Music Industry Thesis Oct 2010

An investigation into the level of support for local music
compared to international music in South Africa.
Developed by
KENNETH LAWRENCE 204175771
MICHAEL JONES 209199679
TERENCE CONRADIE 209158034
Assignment 1 submitted in partial fulfilment of the requirements for the degree
Baccalaureus Technologiae: Marketing
in the Faculty of Business
at the Cape Peninsula University of Technology
Lecturer: R. Duffet
Cape Town
18 October 2010

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DECLARATION
I, KENNETH LAWRENCE 204175771, declare that the contents of this proposal represent my own
unaided work, and that the dissertation/thesis has not previously been submitted for academic
examination towards any qualification. Furthermore, it represents my own opinions and not
necessarily those of the Cape Peninsula University of Technology.
Signed Date
I, MICHAEL JONES 209199679, declare that the contents of this proposal represent my own
Signed Date
I, TERENCE CONRADIE 209158034, declare that the contents of this proposal represent my own
Signed Date

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ABSTRACT
Prior to 1994 many bands, including solo musicians, duplicated or covered songs done by
international musicians. As a result of apartheid, social and economic sanctions, conditions for
operating as a normal society were far from ideal. This marginalised the citizens of South Africa in
their thoughts and actions. These restrictions and inadequate access to information marginalised
South Africa as a whole but it also impacted on the creativity of its musicians. Added to this was a
society that was conditioned to hearing and identifying with international music.
The South African music industry has changed significantly since the democratisation of the country
in 1994. The country has moved out of an environment where political sanctions restricted and
isolated us from the rest of the world. Even though much has changed, SA is, as quoted by Mr.
Nelson Mandela, still “in the momentum of Apartheid”. Hence, even though SA have democratised the
effects of the past are still felt and will be for a long time and until then SA need to make every effort
to curtail the negative culture inherited from our past. The discriminating practices within the music
industry bear testament to this legacy.
This recognises the political, social and the impact that sanctions have played on South Africa. We
acknowledge and appreciate that various initiatives such as Cultural Industries Growth Strategy
(CIGS) and also the music representative bodies such as South African Music Rights Organisation
(SAMRO) and the work they do. However, we question the commitment and effectiveness thereof. It
is also good to see that media interest in local music and reporting thereon has increased. The buy-in
from media, such as radio and television, which is arguably the most powerful tool in publicising, is
not where it should be in terms of the targeted airplay ratio set out by government policy.
The argument goes back and forth that sales of South African artists do not justify the investment, but
where do we start? In order to generate sales you need a market as one does not exist without the
other. A large potential market for local music does exist; it is a question of overcoming the barriers in
relation to the perceptions that the consumer has. Our approach is to identify the attitudes and
motivations of why South Africans purchase music and their decisions and requirements when
considering the purchase of local music. The aim is to draw attention to these needs so that all
industry players will give the necessary attention in support of them. A different approach in marketing
South African music to South Africans. If SA are to make this industry a viable and sustainable one
we must move away from the practices and prejudices of the past and support what is “home grown”.
Through this work the thesis it is expected that a clearer understanding of the market expectations
and perhaps clarify the roles and obligations of the industry players to actively engage with one
another in a way that will be cognisant of the market preferences and perceptions. They will,
hopefully, be able to take direction in formulating their plans and strategies so that they can
meaningfully begin to shape the behaviour of the South African music consumer.

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TABLE OF CONTENTS
CHAPTER ONE: OVERVIEW OF THE MUSIC INDUSTRY....................................................1
1.1 Introduction.....................................................................................................................1
1.2 Why is this industry interesting?......................................................................................1
1.3 Research problem statement..........................................................................................2
1.3.1 Sub-problems ........................................................................................................2
1.3.2 Background to the research problem.....................................................................2
1.3.3 The reports three objectives. .................................................................................3
1.4 Research problem question ............................................................................................3
1.4.1 Primary research problem question.......................................................................3
1.4.2 Secondary research questions ..............................................................................3
1.5 Primary Objective............................................................................................................4
1.5.1 Secondary research question ................................................................................4
1.5.2 Secondary Objectives............................................................................................4
1.6 Delimitations ...................................................................................................................4
1.7 Research methodology...................................................................................................5
1.7.1 Research design....................................................................................................5
1.7.2 Sampling................................................................................................................5
1.7.3 Data collection methods...............................................................................................5
1.7.3.1 Interviews....................................................................................................................5
1.7.3.2 Questionnaire..............................................................................................................5
1.7.4 Data analysis .........................................................................................................6
1.7.5 Limitations .............................................................................................................6
1.8 Literature review ..........................................................................................................6
1.8.1 The music representatives and legislative aspects................................................6
1.8.2 Link in the music industry and vertical integration..................................................7
1.8.3 Viability of the local music industry ........................................................................7
1.9 Significance of the research............................................................................................8
1.10 Expected outcomes, results and contributions of the research....................................8
1.11 Summary .....................................................................................................................8
CHAPTER TWO: LITERATURE REVIEW THE SOUTH AFRICAN MUSIC INDUSTRY.......10
2.1 Introduction...................................................................................................................10

