SAMRO has been struggling to capture more than a small fraction of South Africa’s potential music revenues. The organization deploys a paucity of licenses at music venues, shops in malls, churches and shebeens (small pubs and bars) across the country. One estimate from 2007 by the South African Recording Rights Association (SARRAL), the organization that collected mechanical royalties in the country at the time, put SAMRO’s license income at only 15% of an estimated almost 4 billion South African rand ($223 million).
The limited revenues and ineffectual licensing practices have continued into 2020, according to one former SAMRO board member, who spoke to Billboard on condition of anonymity.
Over the last six years SAMRO has been in decline. The organization’s annual reports show gross revenue in 2013 of 371 million rand ($21 million), with year-on-year growth of 9%. By 2019 gross revenue was 475.6 million rand ($26.4 million) and year-on-year growth only 0.1%.
The operating loss has steadily increased from 30.71 million rand ($1.7 million) in 2013 to 50.8 million rand ($2.8 million) in 2019. (SAMRO derives 68% of its income from radio and broadcast sources, and 29% from general licences of music broadcast in public spaces.)
SAMRO relies on 350 out of its 15,000 licenses for over 75% of its revenues, Rosin says. Staff costs amount to 68% of total SAMRO spending, the main factor in a cost-to-income ratio of 32%, more than double the U.K.’s Performing Rights Society’s 14% in 2018.
SAMRO owns the monopoly right in South Africa to issue the global identifiers IPN#s for composers, authors, arrangers and publishers; and the International Standard Musical Work Code (ISWC) for musical works.
Distribution revenues flowing to SAMRO’s 17,000 members have been dipping considerably over the last 10 years, from 81% of net profit in 2010 (245.97 million rand, or $13.7 million) to only 63% (297.2 million rand, or $16.5 million) in 2019.
"Royalties Written Back to Distribution," a collection pool for unidentified works, has increased from 0.9% of revenue in 2006 to 12.5% of revenue in 2019, totaling 59.2 million rand ($3.3 million), according to the organization.
Proper data management and monitoring that could accurately account for the flow of royalties has been lacking, according to the former SAMRO board member.
Rosin has vowed to develop a "future proof" system to replace the current monitoring system, called "Zeus," which was implemented in 2013 at the cost of 75 million rand ($4.2 million).
In his 30-year music career, Rosin has worked for record companies, composers, publishers and broadcasters. He left a law practice at Rosin Wright Rosengarten in 2011 to join the firm’s biggest client, eTV, where he worked for nine years, including as COO and head of strategy.
SAMRO was founded in 1961 by Gideon Roos, a member of the Broedebond ("brotherhood"), a secret Afrikaner society whose members were largely responsible for designing and implementing apartheid, a system of legislation that upheld segregationist policies against non-white citizens of South Africa. Before founding SAMRO, a sister organization to PRS in the U.K., Roos served as Director General of South Africa’s public broadcaster, SABC. The Roos family controlled SAMRO for 36 years, until 1997.
From the outset, SAMRO put in place policies to subdue African composers and purposefully strip them of their rights and revenue. After apartheid ended in 1994, these practices continued unabated. A media exposé in 2017 of gospel star Hlengiwe Mhlaba, showed that 5/6th of her royalties were redirected elsewhere. The report led Nothando Migogo, SAMRO’s CEO at the time, to label the practice a “historical legacy,” meaning it was put in place during apartheid for specific political reasons. In April 2018 the minister of arts and culture called a special commission of inquiry to investigate music rights. (To date nothing further has been done on the issue.)
Other harmful practices SAMRO put in place included "split membership," which allows for a member to arrange for the collections of their global income to occur in another country, removing South Africa from the income and reporting. It was used to circumvent sanctions during apartheid and continues to this day. SAMRO’s audited report from 2019 shows a paltry 3% of its income coming from outside South Africa.
SAMRO members are also subjected to a three-tier membership pyramid with a wide gulf in income between top and bottom earners. An audit report in 2010 showed that pop queen Brenda Fassie earned 30,083 rand (about $1,600) per year — less than one-fourth of a sample of the top three earners, who pulled in about 138,000 rand (about $7,400).
Notwithstanding the many challenges, including the COVID-19 outbreak, Rosin has only a two-year tenure before he must identify a suitable successor for the CEO role at SAMRO.
But, as he says, "I got one big talent – I know what I don't know."