Appendix 6 - International Music Council

PIRACY
The revenue lost by the industry due to piracy is estimated at R1 billion per year. Tax
revenue lost amounts to R140 million per year. 20 Piracy in South Africa harms the
development of local music, the primary target of the pirates. International research
shows that the most effective method of combating piracy is a banderole system. .
The methodology of the banderole system is to mark legitimate product with a label that
is impossible to forge. This assists the consumers and the criminal justice system to
identify legitimate product and provides the necessary proof of counterfeits, something
that is difficult to do at present. Integral to the efficacy of the banderole system, and thus
to combating piracy, is effective law enforcement.
Recommendation 5:
The MITT unanimously agrees that the implementation of the banderole system to
combat piracy is critical to the growth of South African music, and to the combating of a
widespread illegal activity in the country. The Minister is asked to solicit the co-operation
of his colleagues responsible for amending the relevant copyright legislation and for law
enforcement in this regard.
ASAMI has undertaken to:
• Finance the costs of implementing the application of the banderole to the product;
and
• Ensure that the introduction of the banderole will not increase the transfer price of
products.
BLANK TAPE LEVY
It is estimated that at least 90% of tapes bought in SA are used for illegal purposes.
Value-added Tax (VAT) lost through blank cassette piracy is conservatively estimated at
R42 million per annum. Blank tape levies are imposed in many countries throughout the
world and often prove to be crucial to growth of music industries.
Recommendation 6:
6. Refer to Annexures A and B for an extract from the ASAMI submissions indicating the impact of piracy
on the recording industry and how it affects the revenue of artists
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