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2.2 The Music Representatives ..........................................................................................10
2.3 Legislation and Administration ......................................................................................10
2.3.1 Recording rights..................................................................................................10
2.3.2 Registration of works ...........................................................................................11
2.4 Link to the music industry ............................................................................................11
2.5 Vertical and Horizontal Integration................................................................................12
2.6 Distribution....................................................................................................................13
2.7 The Music Industry Business ........................................................................................13
2.7.1 The Composer and the Musician.........................................................................13
2.7.2 Live Performance.................................................................................................14
2.7.3 Record Companies..............................................................................................14
2.7.4 The Retailer and the Broadcaster........................................................................14
2.7.5 Promotion and Publicity .......................................................................................14
2.8 The Domestic and International Market ........................................................................15
2.9 The music industry comprises of the following aspects ................................................15
2.10 South African music in different regions.....................................................................16
2.11 Future Developments.................................................................................................17
2.11.1 Internet ................................................................................................................17
2.11.2 Electronic media access ......................................................................................17
2.12 Symptomatic aspects faced by local musicians .........................................................18
2.12.1 Artist recognition..................................................................................................18
2.12.2 Business skills of Artist ........................................................................................18
2.12.3 International profit before local commitment. .......................................................20
2.12.4 Record Companies..............................................................................................20
2.12.5 Promotional support for international music “cash cows”.....................................20
2.13 South African Musicians need to take ownership.......................................................20
2.13.1 Self promotion......................................................................................................20
2.13.2 Marketing.............................................................................................................21
2.13.3 Channel expansion..............................................................................................21
2.14 Support from industry role players needed ................................................................21
2.14.1 Play list influencing ..............................................................................................21
2.14.2 Broadcasting........................................................................................................22
2.14.3 Archaic mindsets .................................................................................................22
2.14.4 Distribution channel monopoly.............................................................................22

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2.14.5 Financial strength ................................................................................................23
2.15 Government commitment...........................................................................................23
2.15.1 Legislation ...........................................................................................................24
2.15.2 Passion................................................................................................................24
2.16 SWOT........................................................................................................................25
2.16.1 Strengths .............................................................................................................25
2.16.2 Weaknesses ...............................................................................................................26
2.16.3 Opportunities ..............................................................................................................26
2.17 International best practice..........................................................................................26
2.17.1 Australia...............................................................................................................27
2.17.2 Canada................................................................................................................27
2.17.3 Taxation...............................................................................................................28
2.17.4 Blank tape levies..................................................................................................28
2.18 National support programs.........................................................................................28
2.19 Summary ...................................................................................................................29
CHAPTER THREE: SOUTH AFRICAN MUSIC INDUSTRY..................................................30
3.1 Introduction...................................................................................................................30
3.2 History........................................................................................................................30
3.3 Types of music in SA ....................................................................................................31
3.3.1 Gospel .................................................................................................................31
3.3.2 Afrikaans..............................................................................................................31
3.3.3 Pennywhistle jive .................................................................................................32
3.3.4 Soul and jazz .......................................................................................................32
3.3.5 Punk rock.............................................................................................................32
3.3.6 Disco....................................................................................................................32
3.4 A new era in music for SA ...................................................................................33
3.4.1 A structured music industry .................................................................................33
3.4.2 Recognition of SA musicians ...............................................................................34
3.5 Communication trends 2010 .........................................................................................34
3.6 Sales Trends and Data ..............................................................................................35
3.6.1 Sales....................................................................................................................35
3.6.2 Data.....................................................................................................................36
3.6.3 Trends .................................................................................................................37

