the pivotal role Telco's play in furthering Africa's music business

A vital and crucial point for the South African Music industry to note is that the majority of South African (and African) internet users access the web via their mobile phones. South African mobile operators have introduced very low-fee pre-paid and top-up models and a range of cheap headsets. Making mobile phones affordable means the landscape has changed for the music industry - the online music market will increase as more people gain access to the internet with these devices

With this good comes the bad, of course: consumers will no doubt share music illegally via Bluetooth, BBM, or similar mobile-phone based technologies (a form of P2P). This is because of our culture, local demographics and the socio-economic status of the majority of the local population. Considering this increase to the internet via mobile phones, copyright and digital rights management and enforcement systems must make provision for mobile phone users if our industry is to survive. Despite it's failure with regard to physical product, DRM for mobile headsets must, it must be submitted, be considered, since current (and perhaps) future copyright laws seem unable to address this societal issue.

In contrast with mobile use, home computer-based broadband penetration in Africa is still low. At the end of 2017, internetworldstats reports,"35.2% of households had a broadband connection"; with internet growth rates in the continent averaging 9.942% from 2000 till the end of 2017. High prices and poor bandwidth have limited the growth of internet connectivity. Digital music sales online (excluding ad-supported and subscription services) accounted for around 10% of the digital total in 2009. While the percentage has increased since then, it is nowhere near the penetration of other Western Countries.

Although digital sales remain low (and the arrival of iTunes has somewhat changed this), South Africa has the digital communications infrastructure needed to increase sales. The number of internet users steadily increasing annually, due to the growth in mobile broadband and 3G/4G/LTE internet connections and the licensing of greater number of service providers, which have started to result in cheaper, faster internet.

Some of the growth in broadband internet has come from small and medium-sized businesses, upgrading to ADSL, which has in turn provided internet access to more than half a million South Africans working in offices who were previously not online. An annual report released by global digital agencies, We Are Social and Hootsuite, reveals that Africa has seen the fastest growth rates in internet penetration, with the number of internet users across the continent increasing by more than 20% compared to 2017. Considering the fact that South Africans are increasingly able to access the internet and use the internet to conduct business, this increased activity online means that musical copyrights and fair use rights, now more than ever, need to be protected online to encourage usage and consequently growth in the music industry.

Caryn Green, in her thesis "The internet and South African Music" (available at wiredspace.wits.ac.za) states that, of the 10 independent South African recording artists interviewed by her, 60% use the internet extensively to conduct their business online, including the processes of production, promotion and distribution of the artist's brand, music and live performances. Green's study shows that the majority of South African unsigned artists are taking advantage of the internet as an alternative avenue and platform to conduct music business and feel that they successfully utilise the internet to launch and promote their brands and music.

Considering the growth in internet access and usage, new relationships between music businesses and online music service providers and music downloading statistics; it is clear that there is room for South Africa (and by extension Africa) to develop and grow its strength and position in the global music industry. As South Africa continues to strengthen its presence online, it is becoming more and more crucial that law, practices and technologies be developed to prevent piracy and protect music copyrights.

Despite the lack of bank accounts and credit cards, Mobile penetration in Africa is huge. In 2014, mobile phone penetration amongst adults was around 80%. Africa is in fact today a mature cell-phone market with world-leading infrastructure in this field. For the first time, therefore, there is a way to get music content to just about everyone in Africa and earn royalties from that music.

But how is the pie sliced up? Well currently, the Telco's are making the lion's share of the money, and many of them are seemingly averse to paying royalties. The current split (where contracts exist) from each mobile song is 60% to the Telco and Aggregator, 32% to the label for the master rights and 8% to the composer/publisher for compositional rights.

Despite their seemingly large cut, the Telco's are still complaining that they claim that their only interest in music is to drive subscribers to use their services, and that the 60% does not provide them enough profit to justify the huge increased cost that serving brings to their network overheads. The solution in their view is to cut the labels out, so they and the aggregators are starting to do more direct deals with artists. This might sound fine in principle, but it comes with grave dangers, because artists will now find themselves lost in a huge corporate landscape where the music business is neither understood nor hugely important (for them) in the greater scheme of things.