MAKING GAINS

Ethics will drive the music industry

Unethical practice in the sector has been normalised for long all in the name of ‘hustling’.

In Summary

Global interest and technological advances are enabling local music industry development and policymakers are taking note.

Achieving sustainable growth will require local players to cultivate ethical practice by eliminating piracy, corruption, embezzlement and shady business practices.

Crowd cheers the performances
Crowd cheers the performances
Image: Douglas Okiddy

The recent listing of Kenya-based music aggregator service Mdundo on the Nasdaq First North Growth Market in Denmark was a surprise welcome to an industry reeling from Covid-19 disruptions and aftershocks.

The fact that a pre-sale raised $6.4 million (Sh693.6 million) and was oversubscribed by 110 per cent shows the confidence investors are placing in the business plans and management of the company. For this to occur, winning and maintaining investor trust requires solid management underpinned by ethical business and transparency.

For a long time, unethical practice in the music industry has been normalised in the name of ‘hustling’. Cases that have been documented include promoters failing to pay performers, producers utilising copyrighted arrangements and passing them as original works, musicians benefitting from cover songs without necessary clearance and copyright management organisations failing to remit royalties.

 

In 2019, President Uhuru Kenyatta instructed the DCI and EACC to investigate organisations in charge of collecting and distributing royalties. He also directed the ICT ministry not to renew the licences of broadcasters with music copyright holders’ arrears.

Within the past decade, government and legislative interventions have empowered state regulator Kenya Copyright Board to oversight CMOs. With advances in digital technology, increased competition and globalisation are forcing a shift from the ‘serikali tusaidie’ mentality to astute business and ethical practice. A new breed of local entrepreneurs with global ambitions are positioning themselves to take advantage of increased demand due to a rising population.

Increased internet connectivity, low-cost smartphones and the rise of digital streaming is providing entrepreneurs with viable business opportunities that can be scaled across the continent. According to Mdundo, 239 million people in sub-Saharan Africa have access to the internet on their phones with growth projections of 483 million in 2025.

Leveraging digital technologies to curb piracy, world-class service delivery and increased transparency in collecting and distributing royalties has been key to Mdundo’s current success.

There is an increased interest from global players in the African market. In 2015, the world’s largest record label group Universal Music, announced a five-year development plan that included continued investment in the high-potential markets of Africa, India and China. In 2018, the company bought a 70 per cent stake in Kenya’s AI Records, whose catalogue include Orchestra Super Mazembe. Early this year, they also opened Def Jam Africa, a division targeting urban music.

Warner Music Group has also invested in Africori, a leading digital music rights management and distributor whose artists include Nyashinski and Sho Madjozi. The group is also invested in Chocolate City, a Nigeria based record label and acquired South Africa’s Gallo Records.

Global interest and technological advances are enabling local music industry development and policymakers are taking note. The 2019 Digital Economy Blueprint provides a country strategy to enable a thriving digital economy.

 

However, achieving sustainable growth will require local players to cultivate ethical practice by eliminating piracy, corruption, embezzlement and shady business practices.

World-class Kenyan creative businesses need to be built on the backbone of a culture that values high ethical standards. This should be based upon global best practice and not the fear of punishment.

Screen media producer. [email protected]