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3.7 Factors that have a direct impact on music sales .........................................................38
3.7.1 Choice and Availability.........................................................................................38
3.7.2 Portability.............................................................................................................38
3.8 TV and Radio - consumption patterns...........................................................................39
3.8.1 Television ............................................................................................................39
3.8.2 Radio ...................................................................................................................40
3.9 Market share of the music industry in SA......................................................................43
3.10 Recording Industry of South Africa (RiSA).................................................................44
3.11 Digital.........................................................................................................................44
3.12 Piracy.........................................................................................................................45
3.12.1 What is Music Piracy? .........................................................................................45
3.12.2 Categories of Music Piracy ..................................................................................45
3.12.3 Simple Piracy.......................................................................................................46
3.12.4 Internet Piracy......................................................................................................46
3.12.5 Counterfeit ...........................................................................................................46
3.12.6 Bootlegs...............................................................................................................46
3.13 Enforcement...............................................................................................................46
3.14 Awareness and Education .........................................................................................46
3.115 Summary ................................................................................................................47
CHAPTER FOUR: PREVIOUS RESEARCH ON MUSIC ......................................................48
4.1 Introduction...................................................................................................................48
4.2 Government Schools ....................................................................................................48
4.3 Montefellaz ..................................................................................................................48
4.3.1 Montefellaz figures on South African music growth .............................................49
4.3.2 Monfellaz survey findings ...................................................................................50
4.4 The Department of Arts, Culture, Science and Technology. ........................................51
4.5 ICASA chargers local radio stations...........................................................................52
4.6 Digital piracy among youth in South Africa ................................................................52
4.6.1 Determinants of Digital Piracy among Youth in South Africa findings..................53
4.7 Impact caused by digital piracy.....................................................................................53
4.8 Digital Rights Management...........................................................................................54
4.9 Piracy overshadows rising digital music sales ..............................................................54

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4.10 Local artists around the world are suffering ...............................................................54
4.11 Government and businesses intervening...................................................................55
4.12 Digital music sales increase.......................................................................................55
4.13 Accessing digital music..............................................................................................55
4.14 Summary ...................................................................................................................56
CHAPTER FIVE: RESEARCH METHODOLOGY..................................................................57
5.1 Introduction...................................................................................................................57
5.2 Research Methodology.................................................................................................57
5.3 Reasons for deciding on qualitative and quantitative research .....................................57
5.4 Data collection ...........................................................................................................58
5.5 Research definition .......................................................................................................59
5.6 Data analysis .............................................................................................................59
5.6.1 Difficulties and problems experienced .................................................................59
5.6.2 Interpretation the data..........................................................................................60
5.6.3 How many interviews is enough? ........................................................................60
5.7 Sample size ..................................................................................................................61
5.7.1 Sample size formula ............................................................................................61
5.7.2 Sample size calculation .......................................................................................61
5.8 Summary ......................................................................................................................62
CHAPTER SIX: RESULTS ....................................................................................................63
6.1 Preliminary Synopsis of Quantitative survey.................................................................63
6.2 Quality perception of SA music.....................................................................................64
6.3 Price parity perception of SA music ..............................................................................65
6.4 Learning’s from international artists ...........................................................................66
6.5 Enjoy international music above local...........................................................................67
6.6 Are local performances good ........................................................................................68
6.7 Is information about the local artist readily available.....................................................69
6.8 SA artists are not good role models..............................................................................70
6.9 Are local artists as good as international artists............................................................71
6.10 Demographics............................................................................................................72

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6.11 Race ..........................................................................................................................73
6.12 Age ............................................................................................................................74
6.13 Memory recall of artists known to the target market...................................................75
6.14 How the target market access their music .................................................................76
6.15 Preliminary Synopsis of Qualitative survey ................................................................77
6.15.1 Findings of artists’ survey. ...................................................................................77
6.15.2 Comparative assessment ....................................................................................77
6.15.3 Observations........................................................................................................78
6.16 Summary ...................................................................................................................78
CHAPTER SEVEN: FINDINGS OF RESEACH DATA...........................................................80
7.1 Introduction...................................................................................................................80
7.2 Identifying the perceptions of the South African market................................................80
7.2.1 The impact of political sanctions..........................................................................81
7.2.2 The influence of Technology................................................................................81
7.2.3 The power of marketing campaigns.....................................................................82
7.2.4 The influence of International collaboration .........................................................82
7.2.5 The opportunity to attend live performances........................................................83
7.3 To understand why those perceptions exist and how these perceptions can be altered...
......................................................................................................................................84
7.3.1 Purchase power...................................................................................................84
7.3.2 Piracy...................................................................................................................84
7.3.3 Technology growth ..............................................................................................85
7.3.4 Exposure .............................................................................................................85
7.4 To understand South African market expectations. ......................................................87
7.4.1 Collaboration of the music industry strategies. ....................................................87
7.4.2 Product pricing strategy.......................................................................................87
7.5 To understand how effective the combined music industry strategies are and how
sustainable are they......................................................................................................88
7.5.1 Broadcasting media.............................................................................................89
7.5.2 Identifying the perceptions of the South African market.......................................90
7.6 To understand why overseas artists are more successfully marketed..........................90
7.6.1 There is little support from media i.e. radio and the South African consumers ....90
7.6.2 Government commitment ....................................................................................91
7.6.3 Live Entertainment...............................................................................................91

