Nigerian singer, Flavour N’abania (a GLO ambassador) and South Africa’s Dj Cleo may be on their way to huge royalty war with Telco giant, MTN. The duo have both enjoyed hugely successful hit singles, which would have generated significant revenue when sold by the companies as a download, ringtone or ringback tone.
Sources in the camp of both stars have revealed that both stars have asked for sales data from MTN, its subsidiary and content aggregator Content Connect Africa (CCA), and Vodacom so they can have them audited to establish whether their copyright has been infringed.
While the companies strongly deny any infringements, with CCA dismissing the allegations as ‘ludicrous’, industry insiders say their liability could run into the billions in unpaid royalties and fines in South Africa alone.
According to City Press, If they can prove copyright violations, the SA Copyright Act provides for a first offence fine of up to R5 000, or a jail term. If it is a repeat offence, the act provides for a fine of up to R10 000 or a jail term, per infringement.
Copyright expert Graeme Gilfillan, representing DJ Cleo’s company, Will of Steel Productions, and Flavour’s company, 2Nite Enter10ment, began sending out separate requests for data from MTN, Vodacom and CCA since mid-December.
In his letters, Gilfillan says there has been ‘disquiet’ at the way the companies use a ‘three-month limited licence’ to sell ringback tones pertaining specifically to how mechanical royalties are accounted, reported and disclosed.
At the heart of DJ Cleo and Flavour’s disputes is the fact that ringtones and ringback tones are sold on a three-month, opt-out licence, which means that if the buyer does not cancel the agreement, they are automatically recharged every three months
Gilfillan however says studies show most consumers keep their ringtone for between two and five three-month periods, and every sale needs to be reported and royalties paid, not just the first one.
Gilfillan wrote that attempts to obtain proof of payment for licence renewals were ‘rebuffed’ by the companies..
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