New society aims to change music business

A SIGNIFICANT development, which will change the way music business is carried out has taken place.

The Southern African Music Rights Organisation Limited and the National Organisation for the Reproduction Rights in Music in Southern Africa Limited have announced that they have signed a memorandum of understanding last week, which is the first step in the process of jointly forming a single collecting society for the administration of mechanical rights.

The new entity will operate under the name Composers Authors Publishers Association of South Africa.

"This is an important milestone in a process that started about two years ago," Norm chairperson Arnold Mabunda says.

The two organisations confirmed that the decision to form Capasa was as a result of the needs expressed by licensees on the one hand and rights-holders on the other.

In an industry in which a single administrative body seems to uniquely suit the needs of both users and the rights holders, South Africa had been a global exception, with three collecting societies for the same right.

So the move by Samro and Norm introduces a new chapter.

Over the years there has been a decline of mechanical rights licence revenues to collecting societies worldwide as a result of the drastic reductions in the sales of CDs.

The supposed substitute revenue derived from legal digital downloads has been very slow in taking off largely due to the structure of the digital downloads industry and online piracy activities such as peer to peer file sharing.

The trend has continued and is only expected to stabilise next year. South Africa generally lagged the world trends in the decline of CD sales.

Capasa aims to address most of the entrenched inefficiencies in the licensing of mechanical rights.

Samro and Norm plan to launch the new society before the end of the year.