Nigeria’s digital content ecosystem just got interesting with the licensing of Nigerian music by IROKOING to South Africa’s GO METRO. You get to read the release below but let me cut straight to the chase with some observations, first.
Needless to say, this move makes investing in Nigeria’s music industry a tad bit more attractive. I got into the whole African entertainment industry because of my interest in Nollywood films, first, particularly from the perspective of production. In less than two decades, Nollywood is the second largest film industry in the world in terms of production, with Hausa films ranking at the top of the food chain. FYI folks, Hausa is a first language in eight African countries which means over 30million people (independent of Nigerians) gain access and do watch Hausa films.
While Nollywood continues to refine its reputation, Nigeria’s music industry has just grown wings and wants to fly. Nevertheless, the reality remains that the level of financing required to take our entertainment industry to the next level is poor, at best. Yes President Goodluck Jonathan announced the $200 million (30billion) dollar investment into the industry. That was since November 2010 but industry professionals are still wondering where that money is.
As private companies like IROKOING begin making these kinds of moves in this post, especially in laying out the infrastructure for Nigeria’s digital content ecosystem, you can bet your pants off that Western and African investors will be knocking on Nigeria’s music industry doors to see the viability of our music industry.
Also, needless to say, Iroking positions itself where it doesn’t have to beg artists or labels to join anymore. Now, labels and artists will be begging IROKOING to license music to IROKOING because of the reach of that music which translates to increased revenue for artists/music publishers and labels.
Expansion into other African markets
Iroking has the power to leverage this deal they just brokered to extend into other African countries. The press release below is silent on the number of South African commuters we are talking about. Nevertheless, I see Iroking trying to leverage the power of this deal as an exhibit and bridge to dive into other African countries, starting with a place like Kenya.
Expansion into the USA
Tough sell but plausible. Jason Njoku, CEO and Co-founder of IROKO, is already on the record saying, with respect to Nollywood and IROKO TV, “we’re also looking into the TV and cable markets in the US- that’s a big area for us to look at and develop.” Nigerian music is uniquely situated from Nollywood films. In fact, from all data available, the real return on investments with respect to Nigeria’s entertainment export lies primarily in Nollywood. However, if we are not using traditional methods to penetrate America’s music industry, then, there just might be an opening to get Nigerian music through the back door.
The part that excites me the most, as many of you already know, are the legal issues and the legal landscape/ framework that all of these players attempt to do business on. There will be legal battles as many realize there is more money to be made in Nigeria’s digital content ecosystem. It is human nature. It is business. For starters, let’s parse out some of the new players in Nigeria’s digital ecosystem. This is just an illustrative list. My office is now accustomed to phone calls from abroad with new players looking to enter into this digital space.
Some current players, mostly digital distributors are:
PANA TV (Preparing to launch but seem to have traction and look like a real threat)
Truspot (Everyone is doing what Ike Orizu has already done. Ike, however, needs more financial backing and needs to get in front of the camera to aggressively market his brand. He already has the infrastructure and the formula.)
Spinlet (I mentioned the EME Album was a very bad move both on a financial front and reputation for Spinlet. They shot themselves in the foot way before they even started. There is a potential to re-emerge on a strong footing. Otherwise I see them fizzling out of the market place).
Jaguda (Just launched an online store but does not appear to be much of a threat with current infrastructure)
There are a lot more players but let me stop there so we can get into the legal issues!
EXPLOITATION OF COPYRIGHTED WORK & LEGAL LIABILITY
What are we doing here? It boils down to the exploitation of the copyrights of original creators of music i.e. you AML artists, whether you are a song writer, you perform or you write and perform your songs. This means we are dealing with copyright law.
Here is where I think the legal battles and issues surrounding licensing in the digital space is headed.
1. Is a Nigerian song published on the Internet a US, South African, Kenyan, Ghanaian etc. song? This is a very important question because it governs what courtrooms we will fight in when the stuff hits the fan, which it will, someway or somehow, in due time.
I think the answer, for the most part, will be that a Nigerian song where the copyright holders are in Nigeria that is published online to reach US citizens is also considered a US song. Obviously the Berne convention comes into play in the analysis to get to that conclusion in a court of law. Nevertheless, this means, for example, if there is an infringement claim by a Nigerian/non-Nigerian US based artist, US Federal court is where we will all be hanging out.
Similarly, if a company like IROKO, assuming it did not have the New York office it now has, claims infringement by a US organization of its copyrighted work published on the internet, we would still be kicking it in US Federal courts. Therefore, all players in this game, must be prepared to deal with infringement claims in numerous countries. Needless to say, you can’t do business in this kind of space and not have a solid legal team. It makes no sense.
