Ethical practices must drive local music industry
Recent listing of Kenya-based music aggregator Mdundo on NASDAQ First North Growth Market in Denmark was a welcome to an industry reeling from Covid-19 aftershocks.
That the pre-sale raised $6.4 million (Sh694 million) and was oversubscribed by 110 per cent shows the confidence investors are placing in business plans and company management.
For this to occur, winning and maintaining investor trust requires solid management underpinned by ethical business and transparency.
For long, unethical practice in the Kenyan music industry has been normalised in name of ‘hustling’.
Cases documented include promoters failing to pay performers, producers plagiarising content, musicians benefitting from cover songs without clearance and copyright management organisations (CMOs) failing to remit royalties.
In 2019, President Uhuru Kenyatta instructed the Director of Criminal Investigations and Ethics and Anti-Corruption Commission to investigate organisations that collect and distribute royalties.
He also directed the Information and Communications Technology ministry not to renew licences of broadcasters with unpaid monies owed to music copyright holders.
Within the past decade, government and legislative intervention has included the National Music Policy (2015) and the Copyright Amendment Bill, 2018, which empowered state regulator Kenya Copyright Board to oversee CMOs.
With advances in digital technology, increased competition and globalisation is forcing a shift from the serikali tusaidie (government help us) 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.
Increased internet connectivity, low cost smartphones and 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 its current success.
There is an increased interest from global players in the African market. In 2015, Universal Music, announced a five-year plan that included continued investment in high-potential markets in Africa, India and China.
In 2018, it bought a 70 per cent stake in Kenya’s AI Records, whose catalogue include Ochestra Super Mazembe. Early this year, they opened Def Jam Africa, a division targeting urban music.
Warner Music Group has also invested in Africori, a digital music rights management and distributor whose artists include Nyashinski and Sho Madjozi.
It is also invested in Chocolate City, a Nigeria based record label and acquired South Africa’s Gallo Records.
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 a culture that values high ethical standards. This should be based upon global best practice and not the fear of punishment. — The writer is a screen media producer — [email protected]