President William Ruto has ordered all music royalty collections to move to the e-Citizen platform, despite fierce resistance from collective management organisations.
Kenya's music industry loses an estimated $55 million (Sh7.1 billion) every year due to deep-rooted weaknesses in copyright protection, enforcement, collective rights management, and royalty payment systems.
This is according to a new report by the Music Economy Development Initiative (MEDI), which paints a picture of an industry rich in talent but struggling to fully capture the value it creates.
The projected annual loss reflects the potential value of Kenya's recorded music sector by 2027, based on an analysis using 2023 as the benchmark year.
The report states that 2023 is the most recent year for which complete revenue data for the Kenyan music industry is available, enabling a reliable five-year projection to 2027.
The Sh7.1 billion covers both copyright and neighbouring rights revenues across the music value chain.
“We estimate the potential of recorded music value available to songwriters, music performers, publishers, and producers in Kenya. These are annual revenue levels achievable within a well-functioning market supported by critical infrastructure, including robust policies, adequate legal frameworks, and effective collective management organisations and other enforcement mechanisms,” notes the report.
Copyright revenues relate to the earnings of songwriters, composers, lyricists and music publishers.
These include income from digital platforms such as Spotify, Deezer, and Amazon Music, among others, as well as performance rights generated through radio and television broadcasts, rebroadcasting and retransmission services, background music licensing, private copying levies, synchronisation deals, and other licensing streams.
A section of Kenyan artistes protesting over royalties.
Equally, Copyright Neighbouring rights cover performers and recorded music producers such as record labels. Revenue sources here include music streaming, digital downloads, physical sales, synchronisation licenses, and performance rights generated through radio and television broadcasts, cable retransmission, public performances, dubbing, webcasting, simulcasting, catch-up services, private copying levies and other digital licensing arrangements.
The findings highlight a significant gap between the value Kenyan music is generating and what ultimately reaches the creators and rights holders. While consumption of music continues to grow across digital platforms and traditional media, inefficiencies within the copyright ecosystem mean that billions of shillings that should flow back to artists, songwriters, producers and publishers are either lost, uncollected or undistributed.
To some extent, Copyright Law inefficiencies has been blamed on the running of the Collective Management Organisations (CMOs) in Kenya.
According to Copyright regulator Kenya Copyright Board (KECOBO) senior legal Counsel, Alex Omanga, the legal regime in the country is to blame.
“You have to understand the legal regime we have in this country, of how Collective Management of rights is done. Under the Kenyan legal system, we have private companies, which are the CMOs, which are member-driven. They do not belong to the government; they are formed by members. So that organisation then gets a permit from KECOBO to collect royalties. When there is a problem with a CMO, its members have to deal with it because they are the ones who have the articles of association and elect board members who make decisions on when and how much they will distribute to members. So if the members can’t hold their board members accountable, how do we come in?” Omanga poses.
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However, CMOs also blame the government for constantly interfering in their operations and for providing insufficient support. This has created the perfect scenario for the Kenyan music industry to haemorrhage money.
“No government in the world collects royalties on behalf of artists, and this is regarding government collecting royalties via eCitizen, a job meant for CMOs. The CMOs have a memorandum of association with the artists they represent. The government's role is to enable and support the CMO in enforcing and ensuring compliance for effective collection, but this hasn't been happening, which is why we are losing money,” Richard Sereti, Acting CEO of the Music Copyright Society of Kenya, says.
In April, the Kenyan government revealed that it is targeting to collect an average of Sh3 billion yearly of music royalties via eCitizen following years of complaints of mismanagement and embezzlement of millions of shillings in royalty collections by CMOs.
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