Copyright War: Stakeholders and Netflix State Their Concerns

All the ingredients of a long-running, multi-award-winning Netflix series are in the offing in South Africa’s interminable journey towards a copyright regime for a digital future. A protracted process of written submissions and oral hearings across the country has surfaced friction brewing for decades.

The controversial Copyright Amendment Bill (CAB) (2017) and Performers Protection Amendment Bill (PPAB) (2016), to which it is inextricably linked, are expected to be signed into law towards the end of 2023. The PPAB grants rights to performers in the audio-visual media, and the mechanisms through which those rights are proscribed in the CAB. The bills replace legislation dating back to 1978 and 1967, respectively.

Bias towards the protection of actors is a red flag for those on the business end of the creative industries. Unlike actors and writers in the UK and the US who when successful, have security through royalties, which gives them stability and allows them the freedom to write on specification and take chances, in South Africa, writers and actors, who are unable to unionise because of existing labour law are often exploited. It is not surprising that they have dug in their heels in support of the bills and are determined to overturn the survivalist culture that has been their lot for decades.

“I think there needs to be an acknowledgment that there have been abuses in the creative industries. There has been a lack of transformation and there are historical problems which need to be addressed, but they are not going to be addressed with how the current bills are drafted,” Chola Makgamathe, Chairperson of the Copyright Coalition of South Africa (CCSA) and General Manager: Legal for the South African Music Rights Association (SAMRO) says.

Lawyers advise that the bills could harm rather than help the creative industries, pointing out that copyright laws should reassure business and investors that their investments are protected and can be commercialised, and ensure that the creators of works (artists, authors, composers, and musicians) are equitably and adequately compensated.

Makgamathe compares the delicately balance to a mother and child scenario. “If you have a CAB that does not protect creators, you will have a situation where there are no works for performers to perform, “she states.

The Independent Black Filmmakers Collective (IBFC) advocates for protection for the creator and is simultaneously fighting alongside producers. Co-Chairperson, Azania Muendane says, “As long as the two bills are coupled there will be conflict.”

Makgamathe explains: “There is a lack of understanding of how copyright affects different industries. Copyright as it applies to music is different from copyright as it applies to a book, as it applies to animation, as it applies to the audio-visual sector.”

The IBFC and other organizations are calling for an independent economic impact study. “Even if it takes two years, just do it, and from there produce a CAB that is separate from the PPAB, and legislation that speaks specifically to the different sectors because the creative industry consists of a minimum of 13 sectors,” she says.

In exasperation, Jack Devnerain, Chairperson of the South African Guild of  Actors (SAGA) points out that, “The bills would not have reached this stage if the National Assembly itself was not satisfied that an impact assessment had been completed.” He points to a presentation by the Department of Planning, Monitoring and Evaluation in the Office of the Presidency, which was adopted by Cabinet in 2015 and presented to the Portfolio Committee of Trade, Industry and Competition on 30 May 2017.

The IBFC is aligned to over 25 industry associations that are opposed to the legislation, including: the National Association of Broadcasters (NAB), the Publishers’ Association of SA (PASA), the Music Producer’s Association of South Africa (MPASA), SAMRO, the International Federation of Film Producers’ Associations (FIAPF), the Independent Producer’s Organisation (IPO), the Association for Communication & Advertising (ACA), the Commercial Producers Association of South Africa (CPA) and Animation South Africa (ASA).

This collective is shouting the loudest and their arguments are sound, but SAGA says: “their incessant shouting is because their arguments do not withstand rational scrutiny…. It is surely no coincidence that among them are the Motion Pictures Association of America – who were instrumental in threats to expel South Africa from AGOA- and SAMRO, a collecting society mired in controversy over misappropriated royalties,” says SAGA.

Speaking on condition of anonymity, some actors say their livelihoods could be on the line if they are too vocal. “Any actor who comments on this is basically ending her career. Do I want to end my career? No, but I want the royalties,” actress and SAGA member,” Nambitha Mpumlwana says.

One producer signalled off the record that if the legislation is passed in its current form, actors will have to accept that they will be paid less upfront. Devnerain retorts, “It is a threat to say if you want royalties, then I’m going to pay you less. What is that standard rate that you want to pay me less than? The industry had no standard rate.”

Bobby Amm, Executive Officer of Commercial Producers Association of South Africa (CPASA) believes the bills are dangerous for the entire industry.

She claims that the bills do not make it clear whether extras are expected to receive royalties. Devnarain responds: “This is gamesmanship. Extras sign a release form; they don’t sign a performer’s contract like actors. They have no intellectual property ownership over their performance.”

Uncertainty about what royalties will be is another concern. The legislation refers to the commercialization of the work. In film terms, this relates to takings at the box office but, Amm points out, “It’s very difficult to know in commercial production terms what the commercial exploitation of the work means. This means that the budgets can’t be defined. How do you go to your local or foreign client and say, we can’t budget for talent because we don’t know what the royalties are going to be at this point?”

The CPSA says in advertising actors are paid for the use of their image, so the royalties specified in the legislation will be additional.

SAGA says: “For decades, actors in commercials have been paid ‘usage-fees’ based on well-established international practice. This practice is catered for in the PPAB by the inclusion of ‘equitable remuneration’ as an alternative to royalty payments. So, the commercial producers are already compliant!”

Global streamer Netflix has raised concerns over both bills. Netflix’s global manager for intellectual property and cultural policy, Renee Viljoen, has indicated that the royalty system is completely incompatible with its business model.

Devnarain points out that the linked PPAB and CAB provide for any broadcaster who commissions work to engage in a negotiation that allows for equitable remuneration. “It has repeatedly been made clear that the PPAB mentions ‘royalty or equitable remuneration’,” he asserts.

The bills give the minister the power to dictate contracts at his or her discretion. This is seen as overreach by the majority of objectors.

“You will have a minister who doesn’t understand how copyright operates determining minimum terms and conditions for contracts. The job of government and of ministers is to create an enabling environment where business can be done. I am not saying that the contracts are perfect, but I think to give those powers to a minister would be devastating,” Makgamathe says.

CEO of the Recording Industry of South Africa (RiSA), Advocate Nhlanhla Sibisi, says for the minister to be given the discretion to proscribe contracts is treating the industry as though it cannot think for itself.

Writers are caught in the crossfire between producers and performers. Theoline Maphutha manager of the Writers Guild of South Africa (WGSA) copyright project said: “We are saying, yes we want the residuals, but we also want the option of negotiating our own terms.”

RiSA has lashed out at the CAB stating that: “Some of the provisions of these bills would interfere with freedom of contract, undermine the protection of creative works, lead to legal and commercial uncertainty, and create a disincentive from local and international companies to invest in South African cultural industries.”

The “fair use’ clause in the CAB has been overwhelmingly rejected by stakeholders. “I can write a song, and someone can use it and claim that it’s fair use. The onus rests on me to take the risk, take that person to court, and prove copyright infringement,” Makgmathe explains. In the US, where punitive statutory damages are applicable in the event that copyright infringement is proved, the situation is different.

“The importation of the US-style ‘fair use’ exception in the CAB must be resisted. It would undermine the protection of the South African creative community, create significant legal uncertainty and benefit mainly large foreign companies seeking to use South African works for free,” RiSA says.

Those in opposition to the bills are threatening to approach the Constitutional Court if the legislation is adopted.

“My concern is once the damage is done, it’s going to be very difficult to undo it, even if there is a constitutional challenge or a change in the law,” Amm says.