The International Confederation of Societies of Authors and Composers (CISAC) recently released its annual Global Collections Report, which detailed how digital revenues accounted for a little over 19% of all global music collections.
This translates to over €1bn ($1.1bn) in additional collections over the last four years. Chief among the reasons for this growth in collections is the formation of digital licensing hubs across multiple regions. These hubs allow for the centralising of processes and licensing activities as a direct response to the increase in digital consumption of music.
Streaming has given rise to an unprecedented amount of music consumption, which necessitates a change in how collective management organisations (CMOs) license their repertoire. Ease of access to repertoire on a multi-territorial basis is a now key requirement for many licensees. Hubs provide this much-needed convenience while also minimising the admin of duplicating licensing efforts in multiple territories thus allowing digital service providers (DSPs) the time to focus on growth.
In line with these global developments, the Composers, Authors and Publishers Association (CAPASSO) has for the past few years spearheaded the consolidation of pan-African repertoire and rights into a centralised licence. This has resulted in the formation of a unique pan-African licensing hub. The hub comprises 17 CMOs across the African continent and offers licensees repertoire on a multi-territorial basis in order to facilitate ease of access to a high-potential emerging market.
Africa’s digital collections over the past four years have seen a 32% growth. As a continent with a very young population and high smartphone penetration, the potential for even more growth cannot be overstated. In fact, one territory in the region is showing this potential with subscription streaming already accounting for 49% of all mechanical rights collections in South Africa. However, the rest of the continent has not quite taken to subscription streaming with the same vigour such that the potential for growth is immense.
“We are of the belief that Africa is on the brink of a streaming boom,” CAPASSO chief operations officer Wiseman Ngubo said. “Our numbers indicate that streaming revenue across multiple territories in the region, excluding South Africa, has had an increase of over 62% year on year. This signals the readiness and the appetite for streaming, thus we as CMOs must gear up to facilitate that access. This growth is directly attributable to the consolidation of rights and repertoire via the hub. Even in South Africa where there is positive penetration, there is still huge potential for growth”
Countries that are currently participating in multi-territorial licensing hub include Algeria, Burkina Faso, Nigeria, Kenya, Ghana, Senegal, Rwanda, Cape Verde and Namibia, among others. The hub offers what is effectively the most comprehensive repertoire licence available in the region, thus making access to the region simpler.
To date, the hub has entered into multi-territorial agreements with various DSPs including the likes of Apple Music, YouTube, Facebook and Spotify. Regional DSPs such as Boomplay, Udux, Music Time, Mdundo and others have also been licensed on a multi-territorial basis via the hub.
In addition to providing an easy route to market for DSPs, the aim of the hub is to provide African songwriters with a reliable way to get fair royalties for use of their music.
Sheer Publishing founder and managing director David Alexander commended the formation of the licensing hub.
“Central to the success of the African Licensing Hub is the concept that the African CMO becomes the hero of this story,” he said. “Currently the majority of African CMOs have limited success in licensing and distribution according to usage, which results in many of their economically successful members joining CMOs in Europe or the US.
“The African Licensing Hub proves that with decent repertoire data, the African CMOs can collect and distribute accurately to their own members, which starts a positive cycle of new members joining and providing their repertoire to the CMO, which results in better payments and services to local members.”
Although there is some work ahead given the continent’s challenges, the hub’s activities to date signal a clear message that Africa is indeed open for business.
CAPASSO CEO Jotam Matariro said: “Setting up the hub and putting licences in place is only but the first part of the process. We now need to encourage all our composers across the continent to provide metadata, which is key to collections. Without metadata, we will not be able to benefit from the licences that we have put in place, as collections are based on the works’ information that we are able to identify from the massive reports that the DSPs provide to us on a regular basis. We therefore call upon all music authors and composers as well as publishers across the continent to notify their works so we can make this process beneficial to all.”
To paraphrase the musings of US business journalist and media publisher Susan Butler in Music Confidential, “Think regional hubs. Get connected to more established hubs already, and stop wasting money by thinking that what you have in your database is a proprietary domain of your collective that must be protected at all cost.”
The African Licensing Hub sees African CMOs move towards this collective understanding, and with discussions in progress with many more potential CMO partners on the African continent, the idea of a one-stop African digital licence for music users is no longer a dream but a reality in progress.