Wednesday, January 26

The catastrophic decline of South Africa’s music industry

South African musicians say the local music industry has entered a catastrophic decline, exacerbated by the pandemic. In a two-part series, we look at decades of mismanagement by government and industry players that have failed musicians in this country, leaving South African artists producing half as many songs this year as possible. that they produced ten years ago.

In April and September this year, dozens of artists, including musicians, held a sit-in at the offices of the Department of Art and Culture, demanding to know what exactly happened to the R300 million package destined to finance creative projects.

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Meanwhile, the South African Music Industry Council (SAMIC), founded in 2016 and destined to be the voice of the industry, was paralyzed by factions and did little.

Even before Covid closed venues, music stores were closing and the industry was fighting piracy and streaming music online.

In 1998, the South African music industry was worth more than 200 million rand a year. Today, it is worth about 30 million rand, according to figures released annually by the South African record industry (Laughter).

Ten years ago, 50% of the music played publicly (whether on radio, television, via streaming, online, in restaurants, pubs, etc.) in this country was local. Today it is less than 25%.

Although live concerts made money for musicians, the heart of the industry was the record label. Without a successful album, a musician will have no fans, and without fans there is no concert. The decline in the number of independent record labels, the melting pot of talent, has emptied the industry.

While “indie music” is growing in the rest of the world, the number of independent music producers here has dropped from 80 to less than 20 in the last ten years.

Small, independent record labels struggled to stay afloat largely due to a lack of transparency about who pays the royalties and who receives the royalties. These struggling independents were bought out by big international record companies. South African music is now largely owned by companies like Sony, Warner, and Universal.

The dream that never came true

In 1995, the newly created Department of Arts and Culture identified South African music as a growing industry with the potential to generate significant income and cultural exports. TO 100 odd page report in 1998, titled Cultural Industries Growth Strategy (CIGS), which consulted extensively with music industry experts, outlined in detail how some adjustments to archaic copyright law, a small investment in independent record labels, and an enabling environment stop the music. the industry would unleash the enormous creative potential of this country.

The report’s preamble reads: “South Africa’s diverse and dynamic cultural and artistic heritage is one of its richest and most important resources, with the ability to generate significant economic and social benefits for the nation. Equally important, but less understood, is the potential for a vibrant and dynamic arts and culture sector to contribute significantly to the country’s economy. ”

The report recommended the establishment of a self-funded Cultural Industry Development Agency (CIDA) that would specifically develop the industry with a view to music exports.

Around the same time, music industry attorney and copyright expert Dr. Owen Dean published a document explaining how changes in copyright laws would create a source of funding and investment for the creation of local music content.

According to Dean, the apartheid government had changed copyright laws in the 1960s so that the SABC no longer had to pay musicians and record companies to broadcast its music. A new amendment before Parliament would restore these rights and free up significant investment in the local market.

“I really believe,” Dean said in a telephone interview, “that there was a genuine attempt to create a lucrative local music industry around 1998, especially for black music and black musicians. But there was also a lot of apartheid-era bureaucracy to unravel, especially around music rights and royalties. The SABC, since 1965, was exempt from paying the corresponding royalty payments, and that had to be undone, which took a long time. And although the legislation has changed, the implementation has not kept pace ”.

At the time of the 1998 report, South Africa was the world’s 28th largest market for legitimate album sales with increasing sales making it the world’s 15th fastest growing music market. In addition to four multinational record companies, the country was home to a major independent company (Gallo) and approximately 80 small independent record companies.

Independent labels owned about 33% of the market, while multinational corporations (Sony, Warner, Universal, EMI) controlled the remaining 67%. Several smaller independent companies were earning more than R10 million a year and, together with Gallo, were making over R200 million a year. The radio waves vibrated with Brenda Fassie, Mandoza, Just Jinger, Busi Mhlongo, Mango Groove, Johnny Clegg and TKZee.

