SA joins digital mu­sic main­stream

Mail & Guardian - - Business -

“It’s cool in the sense that you don’t have to wait for peo­ple to play you on the ra­dio or for some­one to pick you up from TV; you can do it yourself and get as far as you are will­ing to push yourself,” said Yoza Mnyanda, one half of Darkie Fic­tion.

Some of the more pop­u­lar mu­sic­stream­ing plat­forms in South Africa in­clude Ap­ple Mu­sic, Google Play, Deezer, Tidal and the world’s big­gest stream­ing plat­form, Spo­tify, which en­tered the South African mar­ket ear­lier this year.

Whereas some plat­forms such as Spo­tify and Deezer al­low users to stream mu­sic for free, with limited func­tion­al­ity and in-app ad­ver­tise­ments, ser­vices such as Ap­ple Mu­sic and Tidal are strictly sub­scrip­tion based; users pay a monthly fee to get ac­cess to mil­lions of songs. Sub­scrip­tion fees are R60 on most plat­forms but can go up to R160. On all plat­forms, you lose the mu­sic once you can­cel the sub­scrip­tion.

Those who hold the rights to the songs are paid a fee ev­ery time some­one streams the song. The fee can be split be­tween the artist, record la­bel, song­writ­ers, pro­duc­ers and com­posers, de­pend­ing on the ar­range­ment agreed to by them.

Percy said that phys­i­cal sales of mu­sic had been de­clin­ing steadily and, although digital mu­sic was yet to make up for the loss in rev­enue, it was mak­ing con­sid­er­able strides in get­ting there.

“One needs to re­mem­ber that only one roy­alty is paid for the pur­chase of a phys­i­cal prod­uct, ir­re­spec­tive of how many times a per­son lis­tens to it once it is bought. Stream­ing, on the other hand, is roy­alty per in­di­vid­ual stream. There­fore, whilst pay­out is lower, con­sump­tion is so much higher,” he said.

Statista fore­casts that the rev­enue for digital streams in South Africa is ex­pected to grow by 6.2% an­nu­ally and will reach $28-mil­lion in the next five years.

On­line stream­ing ser­vices such Spo­tify, whose ser­vices can be used for free by lis­ten­ers, have come un­der fire from some of the big­gest artists in the world about how much they pay artists for their mu­sic.

In 2014, global pop artist Taylor Swift took all her mu­sic off Spo­tify, ex­plain­ing in an in­ter­view with Ya­hoo that she did not want to be on a plat­form that did not com­pen­sate artists fairly and per­pet­u­at­ing the idea that “mu­sic has no value and should be free”. She put her mu­sic back on the plat­form in 2017.

“I have not had a bad ex­pe­ri­ence,” said Darkie Fic­tion’s Mnyanza on stream­ing roy­al­ties.

“I am not sure how much you get per stream but it does add up and it’s quite nice. Ei­ther way, you get your money off per­for­mances and deals. No one is ex­pect­ing to make bil­lions off itunes.”

Te­bogo Tsh­wane is an Adamela Trust busi­ness jour­nal­ist at the M&G

Moody’s doubts Eskom

Sov­er­eign credit rat­ing agency Moody’s says the credit im­pli­ca­tions of the gov­ern­ment absorbing R100­bil­lion of Eskom’s gov­ern­ment-guar­an­teed debt de­pends on what will be done to im­prove the bank­rupt power util­ity’s fi­nan­cial health to re­duce the gov­ern­ment’s fu­ture con­tin­gent li­a­bil­i­ties.

The util­ity raised the pos­si­bil­ity of re­duc­ing its debt. If ac­cepted, it could in­crease the state’s debt to gross do­mes­tic prod­uct ra­tio by two percentage points above what was an­nounced in the medium-term bud­get pol­icy.

“If the debt trans­fer grants fur­ther mea­sures like ef­fi­ciency sav­ings and/ or tar­iff in­creases re­quested by the com­pany in Oc­to­ber that re­duces this con­tin­gent li­a­bil­ity risk, the over­all credit im­pact of the debt trans­fer could be neu­tral,” said Eskom.

But Moody’s warned that there was no cer­tainty of this hap­pen­ing be­cause Eskom has al­ready twice de­layed its turn­around strat­egy.

In­fla­tion up slightly

Con­sumer price in­fla­tion in­creased slightly in Novem­ber to 5.2%, up from 5.1% in Oc­to­ber, ac­cord­ing to the lat­est re­port by Sta­tis­tics South Africa. Con­sumer prices also went up by 0.2% month on month in Novem­ber.

In­ter­est­ingly, Statssa found that the cost of hot bev­er­ages was up 4.2% on last year’s. The big­gest in­crease was recorded in rooi­bos tea, which was 18.5% more ex­pen­sive than it was this time last year. Black tea was up by 4.9% but cof­fee beans dropped by 1%.

Buy a Tesla, boet

Elon Musk, days af­ter an­nounc­ing that he had no re­spect for United States fi­nan­cial reg­u­la­tors, treated South Africans to the news that his Tesla elec­tric ve­hi­cles could be avail­able lo­cally by the end of next year.

Musk caused a furore in a tele­vi­sion in­ter­view on 60 Min­utes, in which he ex­pressed his con­tempt for the Se­cu­ri­ties and Ex­change Com­mis­sion, re­port­edly say­ing: “I want to be clear, I do not re­spect the SEC.”

It had been in­ves­ti­gat­ing Musk for se­cu­ri­ties fraud af­ter a tweet sug­gest­ing Tesla would be go­ing pri­vate at $420 a share — a pre­mium on the price at the time — and that fund­ing had been se­cured. The tweet sent the share price ca­reen­ing. Musk set­tled with the SEC in Septem­ber by agree­ing to pay a $40-mil­lion penalty and to step down as Tesla board chair­per­son.

It is not the only con­tro­ver­sial thing he has said and done this year. Oth­ers in­clude fa­mously de­scrib­ing ques­tions from an­a­lysts on an in­vestors’ con­fer­ence “bor­ing” and bone­headed, and ap­par­ently smok­ing weed dur­ing a podcast in­ter­view.

But it was Musk’s re­ply to a query on Twit­ter that has cap­tured lo­cals’ at­ten­tion. Asked when a Tesla deal­er­ship would be opened “back home, boet”, Musk tweeted back “Prob­a­bly end of next year”.

Now all we need is for Eskom to keep South Africa’s elec­tric­ity flow­ing.

Cor­rec­tion

In last week’s edi­tion of the Mail & Guardian, in the ar­ti­cle ti­tled “Strug­gling in­vest­ments sting PIC”, we used the in­cor­rect name for Mervin Muller, the ex­ec­u­tive head for pri­vate eq­uity and struc­tured in­vest­ment prod­ucts at the Pub­lic In­vest­ment Cor­po­ra­tion. We re­gret the er­ror.

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