GLOCK FOREX AND THE MUSIC INDUSTRY BLASPHEMIES: WHERE IS THE ARTISTS MONEY GOING AND WHO'S IS BEHIND EVERYTHING ?

Publisher: Thuso Rambau, 

GLOCK FOREX AND THE TRUTH TALK ABOUT SOUTH AFRICAN MUSIC INDUSTRY BLASPHEMY SCANDALS WHICH ARE REVEALED AND MAKING NEWS.

South African music is in the doldrums. Ten years ago, local music made up half of the country's music scene. Today, it is less than a quarter. In this second part of our series, we look at where the money went. Artists protest outside the Department of Arts and Culture in Pretoria in May. Photo: Julia Evans/GroundUp. Artists protest outside the Department of Arts and Culture in Pretoria in May. Photo: Julia Evans/GroundUp

For most people around the world, the music industry represents glamour, fame, riches and influence. On the inside, though it is famously opaque, litigious and corrupt. If South Africa is to create a vibrant local industry that will benefit aspirant musicians, then far more transparency is needed. Whoever controls the money, controls the industry. And part of the reason why the local music industry has declined over the last decade is because of the confused and contradictory reporting and lack of accountability around the money that is being made. The music industry, globally, is regulated by the quaintly-named International Federation of Phonographic Industries (IFPI), established in 1933 and based in Switzerland. It administers music performance royalties across Africa, except in South Africa, where the music royalties are administered mostly by Recording Industry South Africa (RISA).

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South Africa has ended up with a number of different reporting and collecting agencies: Sampra collects royalties for music performance; RISA/RAV collects royalties for videos; Samro collects royalties for published music, such as composers and publishers. The sources of music royalties include TV and radio, live performances, online streaming, and restaurants and pubs that play music. This complex reporting and collecting network leads to duplication and a lot of confusion.“The Department of Trade and Industry has come up with new proposals,” says copyright lawyer Owen Dean, “but they do not understand the music industry and therefore all that these will do is add another layer of bureaucracy to an already over-bureaucratised field. There are a number of collection agencies, all doing the same job and charging high fees. Why this is necessary, is a mystery.”

A few statistics will show just how bad things are:

Sampra is holding onto more than R460m of undistributed revenue (according to its latest financial statements). These are royalties not paid over to record labels or to musicians. Sampra spokesperson Tiyani Maluleke denied this categorically, saying that royalty payments were all fully disbursed, but did not explain the R463,895,911 excess cash on Sampra’s balance sheet RISA Audio Visual, another collection agency, is also sitting on R60m of license fees available for distribution, money that should be going to record labels and musicians, according to its financials. South Africa’s collection society administrators charge some of the highest rates in the world. For example, of the R200m collected by Sampra in 2020, the agency spent R41 million on “administrative costs”. It only has 15 employees. This is more than double the rate charged by agencies in most parts of the world. The global average for administration is about 7%, as is the case with PPL, one of the very biggest collecting agencies in the world. Meanwhile, the South African Music Industry Council (SAMIC), the umbrella body formed to provide unity in the music industry, is dysfunctional due to infighting.“The problem with SAMIC now is a lack of democracy and too many egos,” says ex-board member Brian Mokoena. “This organisation was started to promote the industry, but instead people are using it to promote themselves.”

Apart from broadcast and video royalties, revenues from digital streaming services are also not finding their way back home. Multinational companies keep the money offshore and are not reinvesting in South Africa. In the end, the money in the South African music industry goes mostly to collection society administrators and three international record companies – Sony, Universal and Warner – not to talented South African musicians who create the music and are the only irreplaceable part of the system. Calculation of the number of times the song had been streamed, the number of YouTube and TikTok videos that were watched, the number of searches and downloads, produced a royalty figure of approximately R10 million. However, this is based on online algorithms and not actual royalty figures, so it is probable the amounts are less. Additionally, there are a number of entities that are entitled to shares of royalties according to contractual arrangements and royalty agreements: the record label, the publishers, the copyright-holders, the performers, and managers, the executives and the agents. So by the time royalties arrive in South Africa, everyone has taken their cut. And due to the secrecy surrounding the reporting of royalty collections, it will never be known just how much money Jerusalema made. Secretive industry players The difficulty of getting information out of the recording industry is demonstrated by the reaction from industry executives to our questions. Many requests for comment and interviews were either turned down or ignored. 

The RISA industry report for 2020 showed that the music industry in South Africa earned R456m in total. Of this, R368m was earned by international record labels, and R88m was earned by local music companies. The market share of local music, therefore, has dwindled from 50% ten years ago, to less than 20%, and it has decreased by 4.5% from 2019 to 2020. However, when a RISA spokesperson was asked to comment on the figures, they responded that the figures did not come from RISA, despite the fact that they are taken from a published RISA report. After this was pointed out, there was no further response. Music activist which is realised in 2020 that the independent music sector in South Africa had all but collapsed, and established the Independent Music Community (IMC) in an effort to revitalise the independents. “I took a break from the music industry for a few years, but I returned in 2013 to find the recording industry in a calamitous state,” he said. “I had expected that, with the flow of broadcast revenues, I would find a vibrant and energised industry. I found the doldrums.”