How Nigerian artistes are losing millions due to international deals

This move was happily embraced by the A-list stars who had achieved everything that there is on the continent, and had become jaded. They had already started hungering for the goodies that lay across the oceans and different markets.

The US market, which is one of the biggest music markets on the continent was always the Holy Grail of the markets. Everyone wanted a piece of the cake, a share of the spoils, and for our artistes, a stab at that glory.

These markets didn’t just feed their vanity and caressed their ego, if properly done right, it was a profound business opportunity for all the artistes who wanted to go through the glass ceiling and strong doors that held them back.

Sony Music provided a glimpse of that opportunity, wielding tailor-made contracts that were designed for every artiste and every level. Ayo Jay had a deal that was designed to amplify and generate profit for his buzzing single ‘Your Number’. Davido was put on a recording deal, Wizkid has similar, Tekno’s was designed for a three-single recording deal, Ycee got contracted to release his EP with them.

While it appears to be great news that these artistes are signed to international deals, they are also giving up certain parts of their business. They are losing millions in local streaming revenue.

The Nigerian music industry is run on an independent structure, which gives our artistes flexibility and control over their music. We could sign deals with anyone and everyone, depending on what they were bringing to the table. We could also freely compete locally and on the continent, distribute our music to wherever we want it to hit, and more.

Our artists lose all of that freedom and flexibility when they sign to an organized label structure. They are now bound by numerous rules, contracts and deals from the parent body. This gives them zero control over their music. From the recording process, down to the way the music is distributed and listened.

For distribution, they are still selling their music in the global digital stores and streaming platforms such as iTunes, Apple Music, Deezer, Spotify and others, just as they were before the Sony deal.

But Davido and Wizkid can’t sell their music in the local markets and platforms. Davido’s ‘Son Of Mercy’ EP or any of its singles cannot be found on MTN Music Plus, neither can Wizkid’s ‘Daddy Yo’. The same thing is happening for Ycee’s 2016 single ‘Link up’, which is his first release under Sony Music Africa.

Without the ability to sell their music in the local market, these Sony Artistes are losing millions in local revenue.

Digital music downloads and streaming in Nigeria have become the most favorable source of revenue for local musicians. A report by auditing firm Pricewaterhouse Coopers (PwC) in 2015 said revenue from music sales in Nigeria, Africa's most populous country, was $56 million that year, and predicted it would grow to $88 million in 2019.

PwC also said Nigeria's entertainment and media industry had an estimated total revenue of $4.8 billion in 2015 and was likely to grow to $8.1 billion in 2019, making it "the fastest-expanding major market globally".

Ringback caller tones currently generate at least a third more revenue for Nigerian artistes, than streaming on global digital stores.

But Sony Music artists are missing out on that.

Michael Ugwu, general manager for Sony Music Entertainment West Africa, told Reuters in 2016, that Sony Music is working on setting up partnership deals in Nigeria with telecoms companies MTN, Airtel and Etisalat [ETELZS.UL] since opening an office in commercial capital Lagos in February 2016.

But that deal is yet to be completed, and sealed.

This is because Sony Music is still stuck on working out a deal with the local telecommunication companies, and they are pushing for a new model for revenue sharing in the local markets. Being an international record label, with a huge catalogue of the greatest artistes, they believe they are in a strong position to influence that, and get a better deal than the local players.

A staff of a local streaming service who spoke to Pulse on condition of anonymity, revealed that Sony’s proposal is still in the pipeline. “They are looking to change the established dynamics of revenue sharing of the system, and these things will take more than just meetings.”

The conversations on the deals have dragged on forever, and until they are sorted, Nigerian artistes would have to forfeit that revenue stream. This means no caller ring-back tunes (CRBT) and others.

Also, there’s the small matter of promotion on social media. Facebook has developed an automated system to identify and remove copyrighted content, much like YouTube’s Content ID. This has majorly affected fan-made cover versions, whose creators are unlikely to have cleared their use with songwriters and publishers.

With Sony Music looking out for use of their material online, Nigerian artistes signed to them would have to forfeit organic promotion via social media. Instagram and Facebook now flags videos that contain parts of their music. So also does Youtube, and generally every other platform where fans can show love and spread the word about the music.

“Sony Music is still working its way up to operate at the local level in Nigeria. That’s why they don’t have these deals which would help give their artistes more leverage”, an industry insider who asked not to be named said.

So yes, our artistes have signed a deal with an international music giant. But by signing on to these contracts, they are losing the ability to operate at numerous local levels, and also losing millions in local streaming revenue.