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7.6.4 Lack of finance or experience..............................................................................91
7.6.5 Negative publicity.................................................................................................92
CHAPTER EIGHT: CONCLUSION AND RECOMMENDATIONS .........................................93
8.1 Introduction...................................................................................................................93
8.2 Identifying the perceptions of the South African market................................................93
8.2.1 Recommendation to the impact of political sanctions ..........................................93
8.2.2 Recommendation for the influence of Technology...............................................94
8.2.3 Recommendation to the power of marketing campaigns .....................................94
8.2.4 Recommendation for the influence of International collaboration ........................94
8.2.5 Recommendation for the opportunity to attend live performances.......................94
8.3 To understand why those perceptions exist and how these perceptions can be
altered........................................................................................................................95
8.3.1 Recommendation on Piracy.................................................................................95
8.3.2 Recommendation for increased Exposure...........................................................95
8.4 To understand South African market expectations. ......................................................96
8.5 To understand how effective the combined music industry strategies are and how
sustainable are they......................................................................................................96
8.5.1 Recommendation on broadcasting media ...........................................................96
8.5.2 Recommendation on Blank CD levy ...................................................................97
8.6 To understand why overseas artists are more successfully marketed..........................97
8.6.2 Recommendation for lack of finance or experience.............................................97
8.6.1 Ombudsman ........................................................................................................98
8.7 Conclusion....................................................................................................................98
Reference List........................................................................................................................99
Appendix 1 Target Audience Profiling Questionnaire .....................................................104
Appendix 2 Target Audience Profiling Artist Questionnaire ............................................105

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LIST OF FIGURES
Figure 2.1: Linkages in the music industry .........................................................................................12
Figure 2.2: Gallo Africa and Polygram’s Ownership Structure............................................................12
Figure 2.3: Understanding Copyright..................................................................................................15
Figure 6.1: Frequency of music listenership.......................................................................................63
Figure 6.2: Quality perception of SA music .......................................................................................64
Figure 6.3: Price parity.......................................................................................................................65
Figure 6.4: Learnings from international artists ..................................................................................67
Figure 6.5: Enjoy international music above local...............................................................................67
Figure 6.6: Are local performances good ...........................................................................................68
Figure 6.7: Availability of local product...............................................................................................69
Figure 6.8: SA artists’ role model assessment ...................................................................................70
Figure 6.9: Are local artists’ as good as international artists’ ..............................................................71
Figure 6.10: Demographics................................................................................................................72
Figure 6.11: Race ..............................................................................................................................73
Figure 6.12: Age ................................................................................................................................74
Figure 6.13: Artists known to the target market ..................................................................................75
Figure 6.14: Methods of accessing music ..........................................................................................76
LIST OF TABLES
Table 2.1: SWOT on South African Music Industry adapted from (CIGS, 2008:77) 25
Table 3.1: Growth of Media Opportunities in South Africa 37
Table 3.2: International vs local units sold in South Africa for 2007 38
Table 3.3: The market: TV competitor with 55 channels to be launched in May 40
Table 3.4: National radio stations 42
Table 3.5: Regional stations 42

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LIST OF ABBREVIATIONS AND ACRONYMS
ACOSA African Cultural Organisation of South Africa
AFPRO African Promoters Organisation
ASAMI The Association of the South African Music Industry
BASA Business and Arts South Africa
CIGS Cultural Industries Growth Strategy
DACST Department of Arts and Culture, Science and Technology
FACTOR The Foundation to Assist Canadian Talent on Records
GEAR Growth, Employment and Redistribution
MIDI Music Industry Development Initiative Trust
MUSA Musicians Union of South Africa
NAC National Arts Council
NORM National Organisation for Reproduction Rights in Music in Southern Africa
PANSA Performing Arts Network of South Africa
MFP Music for Pleasure
R&B Rhythm and Blues
RISA Recording Industry of South Africa
SA South Africa
SA-APRS The South African Association of Professional Recording Studios+
SABC South African Broadcasting Association
SAM South African Music and Entertainment
SAMPA South African Music Promoters Organisation
SAMRO South African Music Rights Organisation Limited
SARA South fracas Roadies Association
SARA The South African Roadies Association
SARRAL South African Recording Rights Association Limited
SMMEs Small Medium Enterprises
TRIPS Trade-Related Aspects of Intellectual Property Rights

