SA's music industry has been riddled with rumours of unfair record deals. Image: iStock
Music makes the world dance, but money makes it go round. However, when the song is over, who really banks the notes?
The South African music industry has been riddled with rumours of unfair record deals and exploitation of artists by talent managers and record labels alike.
While music has the power to heal, touch and connect people from all walks of life, it’s more than just about catchy hooks and hypnotic harmonies. Beyond the captivating melodies is a global supply chain of tunes, lyrics and masters.
For music lovers, the primary goal is getting lost in the music and finding soundtracks to special moments in space and time. However, for composers, producers, songwriters and singers, the treble-bass mashup is bread and butter.
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The music industry’s glamorous facade can be misleading. Truth is, many artists only ever get to experience the lavish life of luxury mansions and fancy cars during music video shoots.
But, why are most South African musicians not as rich as they are famous? Well, it’s all in the fine print.
Recording contracts lay out terms and conditions informing the relationship between artists and their respective record labels. These include the number of albums an artist is expected to deliver as well as the royalty percentage they’ll receive from profits made.
Music business expert and record producer, Jonathan Shaw gave The Citizen a glimpse into the contractual intricacies of the South African music industry.
He explained that an artist’s royalty split is typically between 20 and 50% of streaming revenue, however, upcoming artists may be offered as little as 15%.
“A lot of them will take it, simply for the opportunity,” Shaw told The Citizen.
This means that regardless of how well the album performs, the artist will only be entitled to the portion stipulated in the contract.
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While a novice artist may not have much bargaining power, experienced musicians can leverage their body of work, milestones and achievements to negotiate better deals.
“If you’re a sought after artist, you have a lot of negotiating power… but new artists are probably going to get 15% of that streaming revenue,” Shaw said.
He recommended for artists to start bidding for at least 20%, but emphasised they should ideally aim for a 50% split.
Shaw further explained that an artist should also consider what else a record label is prepared to put on the table, such as marketing and promotions. He said that artists doing a bulk of the work in promoting their own music should aim for a bigger slice of the pie.
“If you’re going to be essentially doing all the work, you don’t want anything less than 50%,” he said.
However, there might not be a lot to go around in the early days, as new artists can earn anything between R2,000 and R50,000.
“There’s not a lot of money in streaming,” said Shaw.
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When it comes to the re-negotiation process, numbers are everything. Hence, reaching gold or platinum status is a big deal for an artist.
The Recording Industry of South Africa (Risa), awards these certifications to artists who exceed a certain number of units sold or streamed.
For artists, the milestone is more than just about receiving a shiny plaque to hang on the wall.
“If you’re reaching gold or platinum status, you can renegotiate your percentage,” Shaw said.
He explained that there’s an escalation in royalties based on how an artist’s music performs in the market, which incentivises artists to work harder.
“In terms of negotiating escalation, you’d want to be able to negotiate on an achievement of some sort, whether it’s streaming numbers, amount of revenue earned, or gold or platinum status within the industry.”
“The more successful you are, the more you earn.”
The expert said however, some artists may either be reluctant to initiate negotiations, or they may be completely oblivious to the option.
“Rarely will an artist push for it because they don’t wan’t to upset the label,” Shaw said.
“Most labels will agree to it – artists are either too scared or they don’t know about it,” he added.
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As the music industry evolved dramatically in the last decade amid the rise of online streaming platforms, so have record labels.
In attempts to maximise revenue streams, record companies diversified their offerings beyond making music.
“Record labels weren’t making enough from selling records, so they started getting into all the other aspects of the music industry – like publishing, live performances and other side deals they could get from the artist,” Shaw said.
The strategic move may have made record labels more profitable, but it’s opened artists to exploitation by greedy music executives.
“This creates a massive conflict of interest because now you have the same party negotiating for all of your interests in the entertainment industry – and probably you’ll get the short end of the stick,” Shaw said.
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Shaw’s advice to South African musicians is to treat their music careers like a business.
This entails going through recording contracts with a fine-tooth comb, preferably with a lawyer, and consulting industry experts for further insights.
Artists could also approach other record labels to find out if they’d be willing to make a better offer.
“There are many fish in the sea – if you do get offered a contract, tell another record company about it,” Shaw advised.
When it comes to key terms and conditions, Shaw said there were two main factors to consider; how long the agreement will last and what you’ll get from it.
He further cautioned against multiple-album deals. “If it’s a deal for one album, at least you know you can get out of it and renegotiate later.”
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While mega sales may not always be guaranteed, it’s important for musicians to cultivate the ground for harvest so they can reap the rewards if their music sales soar.
“Try to build in some escalation in the future if you are presented with a record contract,” Shaw said.
Making music is one thing, but monetising it is another.
While most artists simply want to focus on the melody, taking care of business is equally as important.
Monetising your talent requires managing your music career like an entity, which includes negotiating contractual agreements like any other company.
“Treat the record company as if they were a business partner,” Shaw advised.
“At the end of the day, it’s all just business and you need to manage your business as you would any other,” he concluded.
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