Music industry

South Africa: Catastrophic decline of the South African music industry

Once considered a vital growth point with enormous export potential, our music industry is now just a shadow of itself, and Covid is not the main culprit.

| By Niki Moore

South African musicians say the local music industry has entered a catastrophic decline, exacerbated by the pandemic. In a two-part series, we examine decades of mismanagement by government and industry players that have let down musicians in this country, which has left South African artists producing half the number of songs this year. year that they did not produce ten years ago.

In April and September of this year, dozens of artists, including musicians, staged a sit-in at the offices of the Department of Arts and Culture, demanding to know what exactly happened to the package of 300 million rand intended to finance creative projects.

Meanwhile, the South African Music Industry Council (SAMIC), founded in 2016 and purported to be the voice of the industry, has been factionally crippled and has done little.

Even before Covid closed theaters, music stores were closing and the industry struggled with pirating and streaming music online. In 1998, the South African music industry was worth more than R200 million per year. Today, it is worth around R14 million, according to figures released annually by the Recording Industry of South Africa (RISA).

Ten years ago, 50% of the music played publicly (whether on radio, TV, 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 company. Without a successful record, a musician will have no fans, and without fans there is no concert. The decline in the number of independent record companies, melting pot of talent, has emptied the industry.

As “independent music” grows in the rest of the world, the number of independent music producers here has dropped from 80 to less than 20 over the past decade.

Small independent record companies have struggled to stay afloat, in large part due to a lack of transparency about who pays royalties and who pays them. These struggling independents have been bought by major international record companies. South African music is now largely owned by companies such as Sony, Warner and Universal.

The dream that never came true

In 1995, the newly established Department of Arts and Culture identified South African music as a growing industry with the potential for significant income and cultural export. A hundred-page report in 1998, titled Cultural Industries Growth Strategy (CIGS), which consulted widely with music industry experts, described in detail how a few changes made to the archaic law of the right to author, a small initial investment in independent record companies, and a favorable environment for the music industry would unleash the enormous creative potential of this country.

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

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

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

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

“I really believe,” Dean said in a phone interview, “that there was a real 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 crumble, especially around music rights and royalties. The SABC was, since 1965, exempt from paying the appropriate royalties, and this had to be rescinded, which has 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 28th largest market in the world for sales of legitimate albums, with expanding sales making it the 15th fastest growing music market in the world. world. In addition to four multinational record companies, the country was home to a large independent record company (Gallo) and around 80 small independent record companies.

Independent labels held around 33% of the market while multinational companies (Sony, Warner, Universal, EMI) controlled the remaining 67%. A number of small independents earned over R10 million per year and, with Gallo, had a turnover of over R200 million per year. The waves vibrated from 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 the potential of the local industry to develop in the near future”.

And he did. In the years that followed, 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. Successful records have been created by 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 multiple albums that went on to become multiple platinum records.

Waning fortunes

But in 2011, Forbes Africa cited figures from the Recording Industry of South Africa (RISA), saying that sales fell 15% between 2008 and 2010. The size of the market was too small to support large investments in local content. , and if the local content was not up to date, it would die.

Meanwhile, deadlocks with royalty payments continued, despite changes to copyright law in 2008. SABC was in arrears with royalty collection agencies to the tune of R 250 million. .

The situation only got worse. The revenues of South Africa’s largest independent label, Gallo, have plummeted from Rand 150 million 25 years ago to just Rand 14 million today. The value of the whole independent sector is less than R30 million.

The SABC has still not settled its backlog of royalty payments.

International music companies have taken over local music catalogs but have hardly invested in local musicians. Multinationals now own the vast majority of music recorded in South Africa. Local music revenues go abroad, and the vast majority of copyright in South African music is in the hands (and bank accounts) of companies and individuals outside the country.

Globally, the music industry is run by independent labels, while South Africa is the exact opposite. A number of countries, such as Mexico and South Korea, derive huge revenues from the export of music. K-Pop, as the South Korean music phenomenon is called, is currently worth over $ 560 million. New Zealand, with a population one-tenth that of South Africa, raised more than Rand 250 million for its musicians from global music consumers in 2020.

For comparison, in 2019, the South African Music Performance Rights Association, a royalty collection agency, collected only R108,000 for local musicians from overseas broadcasters, but paid out over R 150 million to the holders. international rights and artists.

Despite South Africa’s rich musical heritage which 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 struck by the double whammy of ongoing legal disputes over royalty payments combined with foreign ownership of their music.

Small local independent record companies are encouraged to invest in their artists, unlike international record companies (for which the South African percentage of turnover is tiny) do not.

The result of this strangulation is a precipitous decline in local music content. Gallo Records, once the standard bearer of local music and the home of artists such as Lucky Dube, Ladysmith Black Mambazo, Hotstix Mabuse and Mango Groove, is now classified as a small business according to the government’s definition.

The crucibles of new creativity – the small independent labels – have grown from 80 in 1998 to around 20. Without them, no one produces the exciting local music that locals want to hear.

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

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

“Independent labels in South Africa now represent just 0.08% of the global independent music market,” said Hardwick. “Our big independents, like Gallo, have practically disappeared, which is a real shame because Gallo was the biggest label in Africa and the oldest with almost 100 years.”

Another independent record producer, Tshepo Nzimande, accuses piracy. “Not only digital piracy, but also physical piracy,” he says. “We couldn’t go digital like other countries, the costs were too high initially. Also our traditional African music, our gospel … the buyers are not digital. They want to buy tapes. But record bars like Musica have closed down, so they buy their tapes from street vendors. “

“We can’t fight it. We can’t fight it because the majors don’t want to work with the local guys. So the local producers start fighting each other for the crumbs of the market. unity to fight this. But there is no unity in industry in South Africa. “