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CHAPTER ONE: OVERVIEW OF THE MUSIC INDUSTRY
1.1 Introduction
South African music has come a long way since the early nineties. This period was the height of the
cover (bands playing international artists’ music). All musicians had little or no choice about what they
would perform, especially original material, as the expectation was that they would cover songs that
were internationally popular at the time. Today, we wonder where those bands like ‘Walk This Way’,
‘Mango Groove’ and many others that have recently come through the talent shows, are. Our interest
is based from our direct and indirect love and interest in music and the need to understand why South
African music does not enjoy the hype and exposure that the international counterparts enjoy. More
specifically the Thesis will be limited to artists residing in the Cape Town / Western Cape region as a
significant amount of the top artists i.e. Vicky Sampson, Brenda Fassie and Jonathan Butler, all have
their roots in Cape Town South Africa. The current unfavourable music climate is entrenched in the
poor marketing and promotions campaigns. In an effort to try and gain a better understanding and to
see if there is any correlation between the marketing effort and consumer perception. The research
will look at the youth support base between ages 16 years old and upward as well as established and
non established artists. It will target tertiary institutes as they will conveniently be representative of the
target audience.
1.2 Why is this industry interesting?
“Music is an essential component of life” (CIGS, 1998). Every aspect of our lives is touched by music.
Music has been with us since the dawn of life, it is in the rustle of the leaves, and the breaking of the
waves as it comes ashore, the whistle of the wind, roaring of thunder and the caring tone of your love
ones voice. Music is our common thread, it is what binds us, inspires, lift our spirits, it is what moves
us to action, allows us to connect with our souls and people allowing us to share memories and
experiences, music is the balancing energy that reconnects us with ourselves and the universe.
Music is an integral part of our being and accompanies celebrations such as birthdays and marriages.
It is to be found and present in all aspects of our lives for personal, social purposes creating the
atmosphere to connect and engage with others. It has been there at the time of our ancestors in the
beating of the drum and singing of traditional songs to win political favour and to carry stories of our
ancestry. Music is powerful and it is through the sounds and words of songs like ‘Sophiatown’ and
‘Meadowlands’ that elders can remember, and the youth can imagine, past lives and has the capacity
to transform individuals and society shaping behaviours and culture. Understanding this in the context
of the local market in the responses and the impact it has had especially since 1994 when South
Africa becomes globally connected.

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1.3 Research problem statement
South African musicians do not to enjoy the same level of support as that of international music artist.
1.3.1 Sub-problems
 Low awareness of consumers about South African artists in terms of live performances and
shows.
 Local music artists are not as prominent in local media.
 Access to local music is limited for the consumer at retail outlets.
 Insufficient support in terms of promotional activity from record labels and agents.
 No or little support from established artist for one another.
 The problem of payola plays on preferential air play.
 Not enough local artists having needle-time on major radio stations. Galane (2006) stated
that local radio presenters do not feel comfortable with playing local music.
 South Africans tend to support international music ahead of local artists of the same genre or
calibre.
1.3.2 Background to the research problem
In light of the current local music industry we find and question why local artists do not get the same
recognition as international artists. Galane (2006) said that artists are not taken seriously and
recording labels always make them (the artists) behave according to how the labels want them to.
There is also some concern around what has happened to the bands of yesteryear and those who
have just recently been exposed in popular talent search programs such as ‘SA’s Got Talent’ and
‘Pop Idols’. Where are these musicians and why and what is it that makes them less successful than
their international counterparts?
The Thesis reference the CIGS report in an effort to critically analyse this sector to better understand
the obstacles that prevent the music industry flourishing research into the workings of the Music
industry was conducted in a report released in 1998 with the following objectives.

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1.3.3 The reports three objectives.
The first objective is to understand and explain the structure and functioning of the South African
music industry with a view to identifying its areas of strength and weakness.
In achieving this objective the report draws on:
 International and national level statistics;
 Interviews with central figures in the South African music industry; and
 International studies of the music industry.
This analysis then lays the foundations for the second objective which is the development of an
industrial strategy to support and assist the growth of the domestic music industry.
The third and final objective of this report is to stimulate discussion both within the music industry and
between the music industries, government and other interested organisations as to what projects and
processes would be most useful in building the South African music industry (CIGS, 1998).
The significance of the delivery mechanisms such as radio stations, retail, live music and cultural
quarters are critical to the success of any cultural industry. These delivery mechanisms will give the
consumer the necessary information on availability necessary to drive consumption (CIGS, 1998).
The question becomes, how far have we come with the development and the implementation of the
various strategies? Quite a bit has been written on the reasons from quality of productions, industry
commitment, lack of financing capacity and the intimation is that this directly impacts the market
demand (Kerr, 1994). Does this, what aspects influence consumer behaviour, what other avenues
can be explored? In an effort to establish market equilibrium the research aims to identify the key
aspects that will aid in bridging the gaps between perception and expectation with the current reality
of the music industry and the current state of the market.
1.4 Research problem question
1.4.1 Primary research problem question
Why do South African consumers support international artists ahead of local artists?
1.4.2 Secondary research questions
 What are the perceptions toward local music and why do they exist?
 What are the expectations of South African’s local music?

