South Africa’s music industry is grappling with a growing issue: unclaimed royalties, often referred to as the ‘black box’. These are royalties that, despite being collected, remain unmatched to their rightful beneficiaries. The problem stems from various factors, including incomplete data, outdated banking details, and inadequate monitoring systems. The CISAC Global Collections Report 2025 highlights a marked increase in global music royalty collections over the past five years, yet unclaimed royalties persist as a significant challenge worldwide.
Under South African law, music royalties are categorized into performance, mechanical, synchronization, and sound recording royalties. Collecting societies, such as SAMRO, SAMPRA, and CAPASSO, are tasked with administering these royalties on behalf of rights holders. However, the current regulatory framework, primarily governed by the Collecting Societies Regulations of 2006, falls short in addressing the black box issue. These Regulations, while outlining the administration of public playing rights, do not mandate specific obligations for handling unclaimed royalties, leaving a regulatory gap.
The Regulatory Gap and Its Impact
The Copyright Act, the Performers’ Protection Act and the Regulations do not impose any obligations on societies in relation to handling, retention, or distribution of unclaimed royalties. This lack of oversight allows collecting societies to handle these funds with minimal external scrutiny. As a result, royalties legitimately collected remain lodged in society’s coffers, sometimes for years, without being distributed to identifiable beneficiaries and, ultimately, at risk of being absorbed into the society’s operational expenses. This situation disproportionately affects musicians, composers, producers, and publishers, who are deprived of income they are legally entitled to.
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International Context
In the digital streaming era, music crosses borders more easily than the accompanying data, leading to a global increase in unclaimed royalties. This is particularly problematic, as musical works regularly cross national borders without complete or accurate accompanying data, with the consequence that the revenue attributable to such works is diverted to the black box.
South Africa’s Collecting Societies and Their Roles
South Africa has approximately seven music collecting societies, each responsible for a distinct category of rights. SAMRO manages performance rights for composers and publishers, while SAMPRA, IMPRA, and IMBOKODO handle needletime rights for performers and producers. CAPASSO oversees mechanical rights for composers and publishers, and AIRCO and RISA administer audio-visual rights. These societies operate under the Collecting Societies Regulations of 2006, promulgated under the Copyright Act 98 of 1978.
Not all societies are subject to accreditation requirements. IMPRA, SAMPRA, IMBOKODO, CAPASSO, and SAMRO must obtain accreditation from the Companies and Intellectual Property Commission (CIPC) for a specified period. This selective application of accreditation highlights the need for a more uniform regulatory approach to ensure accountability across all societies.
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Regulatory Obligations
Regulations 6(2) and 8(1) outline the primary obligations for regulated societies, emphasizing effective administration of public playing rights and the distribution of at least 80% of collected funds to members annually, after deducting 20% for administrative costs.
Regulatory intervention on unclaimed music royalties is not merely desirable, it is overdue. By addressing its unique context, South Africa can ensure that unclaimed royalties are managed transparently and equitably, benefiting the rightful recipients.
