- with readers working within the Advertising & Public Relations, Technology and Securities & Investment industries
- within Energy and Natural Resources topic(s)
When a song generates millions of streams across digital platforms, a simple question follows: who actually earns the royalties, and how much do they receive?
In South Africa’s recorded music industry, the answer is far more complicated than most people realise. Behind every stream, broadcast and public performance sits a complex system of rights, royalty streams and collection mechanisms governed largely by the Copyright Act 98 of 1978 and the Performers’ Protection Act 11 of 1967.
Artists, record labels, producers and investors operating in today’s music economy all need a clear understanding of how these royalties arise, who qualifies for payment and how the system operates.
The collection system
South Africa’s royalty system is administered through several collection societies, each responsible for a different category of rights.
One of the most important organisations in this system is the Recording Industry of South Africa (RiSA). Before royalties can be earned for a song or recording, an application must be made to RiSA for a unique ISRC code. Collection societies use this code to track how music is used and calculate the royalties owed to the relevant rights holders.
The main royalty streams are generally administered as follows:
| Type of royalty | Nature | Collecting body |
|---|---|---|
| Performance royalties | Earned when music is performed publicly | South African Music Rights Organisation (SAMRO) |
| Mechanical royalties | Earned when music is downloaded, streamed or physically reproduced | Composers, Authors and Publishers Association (CAPASSO) |
| Synchronisation royalties | Earned when music is licensed for use in advertisements, television and other content | CAPASSO, the artist or the publisher |
| Needletime royalties | Earned when sound recordings are played publicly | South African Music Performance Rights Association (SAMPRA) |
| Audio visual royalties | Earned from broadcasting music videos linked to a song | RiSA Audio Visual Licensing (RAV) |
Understanding who collects royalties is only part of the picture. The real complexity lies in how those royalties are distributed.
South African copyright law distinguishes between two separate rights categories:
- the composition, being the underlying musical work and lyrics; and
- the master, being the sound recording itself.
The applicable royalty stream determines which rights holder gets paid. A single track may involve multiple stakeholders, each owning different intellectual property rights connected to the same piece of music.
Who gets paid and why
The table below outlines the main industry participants and the royalty streams generally associated with their roles:
| Rights category | Industry player | Role | Primary revenue claim |
|---|---|---|---|
| The composition | Composers and authors | Wrote the music, lyrics or beat | Performance and mechanical royalties |
| The composition | Music publishers | Administer and promote works on behalf of composers | Performance, mechanical and synchronisation royalties |
| The master | Recording artists | Featured performers on the track | Needletime royalties |
| The master | Session musicians | Backing instrumentalists and performers | Needletime royalties |
| The master | Record labels | Finance and release recordings | Revenue depends on contractual arrangements with artists and composers |
Modern music production has also blurred traditional industry roles. Artists increasingly write, produce and perform their own work, particularly in genres such as amapiano and hip-hop.
Tyler, the Creator is a well-known example. He wrote, produced and performed the Grammy-winning album Igor, meaning multiple royalty streams could arise from the same work.
Failing to register each right with the correct collection society remains one of the most common reasons creators lose income they are legally entitled to receive.
Streaming and royalty flows
A single stream on a platform such as Spotify can trigger multiple royalty obligations at the same time.
CAPASSO collects mechanical royalties for composers and publishers, while SAMPRA collects needletime royalties for performers and record labels. The actual amounts paid depend on the platform’s payout model and the contractual split agreed between the artist and the label. Those terms are usually governed by the recording agreement and can differ substantially across the industry.
Recording agreements matter because an unfair streaming split, or a failure to account for an artist’s multiple creative roles, can materially reduce long-term earnings.
Protecting royalty rights
Commercial success in the music industry depends on more than talent. Rights management, registration and contractual protection remain critical.
At a minimum, creators and their advisers should:
- apply for the required ISRC codes through RiSA;
- register works with the relevant collection societies to avoid unclaimed royalties;
- understand the distinction between composition and master rights; and
- obtain independent legal advice before assigning or licensing intellectual property rights.
This is particularly important in a streaming-driven industry where the commercial value of recorded music increasingly depends on how rights are structured, registered and enforced.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