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 Where and how do the South African access music?
 What opportunities exist for South African musicians to promote themselves?
1.5 Primary Objective
To understand why there is a modest appetite for South African music artist, what the contributing
factors are and how this can be reversed.
1.5.1 Secondary research question
How effective has the collaborative music industry strategies been to create a music industry that is
sustainable and embraced by the broader community.
1.5.2 Secondary Objectives
 To identify the perceptions of the South African market.
 To understand why those perceptions exist and how these perceptions can be altered.
 Bring attention to the market and Industry and their role in influencing the identified areas.
 To understand South African market expectations.
 To understand why overseas artists are more successfully marketed.
 To understand how effective the combined music industry strategies are and how sustainable
are they.
1.6 Delimitations
Information on the industry is quite extensive with regard to news articles but the articles and reports
although broad are not specific and do not deal with topics relating to our research question.
The area of research has been restricted to the Western Cape, South Africa as this allows us to
manage our research by limiting the area covered due to limitations of the scope of research.
Although the area is limited to the Western Cape similar results will be true for all of South Africa.
The interviews will be conducted with established and up and coming artists and the identified target
audience located in various tertiary institutes. The basis of the research methodology will be
qualitative and quantitative how they may or may not coincide with each other in order to draw a
common thread that may or may not substantiate the date collected.

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1.7 Research methodology
This will be done using the qualitative and quantitative methodology. Guidance will be taken as
prescribed in the publication completing your qualitative dissertation, a road map from beginning to
end by (Bloomberg and Volpe, 2008).
1.7.1 Research design
A survey will be done in the form of a qualitative questionnaire with 7 questions being asked. As each
recording company has different approaches the outcomes may differ but the interviewer will lead the
process therefore the interview will be guided by the response to the set questions. The focus will be
to ask open ended questions. The design will take the form of face to face interviews with people in
the industry. Research will be a combination of qualitative and quantitative i.e. mixed method
application.
1.7.2 Sampling
The questionnaire will be designed for the general public which will sample a representative cluster of
the local community. An additional questionnaire will designed to extract information from industry
representatives, more specifically musicians. All possible leads or references will be followed up and
interviews conducted to understand various experiences by artists.
Market sample will be the public of the Western Cape and students at the following institutes:
 Cape Peninsula University of Technology
 Stellenbosch University
 University of the Western Cape
1.7.3 Data collection methods
1.7.3.1 Interviews
The interviews will be conducted with prominent Cape Town based artists.
1.7.3.2 Questionnaire
The questionnaire will be designed to elicit information from the general public and industry players. It
will try to understand the perceptions, attitudes and motivations of the interviewees and identify their
expectation and preferences.

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1.7.4 Data analysis
Trustworthiness and validity of the research
Senior management like CEOs, MDs and people employed within the industry will be targeted to
validate the trustworthiness. Credentials will be confirmed by people within the industry. Top radio
stations will be targeted to draw on their success story with the hope of revealing and gaining an
insight to why and what it is that that makes them successful. Established, reputable and long
established musicians will be interviewed to gain an insight of the industry through the exposure and
experience with a view to understand their expectations and possible solutions.
1.7.5 Limitations
The possible limitations will be marginal as the audience sample will be drawn in Cape Town. The
research will minimise this by obtaining a broad random base of participants at the sample location.
With regard to musicians, although we have identified three high profile musicians we will need to also
conduct interviews with un-established artists. In order to identify these prospects it will take leads
from the interviewees.
1.8 Literature review
The section below has looks at the key elements of the music industry. The section discussed
highlights a variety of sectors and services that radiate out from these core sectors. It illustrates how
all these elements are connected and suggest that through the strengthening throughout the entire
value chain that South African music will become a truly global player. It also looks at the challenges
that musician face and what aspects they themselves need to look at in order to actively engage the
industry as well as the various channels for their works. Some of the areas covered are:
1.8.1 The music representatives and legislative aspects
Here a number of industry bodies are listed highlighting their role in the industry. Essentially the roles
of these bodies are representatives for the industry in to provide the necessary support for developing
artist. Amongst these are bodies are those set up to control and monitor the works and use of the
artist to ensure legitimate use and the collection of any royalties that may be owned to the artist.
Various strategic initiatives undertaken to examine the health of the industry in an effort to develop a
strategic plan of action to transform the industry. Various business international models including tax
incentives and strategy implementation are reviewed to identify the elements that have worked in
those counties. The models seem practical and could possibly be a replicated in SA given the right
commitment.

