South Africa: Icasa steps in to protect legal rights of producers

Regulation & Policy

Icasa's move to intervene on how the issue of intellectual property rights between broadcasters and the local production industry should be addressed, could prompt a sigh of relief for those in the industry - who for some time have been bullied to give away their innovative ideas, sometimes for a pittance.

The SABC and producers have been at loggerheads over who should own the property rights. But the public broadcaster's argument has been that whoever puts in money owns the rights. Historically, the market has operated as a total monopoly, and a producer's ability to negotiate has been very limited.

The war between the SABC and the production industry was sparked by the advent of new broadcasting technologies and platforms such as the internet. The SABC has been criticised for its failure to exploit these opportunities as it could sell its content to broadcasters in other countries and on other platforms. For some time, producers have hoped the industry regulator would step in and offer them some form of legal protection.

Icasa will issue a discussion document in the next few weeks, on the commissioning of local programmes and intellectual property rights. This will tie in with the move to a digital platform, which will result in more space for new channels and, in turn, lead to greater demand for local content. One of the priorities for the move to the new digital signal is to promote local content.

So far the SABC, the Independent Producers' Organisation and the SA Screen Federation have managed to agree on a joint research project to look at international best practices on procurement for local content by public broadcasters and the issue of intellectual property rights. It aims to ensure commercial opportunities are fully exploited.

Icasa's move, if it succeeds, could see producers being treated as partners rather than as mere service providers. The past 10 years have seen the best and the worst of South Africa's black economic empowerment transactions. During this period, there has been a wave of empowerment deals in all sectors of the economy, reflecting a healthy market with robust profits and plenty of cheap credit.

Empowerment deals structured in a manner that would make them viable throughout their term, with firms facilitating these deals by providing actual or notional funding, have done well. Notional funding refers to funding an account or deal below its nominal value.

These deals were struck by Adcorp, Saab Grintek Technologies, Wilson Bayly Holmes Ovcon, Reunert, Aveng and Distell in the recent past. They set a good example of successful deals. A Johannesburg-based corporate finance expert said some of these deals were structured appropriately by advisors, which has enabled them to survive tough equity and debt markets.

This comes after a hard lesson was learnt from the first round of empowerment deals that were struck in the mid to late 1990s. Some of these empowerment deals never survived the Asian contagion that spread to emerging markets worldwide about ten years ago.