The report concluded that “the fact that South Africa has a well-functioning industrial infrastructure is a strong indicator of the sustainability and potential of the local industry to expand in the near future.”

And he did. In the following years, the recording industry was at its peak. New musicians were discovered and new musical genres developed: African gospel, South African metal, alternative Afrikaans, Kwaito, blues-rock. Records of success emerged from local music festivals such as Woodstock South Africa, MotherFudd, Oppikoppi, Rocking the Daisies, and Splashy Fen. Brenda Fassie was South Africa’s best-selling artist with several albums going multiple platinum.

Declining fortunes

But in 2011, Forbes Africa was quoting South African Record Industry (RISA) figures, stating that sales declined by 15% between 2008 and 2010. The market size was too small to sustain a significant investment in local content, and if local content is not updated, die.

Meanwhile, bottlenecks with royalty payments continued, despite amendments to the Copyright Law in 2008. SABC was in arrears with royalty collection agencies to the tune of R250 million.

The situation has only gotten worse. Revenues at South Africa’s largest independent record label Gallo have plummeted from 150 million rand 25 years ago to just 14 million rand today. The value of the entire independent sector is less than R30 million.

The SABC has not yet settled its arrears in the payment of royalties.

International music companies have taken over local music catalogs, but have hardly invested in local musicians. Multinationals now own the vast majority of the music recorded in South Africa. Revenue from local music goes abroad, and the vast majority of South African music copyrights are held (and bank accounts) by companies and individuals outside the country.

Globally, the music industry is run by independent labels, while South Africa is the exact opposite. Several countries, such as Mexico and South Korea, derive huge revenues from the export of music. K-Pop, as the South Korean musical phenomenon is called, is currently worth more than $ 560 million. New Zealand, with a population one-tenth that of South Africa, raised more than R250 million for its musicians from global music consumers in 2020.

By comparison, in 2019, the South African Music Performance Rights Association, a royalty-collecting agency, raised just R108,000 for local musicians from foreign broadcasters, but paid more than R150 million to international rights holders and artists.

Despite South Africa’s rich musical heritage that looks good on paper, in real life South African musicians earn nothing close to the income of their fellow musicians around the world. They are hit by the double whammy of ongoing legal disputes over royalty payments combined with foreign ownership of their music.

Small, independent, local record labels have an incentive to invest in their artists, while international record companies (for which the percentage of turnover from South Africa is miniscule) do not.

The result of this bottleneck is a steep decline in local music content. Gallo Records, once the standard-bearer for local music and home to artists such as Lucky Dube, Ladysmith Black Mambazo, Hotstix Mabuse, and Mango Groove, is now classified as a small company by government definition.

The crucibles of new creativity, the small independent labels, have shrunk from 80 in 1998 to about 20. Without them, there is no one generating exciting local music that the locals want to hear.

One of the latter, Coleske Records, a force to be reckoned with in Afrikaans music, sold to Warner in 2021.

According to Clive Hardwick, previous owner of Bula Records (which sold seven million albums in its 16 years of existence), the demise of the small independent record label is the tragic result of years of mismanagement in the record industry, slowness and opacity. of royalty collection and lack of government commitment to industry.

“Independent labels in South Africa alone now represent 0.08% of the world’s independent music market,” said Hardwick. “Our great independents, like Gallo, have practically disappeared, which is a shame, since Gallo was the largest record label in Africa and the oldest at almost 100 years.”

Another independent record producer, Tshepo Nzimande, blames piracy. “Not just digital piracy, but physical piracy as well,” he says. “We could not migrate to digital like other countries, the costs were initially too high. Also, our traditional African music, our gospel… buyers are not digital. They want to buy cassettes. But record bars like Musica have closed, so they buy their tapes from street vendors. ”

“We cannot fight this. We can’t fight that because the major record labels don’t want to work with the local guys. Then the local producers start fighting among themselves for the crumbs from the market. We would need unity to fight this. But there is no unity in the industry in South Africa. ”

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