keith Lister 2007

1 let’s keep this simple! here’s the basic formula that describes the current contribution of...

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