The recording contract series; (part 12) Needletime In Recording Contracts

At the time of writing, there was a massive legal dispute going on in South Africa with regards to needletime (performance royalties payable by broadcasters and other users for the public performance of recorded music). It is absolutely vital that you address the issue of needletime in your recording contract.

The dispute relates to three things: SAMPRA (South African Music Performance Rights Association) believes that the laws drafted (namely the 2002 amendment and the regulations created under it):

a) do not require it to pay the performers or POSA directly – only the labels;

b) permit the labels to vary 50/50 split in record contracts; c) permit the labels to recoup recording and other costs before paying the performers their share.

A High Court case was/is under way to see if SAMPRA is correct, and there is also a proposal (rejected by SAMPRA but still proposed, nonetheless) that SAMPRA and POSA (Performers Organisation of South Africa) should create a merged society. But until we know the outcomes of the court case and/or surrounding dispute, it is essential that you address both possible outcomes in your recording agreement now. (Then, once the matter is settled, you will need to draft your needletime clause according to whatever the legal situation becomes, in the near future).

Thus, you currently need a clause stating that the split in needletime income (and, for that matter, VPL, since you probably paid for half the music video) should be 50/50, and that if your share passes through the label’s hands, the label will not deduct any recoupments or other expenses from your share. You should also state that you are given the right to join a collecting society to collect your share for you (in the event that a merged society is formed).

To be clear, you currently need a clause that says something like this: ‘Needletime and VPL: The Artist will be entitled to share equally with the Company in any royalties generated by the public performance of the recordings and music videos in terms of Section 5 of the Performers Protections Act, and Sections 8, 9, and 9A of the Copyright Act. Where such royalties are paid by any Collecting Society to the Company in toto, the Company shall immediately and forthwith remit 50% (fifty per cent) of the received amount to the Artist. It is specifically agreed that no recoupment of expenses or other deduction may be made by the Company from such remittance of needletime or VPL royalties to the Artist. Further, it is agreed that the Artist may elect to become a member of a Royalty Collection Society accredited to administer needletime royalties as contemplated herein, and that the Company, in such event, hereby cedes to the Artist and/or such Royalty Collection Society appointed by the Artist, any right or purported right it may have to receive the Artist’s share of such royalty.’

You will be glad you included the above clause.