Mark Rosin sees how hard it is to fix Samro
The new CEO of SA’s music rights body, Mark Rosin, is coming to the end of his first month of a multimillionrand two-year contract and is having to come to grips with the operational shortcomings and historical baggage of an organisation that represents more than 17,000 artists and publishers.
By owning the monopoly right in SA to issue the global identifiers for composers, authors, arrangers and publishers, and International Standard Musical Work Codes (ISWC) for musical works, the Southern African Music Rights Organisation (Samro) has held a powerful position in the local music industry since inception in 1961.
PRIME BENEFICIARIES ARE MULTINATIONAL PUBLISHERS THAT BUILT STRANGLEHOLD ON HISTORICAL AND SYSTEMATIC INJUSTICE
Yet benefit to its primary stakeholders, its members, has never added up. In 2019, Samro earned R472.5m in revenue and distributed only R297.2m to its members.
Samro’s prime beneficiaries are the multinational publishers that have built their stranglehold (85% market share) on historical and systematic injustice.
The practice of split membership was allegedly started during apartheid to circumvent sanctions and of late tax regulations, allowing for members to arrange for collection of their global income to occur in another country, removing SA from reporting.
This allegedly continues to this day, with no notification to the Reserve Bank; proof positive is that Samro reports only 3% of income from outside SA.
Broadcasters continue to be charged on public domain works and arrangements of those works, distributing 83.3% of those earnings via market share. “Over the last 15 years, Samro has distributed over R3bn, and of this public-domain works represent less than 1%,” Rosin said.
However, an investigation into gospel star Hlengiwe Mhlaba’s royalties indicated public domain as one of seven distinct income streams accumulating to
“royalties written back to distribution”. This amounts to 12.75% of turnover, R59.2m for 2019.
Proper data management and monitoring could accurately account for the flow of royalties, but various industry sources suggest this has never been the case at the organisation, due to the controversial and expensive Zeus monitoring system. One of
Rosin’s key performance indicator (KPI) targets is to fix the royalties issue, and “distribute more money to composers, distribute a better ratio of income to costs and get the ‘morale right’ ”, as he put it.
He has proposed a “dual process”, including a “proper analysis of what we have got, its shortcomings and cost analysis and then a look at a fresh system”.
His next target is increasing revenue and decreasing costs.
In the past two years Samro has operated at a R50m net loss.
Cost to income has been as high as 40% (double some global standards), with as much as 68% of costs paid to “the bloated staff complement”, as one insider has put it.
“Samro is helluva hard. Where do I focus here? Revenue, costs, staff morale, unions issues, distribution accuracy, query handling, throughput, putting in a new system, governance on the board, factionalism or management? I have to prioritise at some point,” he said.
“I got one big talent — I know what I don’t know.”
For 2020, Samro’s biggest debtor, the SABC, is in progress with payments of a “confidential amount” to be concluded by the end of April. An agreement is also on the table for major debtor MultiChoice, estimated at R80m-R90m.
Rosin has worked in the SA music industry for 30 years from all sides of the table, record companies, composers, publishers and broadcasters. In 2011, he left his successful law practice, Jacobson Rosin Wright, to join e.tv, its biggest client at the time. In nine years at e.tv, he worked in legal, new business, as head of strategy and finally was COO.
He was also a director of Lalela Music, which collected for the use of music by eMedia, but resigned when he left e.tv. Lalela music is a full member at Samro, but according to Rosin and company secretary HCI Managerial, it is a vacuous company, having sold its assets to STX, a US company administered by Universal Music.
The Samro human resources department has only four employees to deal with process, strategy, leadership and many other internal issues and conflicts. This has prompted the two nonexecutive independent board members, chair Nicholas Maweni and deputy chair of the audit and risk committee Sisa Mayekiso to seek to “restock the board with more business and people management skills”, as Maweni put it.
Mayekiso has further proposed an internal audit to ensure that there are no syndicates and no collusion on the board, which could be crucial.
In November 2019, the previous board was fired and a new board elected.
The new board proceeded with litigation against the previous board for receiving “an additional R1.4m in fees”, claimed a source, clarifying that these fees were for an extra 20 special meetings relating to Arab Emirates Music Rights Organisation (AEMRO) deliberations.
OVER THE LAST 15 YEARS, SAMRO HAS DISTRIBUTED OVER R3BN, AND OF THIS PUBLIC-DOMAIN WORKS REPRESENT LESS THAN 1%
AEMRO was a very expensive “lunch in Dubai”, as chair of the board at the time, Jerry Mnisi, described in an open letter. Samro wrote off R49.5m in its 2017 financials on AEMRO, and in 2018 a further R9.4m impairment cost. The Sekela Xabisa forensic audit labelled AEMRO, “a concoction”.
Rosin has inherited a situation in which the Samro board is scrapping over R1.4m paid in fees but turning a blind eye to the R58m that has disappeared.
“In an institution like this the question is how much time do you have to spend looking in the review mirror? If I do that, I am never going to fix this thing,” explained Rosin.
Rosin is appointed as a “turnaround strategist” and must identify a suitable successor for the CEO role once his two-year term is up.
While Rosin has his work cut out for him, turning Samro around can only be good news for the organisation, its members as well as the industry as a whole.