Law & Policy, Music Business

AML EXCLUSIVE: The Business of Music: Royalty Payments & Calculations in Nigeria’s Music Industry

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Hi AML readers, this is it! This is my last week as an intern at AML. I have really enjoyed my time here and learnt a lot! I will be sharing all of my take away experiences with you soon. Until then, let’s talk royalties. Last week, my article on The Business of Music in Nigeria focused on songwriting. This week, I complete my two part article by finishing off on royalties and royalty calculations in Nigeria’s Music industry.

In the first part, I begin with an explanation of the current royalty climate/scheme/tension in the industry. Next, I enlist Ms. Uduak’s help on royalty calculations for songwriters and performing artists in Nigeria and finally, I return to discuss royalty calculations in ringtones, one of the growing trends in Nigeria’s music industry ( and where the money, along with endorsements, is), and then conclude with my overall thoughts on where I believe the industry is headed.
I. Introductory Background on The Royalty Payment Climate in Nigeria

In Nigeria, as discussed in my last article, songwriting as a serious profession is not a very popular craft. This is probably due to the lack of music publishers who can help push songwriters and songwriter material to record labels, artists and performance rights organizations (PROs). In fact, most songwriters, who are typically also the performers/recording artists, in Nigeria tend to sell all of the rights to their songs to their record labels for an upfront compensation. This is because there is no infrastructure to guarantee they will receive their royalty payments at a later date and many do not know any better.

Also, due to the lack of fully functional performance rights organization and the ongoing legal battle between Musical Copyright Society of Nigeria (MCSN) and Copyright Society of Nigeria (COSON), royalties tend not to be collected and/or paid for the exploitation of musical works of artists in Nigeria. While there have been attempts and even announcements made by COSON of distributing royalties to artists (songwriters), in conducting further investigation to pen this article, there were a wide range of responses from songwriters/artists, all claiming they are not receiving royalty payments from these collecting societies.

Ollachi Holman - Africa Music Law InternFor MCSN, for example, prominent artist eLDee, also owner of Trybe Records, has complained in the past about the incompetency of MCSN as a collecting society. eLDee has maintained that he has never received a dime from MCSN in all the years that MCSN represented Nigerian musicians. Yet he sees MCSN busy fighting COSON, and fails to understand what the fight is for.
A few years ago, COSON announced a new mechanical royalty calculation scheme for Nigerian artists. Mechanical royalties refer to the royalties an artist receives when her songs are reproduced on a CD, cassette tapes, dvds, records, or for digital download (mp3s, wav)). I wanted to know if some of Nigeria’s artists where in fact receiving mechanical royalties. Most of the artists and their teams I spoke with did not seem to know or care. “What is my business with new calculations when after all the calculating you can’t even collect the money that you are busy calculating?” said one artist in response to my question.

For “synch” or “synchronization” royalties, i.e. money from music that is reproduced/synced as a soundtrack into television programs, commercials, and movies, beyond the recent case of Paul Play Dairo v. COSON (https://www.africamusiclaw.com/2013/02/paul-play-v-ultima-ltd-mtn-did-coson-have-the-legal-authority-to-collect-royalty-fees-in-behalf-of-an-unregistered-member.html) who claims he never received payment for his song, there were other artists I found who also said they were yet to receive such synch royalties for their compositions.

The artists I spoke with moved beyond the PROs and even alleged that companies like MTV Base Africa have taken advantage of the lack of surety behind who should be allowed to collect artist royalties in Nigeria, and have failed to pay or account for artist royalties from publicly broadcasted music videos (Performance royalties). A performance royalty is the right an artist has to perform her composition publicly. When others such as TV / radio stations, restaurants, live venues, or jukeboxes perform those compositions, both under Nigeria and US Federal laws, they are required to pay the artists (songwriters).
These artists also allege the rampant and ingrained performance royalty violations and practices by majority of Nigeria’s radio stations. I was informed radio stations are notorious for playing the songs of artists without compensation. On AML, Ms. Uduak has discussed some of the lawsuits filed by COSON against radio stations like Wazobia FM in the past for these kinds of violations which you can read in the following link (https://www.africamusiclaw.com/2012/06/aml-lawsuits-in-the-news-fraud-claim-against-jim-iyke-dismissed-coson-files-billion-naira-lawsuits-against-wazobia-and-cool-fm-court-stops-renaming-of-unilag.html).

There was, however, some optimism on the future of the royalty payment climate in Nigeria. For example, for performance royalties, my investigation revealed that Beat 99.9 FM is taking the responsible route and appears to account for artist royalties by placing the amounts collected in an interest bearing account until the dispute between COSON and MCSN can be resolved.
Now that you have a sense of the royalty payment climate in Nigeria, I will hand it off to Ms. Uduak to discuss how labels in Nigeria structure their royalties and royalty calculations in their record contracts.
Uduak Oduok Social Media Week New York CityII. How Labels Calculate Royalties in Nigeria

Hi everyone! I am happy to join AML’s Ollachi Holman in discussing royalty payments in Nigeria’s music industry. Over the years, I have had the opportunity to view various contracts from some of the top labels in Nigeria as well as have had artists solicit me on proposed deal terms for the contracts they seek to sign. My discussions look at a very recent contract used by one of Nigeria’s label which is owned by a top label executive. So you can appreciate the differences, I compare and contrast the US payment structure with Nigeria’s. Hold my hands. I promise to go slow on this.

DOWNLOAD YOUR FREE COPY OF THE ARTICLE FOR AN  EXCLUSIVE INSIGHT ON HOW ROYALTY CALCULATIONS WORK IN NIGERIA.

~By Ollachi Holman & Uduak Oduok
Twitter: @enzetweets
@uduaklaw

Copyright 2013. Africa Music Law™. All Rights Reserved. www.africamusiclaw.com

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Ollachi Holman

AML intern Ollachi Holman aka “Enzé is a recording artist commonly affiliated with Syndik8 Records. She has been featured on tracks with the likes of Lynxxx, 2Shotz and MI, and has had a few cameos in clubs and albums. A recent law school graduate from the University of Houston Law School, she is pursuing a career in Entertainment Law. Look for her posts on on Mondays and Wednesdays in the AML categories of "Music Law" and "Celebrities Behaving Badly", now until May 2013. Please give her your feedback and let her know how she is doing, what you like and don't like. Thanks!

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