With the 19th Annual MTN South African Music Awards (SAMAs) around the corner, the focus of the entertainment industry once again shifts to the top performers within the South African music recording industry.  The Recording Industry of South Africa (RISA) is responsible for arranging the annual SAMA awards show.  RISA is a trade association that represents the collective interests of producers of music sound recordings and major and independent record labels/companies in South Africa.

The SAMAs has grown to become one of the highlights on the annual entertainment calendar in South Africa and big business is joining the party at the Sun City Superbowl this year as usual.  Brand association with the event and the promotion of a commitment to the development of the music industry in South Africa make this a very important commercial and cultural event, apart from the celebration of our top local recording music talents. 

RISA and the SAMAs are going from strength to strength; they are here to stay and are supported by big business and government.  Since the digital revolution which followed technological advances after the advent of the internet, the recording industry has faced many serious problems which include losses of revenue due to dwindling (physical) record sales and rampant piracy.  These issues remain today, but the so-called death of the music recording labels and industry which were prophesied in popular media, news and social discussions, were premature in the view of the writer.  The growth of RISA, the SAMAs and the commercial success stories of many of the artists nominated for awards each year are testament to this.

It holds true that the so-called digital revolution changed the landscape of the recording industry forever and, in that sense, the traditional record label did die. May it rest in peace.  The old business model of creating physical records and utilizing international distribution channels to supply consumers with physical product and promotional material has expired.  The recording industry has always been at the forefront of creation and innovation and the assumption that the industry would not be able to adapt and revolutionize its own business models to ride the digital wave (and surf it well) was not based in fact.

Record labels adapted their approach to the signing of artists and nowadays they take a much more global approach in creating, managing and maximizing revenue streams for their signed artists (and of course sharing in those revenues which are certainly no longer limited to actual record sales).  Successful recording artists have many different sources of revenue nowadays (in addition to a percentage share in actual record sales).  These include performance and appearance fees, film and television synchronization deals (the film industry can pay an artist and their label vast amounts for the licensed use of a recorded song in a feature film); sponsorships, merchandising deals and so forth.  Record labels are starting to become actively involved in all fields of potential commercial promotion and exploitation of their signed artists’ image rights as well as the maximization of profits from music publishing (the exploitation of rights in original musical compositions and lyrics).  All major labels have their own music publishing companies which are either subsidiaries or partners in the same global corporate structure.  Make no mistake, music production and recording is big business.

If you remain a sceptic about the viability and relevance of the music recording industry in the digital age, it is my suggestion that you tune in to the SAMAs this Saturday evening to witness the continued growth, development and investment in one of the most important and recognized industries in the entertainment world.

By Stephen Hollis, senior associate, Adams & Adams