Local artists cry foul over lower-than-normal digital streaming royalties

The Recording Industry of South Africa (RISA) releases statistics of the South African music industry. Two weeks ago, South African artists marched to the Universal Music Group’s offices in Rosebank. Picture: Fati Moalusi Independent Newspapers

The Recording Industry of South Africa (RISA) releases statistics of the South African music industry. Two weeks ago, South African artists marched to the Universal Music Group’s offices in Rosebank. Picture: Fati Moalusi Independent Newspapers

Published May 13, 2024


Two weeks ago, South African artists including Mercy Pakela, Bongani Fassie, Mara Louw, Freddy Gwala and many others marched to Universal Music Group’s offices in Rosebank.

Veteran pop sensation Mercy Pakela. Picture: Itumeleng English Independent Newspapers

According Thobela Dlamini from the Gauteng Cultural and Creative Industries Federation of South Africa (CCIFSA), the march was aimed at getting multinational record labels such as Universal and Sony Music pay fair digital royalties to artists and songwriters.

“Our march was about the industry assisting the musicians who have their music owned by multinationals and are not getting paid their royalties.

“Multinationals don’t want to pay the digital rights as they claim it’s not in the contracts, but they go ahead and use the music in digital platforms such as iTunes and Spotify without artist and producers benefiting from it. Therefore, as CCIFSA Gauteng we were supporting the artist to fight for their monies to be paid and reclaim what belongs to them,” Dlamini said.

The music industry, through its representatives, has in recent months complained about an increase in music streaming platforms’ subscription fees.

Speaking to The Star following the recent march, music activist Tebogo Sithathu revealed that the issue of fair distribution of artists’ royalties remains a big problem for local artists.

“We were marching about the fair distribution of royalties to artists including Needletime royalties which are being collected by collecting societies but not given to artists.

“When it comes to streaming services, we understand that they have revolutionised the way we consume music, but the debate over royalties remains contentious. While they provide convenience and exposure for artists, the payout stream is generally low.

“On average, artists earn fractions of a cent per stream. To make a significant income from streams, you need a million to a billion streams. This has led to discussions within the industry about fair compensation and the need for more equitable revenue-sharing models between artists and streaming platforms,” Sithathu said.

This comes after streaming giant Spotify announced in November that it was increasing its fees, with the platform’s Premium Individual plan increasing from R59.99 to R64.99 per month, and the Duo plan increasing from R79.99 to R84.99 per month.

Another music manager, who did not want to be named, indicated that artists continue to suffer from being paid lower- than-standard royalties for the streaming of their music.

“It does not make sense that streaming platforms increase their subscription fees every year yet fail to compensate artists who are the creators of the content streamed on their platforms,” he said.

As South African music, especially the amapiano genre, becomes more popular internationally, questions are being raised on the fair pay of streaming royalties.

According to the International Federation of the Phonographic Industry’s Global Music Report 2021, “streaming revenue in South Africa rose 24.7% in 2020 to $32.6m (R489m)”.

Streaming royalties – also known as recording royalties – are paid by the digital service provider (DSP) to the owners of the sound recording (record companies) and performers’ rights (music rights organisations).

Spotify, one of the biggest streaming platforms, has indicated that it has launched its Loud and Clear platform which allows artists to keep track of the economics of music streaming as well as ensure transparency through sharing of streaming data.

Jocelyne Mhutu-Remy, MD for Spotify in Sub-Saharan Africa, indicated that the platform paid out over R200 million to music collecting societies who are responsible for royalty distribution to record labels and individual artists during its 2022 financial year.

For the year 2023, she said Spotify paid more than R256 million in royalties generated by local artists, reflecting a 240% increase since 2019 and more than 500% increase since 2017.

“According to IFPI’s 2024 report, the Sub-Saharan Africa (SSA) music industry is the only region where revenue growths have surpassed 20%, making it the fastest growing. SSA’s overall revenue grew by 24.7%, which was fuelled by a surge in paid streaming revenues, contributing 24.5% of the revenues.

On the issues of transparency, Mhutu-Remy indicated that the platform has launched its annual report called Loud & Clear to increase transparency when it comes to distribution of royalties.

“Spotify launched its annual report, Loud & Clear, to increase transparency in the music industry by sharing data on Spotify’s royalty payments and breaking down the global streaming economy, the players and the process. For the second year, Spotify is releasing the data on earnings, specifically for South African artists on the platform,” she said.

Attempts to get comments from Universal and Sony Music were unsuccessful at the time of going to print.

The Star