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1.8.2 Link in the music industry and vertical integration
Linkages between different aspects of the music industry are explored in terms of where it originates
from conceptualisation in the form of publishing right through to the end f the supply chain i.e. retail
outlets. The distribution channels and ownership thereof is also scrutinised in an effort to understand
the process and to possibly uncover the shortcomings in the value chain. Our review of the current
ownership in the distribution system will show a tightly controlled system that is in the ownership of a
few key players.
1.8.3 Viability of the local music industry
Overall the research also looks to assess what the current climate for local artist is. It assesses all
previous research and articles past and present and looks at employment opportunities and the
propensity for local music. Further to this the research also seeks to understand the general
perception artist, general public and the industry players have about the industry and if and how those
perception impact on the industry either positively or negatively. The thesis also aims to understand
and identify the role and responsibility that record companies and broadcasting media play and the
impact they could potentially have. Information about these industries practices and their broad
population reach. They have an important role in creating awareness, generating interest and
development of the industry locally and abroad. Agreeably promotional and marketing is all about
building the brand equity of local music; but the ramifications is wide spread in that it stimulates
growth opportunities by raising sales volumes, employment and elevating the skills set requirement to
deliver a product that will meet the expectations of the consumer. The level of promotional and
marketing of local artist are compared to that of international artist specifically around the lack of
promotional spend and the quality of the programs that are delivered.
The qualitative method will be used in a form of questionnaire with set questions. When references
are given the snow balling effect will be adopted to compile further data. Interviews will be conducted
at the people’s place of work with appointments being made. As mentioned a mixed methodology will
be applied in data collection which will include interviews, literature and questionnaires in an effort to
identify any correlation of data.

8
1.9 Significance of the research
The research will hold great significance to the industry and all its role players as a whole. In
conducting this research the industry will hopefully begin to understand the challenges on a more
fundamental level affecting music industry participants. In investigating market expectations research
may begin to understand what areas of the music industry have contributed to institute the market
behaviours. The hope is that the industry can have an honest look at their culpability, development
strategies and support music initiatives. These findings are intended to raise the awareness, stimulate
interest, identify and advance growth opportunities for all from musicians to record labels and
corporate partners alike. In identifying the shortcomings better thought can be given in aligning
marketing, sales promotions and event planning that is able to identify with the market expectations. It
is also the aim to bring local music across as a passion point that the market not only identifies with
but subscribes too.
1.10 Expected outcomes, results and contributions of the research
The aim of this proposal is to outline the key aspects of what the gaps in the music industry are. The
shortfalls will not only pertain to the challenges that musicians face but will also form a platform on
which industry will take into consideration when they embark on marketing and promotions
campaigns. Buying patters of the youth are and understand the motivations behind those buying
patters may also be revealed from the research. The aim is also to develop a marketing do it yourself
flow chart that will give guidance to the individual artist in order to assist them in self promotion. Artist
through this process will be able to voice their concerns and in turn this will also assist them in finding
solutions to overcome these obstacles.
1.11 Summary
In conclusion the research proposal starts out with the research problem statement of South African
musicians do not to enjoy the same level of support as that of international music artist. The problem
statement was derived from our extensive reading and our direct involvement in the music industry.
The problems identified are vast and varied and range from the lack of government commitment and
enforcement in terms of the policies that have been developed. Media apathy and disinterest deprive
the local musicians of a very powerful platform to market themselves and their product. Control of the
distribution channel is firmly in the hands of the few big record industry players who dictate what is
pushed into the market i.e. retail stores. The question of financing and investing, whether it be through
record deals to cut records or through marketing activities is complex because with investment comes

9
the implication of a return on that investment and the return is a problem linked to sales and demand
liked to marketing and so the circle continues.
The proposal attempts to understand what is in the hearts and minds of the of the South African
music consumer. We believe that as an important starting point, a bottom up approach is required in
order for us to get to grips with the demand and propensity for local music. An understanding of what
is happening on the ground is fundamental if you want to ensure that all that your resources and plans
are utilised in the most effective and efficient way possible.
The survey will be conducted done by way of a questionnaire with the intention of extracting
information about the consumers view point of the local music industry. The questions are structured
to identify the knowledge, awareness, beliefs and interest in South African music. We hope to
recognise some correlation in the answers and bring a resolution to close any gaps.

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CHAPTER TWO: LITERATURE REVIEW THE SOUTH AFRICAN MUSIC
INDUSTRY
2.1 Introduction
The section below has looks at the key elements of the music industry. The section discussed
highlights a variety of sectors and services that radiate out from these core sectors. It illustrates how
all these elements are connected and suggest that through the strengthening throughout the entire
value chain that South African music will become a truly global player. It also looks at the challenges
that musician face and what aspects they themselves need to look at in order to actively engage the
industry as well as the various channels for their works.
2.2 The Music Representatives
The main Institutions in the South African Music Industry (CIGS, 1998 & de Villiers, 2006: 5) as listed
below play a significant role of control and regulating the collection of royalties through live
performance, air play and publishing rights.
 African Promoters Organisation (AFPRO). AFPRO represents South African promoters.
 The Association of the South African Music Industry (ASAMI). ASAMI represents the
manufactures ASAMI is funded by the revenues from the manufacture of music.
 Music Industry Development Initiative Trust (MIDI). This organisation is privately funded and
has as its area of concern the development of the music industry, through the training of
musicians.
 South African Recording Rights Association Limited (SARRAL)
 South African Music Rights Organisation Limited (SAMRO)
2.3 Legislation and Administration
2.3.1 Recording rights
South Africa has embraced the requirements of the rights of composers in the Copyright Act by being
a member of the International Convention on Copyright. One of the main sources of income for an
artist would be the protection received from the copyright act. South Africa has a number of member
societies representing the work and performance rights of composers as mentioned above. The
agencies are of critical importance. There main responsibility is to ensure artists receive revenue that
is to them and prevents exploitation of their rights, as defined by the Copyright Act.

