Poor CD sales not because of piracy

OKAY, I’ll burn you the CD,” says Thato before he looks over his shoulder — twice — and whispers, “…but on one condition,” as he inserts a blank CD into his ageing computer tower. This is what Thato says every time someone asks him for a copy of a popular album.

His neighbours, at a township in Ekurhuleni, can get a copy of any Marvin Gaye album or the latest Mandoza for a mere R10, or a round or two of beer, depending how close they are to him. His backyard shack has become a popular “record bar” and he prides himself on being the “local distributor”. His computer, which is supported on a beer crate next to his bed, is not connected to the internet, but he nevertheless manages to get the latest albums first — sometimes even before their release dates — from his “suppliers”.

This is the reality in urban areas of developed and developing countries. It is simply easier and cheaper to obtain pirated music CDs. Thato is one of many individuals and organised crime gangs whose businesses lead to the music industry’s losing millions of rands in sales.

According to last year’s industry figures, released by the Recording Industry of South Africa (Risa), the local-repertoire sales fell 2,9%: from R456m in 2006, to R443m last year.

The industry body named physical piracy, digital piracy, absence of broadcast and public-performance licence income, high capital risk in medium to large startups and low average return on capital, compared with other industries, as challenges facing the music industry. It says the consumer’s reluctance to pay for music, broadcasters’ reluctance to license royalties, media cynicism and government resistance to economic interventions are the biggest threats to the sector.

Industry role players agree, but most of them say the biggest factor in the fall is the rising cost of living in SA.

Bojan Handrijevic, artists and repertoire manager for the record distributor Independent Recording Industry Solutions, says that, although South Africans are buying more local music and there are elements of growth, consumers are feeling the pinch of the rising cost of living, which resulted in people buying what they needed, rather than what they wanted.

“It also has to do with affordability. These days, people are more conscious of how they spend money,” says Handrijevic.

Harvey Roberts, MD and head of sales for Bula Music, says the local music industry grew 30% in the past three years, but the overall depressed economic situation had affected sales, and the trend was expected to continue. “With the fuel increase last week, you could have bought a CD with the extra money used to fill your car,” says Roberts.

Roberts and Handrijevic says last year’s figures could also have been influenced by the lack of a “real” local hit in last year.

“Maybe creativity is also a factor. At the end of the day, a hit is a hit. If it’s a hit, people are going to buy it, if it’s not, people are not going to buy it,” says Handrijevic.

Roberts says there were a number of big hits in the past three years which included maskandi (music from Nquthu in KwaZulu-Natal) duo Shwi NoMtekhala’s album Wangisiza Baba, which sold 600000 units. “The 2006-07 (year) was a creative cycle, which continued for months. Clearly, in 2007, there was no real local hit,” he says, noting that it did not matter what type of genre the artist or group recorded, but if it was a hit, it would have appealed to most South Africans. He says all artists in the industry who were expected to deliver last year disappointed.

Radio stations were also blamed for the local industry’s poor performance last year. “The local music quota (for radio stations) needs to be changed, we need to lift the bar,” says Roberts. The South African local music quota is 25%, which record companies claim is usually ignored by radio stations. Roberts says the stations were disorganised and made it difficult for local producers to market their music.

“Radio is very important. If you can’t get your music on radio, how are people going to know you exist? They are not going to buy your music,” he says.

According to Roberts, the Association of Independent Recording Companies is talking to the SABC to convince the public broadcaster to lend more support to the local industry.

While some industry players are concerned about last year’s drop, others are unshaken. Oscar “DJ Oskido” Mdlongwa, co-founder of Kalawa Jazmee Records, says the 2,9% fall in physical CD sales was recovered in digital sales.

“The 2,9% went to the digital market. A lot of people are moving to downloading, rather than buying the actual CD,” says Mdlongwa.

However, Mdlongwa says the digital market’s disadvantage was that there were a “lot of unscrutinised” websites that ripped artists off through digital piracy.

“These people are killing the industry.”

Mdlongwa says despite the challenges, local independent recording companies are growing. “The business model has changed. We are also involved in other music-related things.” He says piracy is a global problem that will not go away. “It’s like HIV/Aids, you can’t run away.”

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Poor CD sales not because of piracy