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Who Makes It Rain Down In Africa? How African Collecting Societies Are Performing

In 2018, the last year for which data is available, African performing rights societies that collect money for publishers and songwriters took in just 0.08% of the global total, according to the…

In 2018, the last year for which data is available, African performing rights societies that collect money for publishers and songwriters took in 72.1 million euros ($85 million at the average 2018 conversion rate) — just 0.08% of the global total, according to the CISAC Global Collections Report 2019. By comparison, Africa accounts for about 3% of global GDP.

But there are reasons to believe that the value of performing rights in Africa is about to grow significantly. Many of the continent’s societies are still relatively young compared with their European and American counterparts; collections are increasing, up 1.8% from the previous year and 35.8% over the last five; and streaming is growing fast in big economies like South Africa and Nigeria, and most analysts expect other markets to follow. Right now, the vast majority of money collected in Africa comes from just a few countries: South Africa alone accounted for almost half of African revenue, with 35.5 million euros ($41.9 million), while Algeria represented another 20% with 14.4 million euros ($17 million).

In the long run, as markets grow and laws develop, collecting societies in other countries could change the economics of music copyright in Africa. In 2018, only four of the 10 biggest economies in Africa made the top 10 list of countries on the continent that generated the most performance rights revenue: South Africa, Algeria, Morocco and Ghana. Nigeria, the country with the biggest economy in Africa, didn’t make the list, and its performing rights organization, COSON (the Copyright Society of Nigeria), is in a legal battle with the government agency’s Nigerian Copyright Commission.

In the short term, the most likely sources of growth could be two organizations in Johannesburg: the Southern African Music Rights Organisation (SAMRO) and the Composers, Authors and Publishers Association (CAPASSO). SAMRO — South Africa’s performing rights organization, which is retrenching under new leadership — in 2019 collected 472.6 million rand ($33.6 million), of which it distributed 297.2 million rand ($21.1 million) to rights holders.

CAPASSO started in 2014 as a nonprofit association of songwriters and publishers to collect and distribute mechanical royalties in South Africa. It received permission from SAMRO to license both mechanical and performing rights to music streaming companies, then in 2017 began signing agreements with societies around Africa to license rights to streaming services on their behalf. (It now has 17 such deals.) With 2019 collections of 100 million rand ($7.1 million), it’s not big, but it has ambitions of becoming a Pan-African licensing hub. That means digital services can go to CAPASSO to license African music across the continent, rather than to all 17 societies.

SAMRO is much more established, but the organization is coming out of a difficult period after state broadcaster SABC delayed payments and SAMRO lost 48 million rand ($2.8 million) in a failed effort to set up a collecting society in the United Arab Emirates. Earlier this year, the organization hired CEO Mark Rosin, a lawyer who has represented composers and lawyers for two decades, to return it to stability. “Current financial affairs didn’t look as strong as they would like them to look,” he says.

Rosin says his priority is to bring transparency to an organization that still has some opaque legacy structures around how distributions to its members are calculated. “There is a kind of status which accords certain members greater distributions — it has to do with the period for which they have been members, the amount of compositions and the income they’ve earned,” says Rosin. Even he found it confusing. “There’s no reason why people shouldn’t understand this,” he says.

Rosin also thinks that this complexity, along with conflict among members of the SAMRO board over the previous few years, have given the organization a bad reputation that it doesn’t entirely deserve. “Not everything was wrong,” he says, “but some things did go wrong.”

SAMRO is now collecting the money owed to it by broadcaster SABC — 160.4 million rand ($9.3 million), according to reports — under a payment plan established in 2019. “We hope to be caught up in the next few months,” says Rosin. He also needs to fix the organization’s finances — “costs are too high, and the revenues are too low” — since costs climbed to 40% of revenue, higher than they had previously been.

CAPASSO is smaller and faces more challenges — but it could also have more potential for growth. Since it essentially acts as an African licensing hub for streaming companies, it’s well positioned to grow along with the online music business. That means it needs to keep in place the deals that allow it to license rights on behalf of other collecting societies. So far, it’s one of the only organizations with the technology — thanks to a deal with the distribution-processing company BackOffice — to take in and process the enormous amount of data generated by streaming services.

Like other African collecting societies, CAPASSO and SAMRO also face international competition for members from societies outside Africa, like PRS for Music in the United Kingdom and SACEM in France, which have traditionally signed some of the continent’s top creators to license rights outside Africa. For now, CAPASSO can focus on licensing the smaller creators that aren’t pursued by international organizations but are valuable to local consumers, and thus to the services that want to attract them. Competition does affect the operations of both societies, though: The revenue they don’t collect internationally limits the investments in technical infrastructure they might otherwise make, thereby limiting their capacity to represent more creators internationally — creating a vicious cycle.

“In South Africa we’ve already turned this around — there’s more trust now, because of the way we’re doing things,” says CAPASSO CEO Jotam Matariro (whom Billboard interviewed for its May 23 Africa Now issue). “We’ll always have some who leave because they get advances [from other societies] — we can’t afford that. But we’re seeing more loyalty from big acts, and as we benefit more from multiterritory licensing, we expect to have even more.”

How African Collecting Societies Perform

Most of the 72 million euros ($77.9 million) collected by African performing rights organizations in 2018 came from just a few countries: South Africa alone accounted for almost half of African revenue, with 35.5 million euros ($38.3 million); and Algeria and Morocco represented another 20% (with 14.4 million euros, or $15.8 million) and 8.7% (with 6.3 million euros, or $6.8 million), respectively. Those countries take in so much money relative to the size of their economies because they have private copying levies, which place a surcharge on recordable media that societies then divide among rights holders. So do Burkina Faso and Ghana, which came in fifth and 10th, respectively. Of the top 10 biggest economies in Africa, only four make the top 10 list of countries on the continent with the most in collected royalties: South Africa, Algeria, Morocco and Ghana. —Rob Levine

How African Collecting Societies Are Faring

Ed Christman assisted in the preparation of this article