2. Another legal issue likely to ensue is the clearance by companies like IROKO and the ones listed above when it comes to copyrighted work. What do I mean by that:
a. #Scenario #1– We saw IROKO’s attempt to claim copyright ownership in work that was never licensed to them. Recall the IROKO/Sinzu/Yemi Sax Carolina story I shared with you all? In that instance, the artist Sinzu most likely has an infringement claim for his published work, if it can be substantiated, against both IROKO and Sax. Licensees: Iroko, Trusport, PANA, Real Nollywood et. al MUST have valid licenses from copyright holders to deal in the music licensing game. I don’t think any of these players can fully absolve themselves from the liabilities ahead because for the longest and till now, the entertainment industry is rife with copyrighted infringed work of others, even as they yell “piracy.”
b. Scenario #2- As it stands, IROKO is bypassing COSON and directly licensing music from the artists and/or labels. COSON is a performance rights organization for Nigeria. I have not seen the language of the statute that confers COSON that honor and what the exact breakdown of rights look like, including the percentage of licensing fees organizations are to pay COSON. Assuming, however, its legal framework mirrors that of ASCAP and BMI, then like ASCAP and BMI are currently doing against (companies) like IROKO, I expect COSON to drag IROKO into court over these directly licensed music and it being left out in the cold. We are talking money here folks.
I also expect, although it would be hard to make the argument, IROKO to argue that COSON would be essentially running a monopoly if it is the only agency that all organizations must deal with to get access to licensed music of artists. Nigeria’s anti-competition laws, as I have said before, is hollow, if it exists at all. So, I don’t know how that would play out.
c. Scenario #3- Finally, I mentioned it on AML before and I do foresee it in the future. When one company continues to amass the kind of catalog and basically the entire music and film industry under its umbrella, there is, at some point, going to be an antitrust law suit, whether in Nigeria or outside, depending on the unique facts, that challenge such monopoly specific to Nigerian music. I know the antitrust laws in Nigeria are weak at best, but where there is a will, there is a way to extrapolate other similarly situated statutes to halt the money making abilities of a company that has them with the whole pie and others starving.
Certainly in the US with respect to music licensing where all roads have led to 1 or 2 organizations running the show, even the US government has sued such private and non profit organizations under antitrust claims.
In this instance, beyond IROKO acquiring exclusive music licenses from copyright holders, at least so they claim on the record, they sort of serve the role COSON should be serving in the digital space. How? They acquire exclusive licenses and negotiate assignment of copyrights both in the sound recording and composition and then distribute on their platform as well as sublicense the work to be distributed on other platforms and in many mediums. It is a highly disruptive model that substantially benefits IROKO to the detriment of other players, arguably. I mean its not like IROKO is Warner or other labels where they own all the original content in their catalog.
So arguably, such a structure will down the line lead to a situation where if you want to deal in Nigerian music, you must go through IROKO or else forget about it. Again, it’s an argument to be made but we will see how it really shakes out.
I’d be interested in your thoughts to intellectually and business wise, challenge my thinking . So, feel free to chime in and give your take on the exciting expansion of the Nigerian entertainment digital content ecosystem; and the players that keep it interesting.
In any event, interesting times ahead. Read the release above culled from Tanzania News Service.
“30th October 2012- iROKO Partners, the world’s largest online distributor of African music & movies today announced an exciting new partnership with GoMetro, a mobile site launched in September 2012 by mobi.lity in collaboration with South African commuter rail agency, Metrorail.
The brand new GoMetro mobile site provides commuters with real-time train schedules, timetable deviations, schedule changes and platform changes – to provide users with an enhanced digital resource for their daily commute. In addition to this, as of 31 October 2012, GoMetro mobile users will be able to listen to, watch, download and share the freshest tunes out there, anytime, anywhere via iROKING’s exclusive mobile site, gometro.iroking.com. Downloads on iROKING are FREE for anyone who visits the mobile site.
Adi Nduka-Agwu, iROKO Partners’ Head of Business Development for Africa says: “We’re thrilled to be partnering with GoMetro on this new project – it symbolises how we want to work with tech and entertainment companies across Africa. In addition to GoMetro users being able to keep on top of their travel plans on the mobile site, they will also have the ultimate soundtrack for their journey, courtesy of iROKING – whether people want some chill out tunes, or something to get them pumped up for the day, we have it”.
Users will also be able to share any of their favourite iROKING tracks with the rest of the world at the click of a button via email, Twitter and Facebook. iROKING features internationally celebrated home-grown talent such as 2Face, PSquare, Lynxx, Eva, Bez, Timaya and more. This new year-long partnership will revolutionise the daily commute for over 3 million daily South African railway users.
Justin Coetzee of GoMetro adds “We have always positioned GoMetro as a mobile platform to improve the commuter experience – and it is validating to see that pan out. GoMetro is a transit community on your phone, and to have been able to conclude a deal of this nature right after our inception shows incredible traction and an appetite for a mobile transit platform. It is fitting to have iROKING on our platform as the first music offering, as they are true African tech innovators. Public Transport just got cooler with GoMetro and iROKING.”iROKING is West Africa’s number one music distribution platform, with over 35,0000 tunes from 400 artists. The company also manages the YouTube channels of over 80 artists, delivering 15 million video views on average a month and over 130,000,000 views across its pages.”