Legal battle over ringtones

2008-09-03 18:23

Cape Town - Ringtone provider eXactmobile and a music rights organisation are headed for court in a multi-million rand battle over royalties.

The National Organisation for Reproduction Rights in Music in Southern Africa (Norm) issued a summons against the provider in mid-August, and on Wednesday eXactmobile filed notice in the Cape High Court of its intention to defend.

Norm, an association of music publishers and composers, said in a statement that it was asking the court for an order that eXactmobile "must cease infringing the copyright of Norm's members" and pay royalties of 7.5% backdated to January 1 2006.

It was also seeking R2 million in damages.

John Fishlock, Norm board member and managing director of Universal Music Publishing, told Sapa that up to 2005, royalties on ringtones were charged as a fixed amount per download, with some discount on volume.

He said that ahead of the expiry of that agreement at the end of 2005, Norm proposed a new way of calculating the royalty - as a percentage of the amount charged to consumers by mobile content providers.

eXactmobile agreed to a 7.5% rate, then later reneged on the agreement and offered five percent, Fishlock said.

Following this impasse, publishers and composers had received no royalties from eXactmobile, or any other members of the Wireless Application Service Providers Association, to which eXactmobile belonged, since January 1 2006.

Fishlock said the difference in cash terms between the old and new rates was "substantial".

The original per-download agreement had been a concessionary rate to help eXactmobile and other providers roll out their businesses.

He said 7.5% was in keeping with international standards: currently the rate averaged at 8.2% of end user price in Europe.

The Norm statement said that among the South African artists affected by the non-payment of royalties were Thandiswa Mazwai, Springbok Nude Girls, Freshlyground, Sipho "Hotstix" Mabuse and Zamajobe.

A switchboard operator at eXactmobile said the company's manging director was not in the office, and that she did not know his cell number. There was no-one else she could put calls through to.

- Sapa

- SAPA