11
In South Africa, the South African Recording Rights Association Limited (SARRAL) and the National
Organisation for Reproduction Rights in Music in South Africa (NORM) represent the mechanical
rights of authors. Royalties are collected by the organisation by the number of copies that are
produced annually and also from a variety of other sources including the national broadcaster and the
recording of music programmes for ‘in-house’ music. The South African Music Rights Organisation
(SAMRO) represents the public performance rights of the musical composition and collects revenue
from the public performance of a composition. This is done by broadcasters submitting play lists and
musicians submitting cue sheets that detail the songs that they have played at any given venue. In
essence SAMRO monitors the use of music (CIGS, 1998).
2.3.2 Registration of works
Authors and publishers of music need to register SARRAL and SAMRO in order for them to operate
efficiently. This process of registration is done by a composer submitting a ‘Notification of Works’ and
the publisher also has to put in a ‘publishers notification’. The registration process is complicated by
high levels of illiteracy and unfamiliarity with administrative procedures amongst composers resulting
in many not being registered and not paid accordingly for work produced (CIGS, 1998).
The research CIGS 1998 report uncovered that there are inefficiencies in the distribution of royalties
to the rights holders. This inefficiency is related to a number of factors:
 Failure to register their songs with the copyright collection agencies.
 The limited understanding of copyright administration and understanding of agency roles.
The challenge remains in improving the understanding and functioning of copyright
collection agencies in an effort to minimising the conflict over royalty distribution.
2.4 Link to the music industry
Linkages between different aspects of the music industry are illustrated in the figure 2.1 below. The
starting point of the process shows that it is the originators, individual or groups of individuals who are
the starting point of the industry. The various music industry sectors are engaged to facilitate the
success of the musician’s work by providing a national and international network of manufacturing,
distribution and marketing. Information is reported directly to record companies who may or may not
provide the artist with information for promotion purposes.

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Figure 2.1: Linkages in the music industry
Source: CIGS 1998:25
2.5 Vertical and Horizontal Integration
Record companies monopolise the industry by having a big impact on the value chain. The phases of
production in the music industry are manufacturing, recording, mastering, pressing of multiple copies,
distribution and retailing. The major producers own a significant proportion of the facilities in each
aspect of the value chain. EMI for example, has a practice of, as far as is possible, owning production
facilities in any territory that it is based. This gives EMI the capacity to produce 3 million compact
discs daily. This ownership structure is mirrored in South Africa, where the majors own all of the large
manufacture facilities and most of the distribution (CIGS, 1998).
Figure 2.2: Gallo Africa and Polygram’s Ownership Structure
Source: CIGS, 1998:29

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2.6 Distribution
The music industry’s distribution network is largely owned by the multinational record companies and
Gallo Africa, with a few smaller independent distributors. The diagram above illustrates the ownership
structure of the major record companies. Gallo Africa has the ability to produce its own master
recordings due to the size of its recording studios. The partnership between Trutone and Gallo Africa
together control one of only two compact disk manufacture plants in the country while Gallo
Distribution distributes the majority of the country’s music. Gallo’s partnership with EMI in music for
pleasure gives it considerable access to the retail market. The areas of sound recording, production,
distribution and retail for EMI share the same structure as Gallo Africa and Trutone. BMG is also in
the process of opening its own CD manufacturing plant which would give them their own production
facilities (CIGS, 1998).
The major control of the value chain, both globally and in South Africa, has created a situation in
which horizontal integration which is integration between record companies who have increasingly
become a feature in the music industry. This form of horizontal integration has described by Lopez as
an ‘open system of production’. The open system of production refers to a situation in which
independent record companies sign pressing and distribution deals with the major record companies
in order to ensure that their product gets produced and distributed. Accordingly a major record
company may have a number of independent record companies and their artists distributed through
them. The model captures the structure of the South African music industry with the majority of
independent record companies signing manufacture and distribution agreements with the majors.
2.7 The Music Industry Business
2.7.1 The Composer and the Musician
Songs are the foundation of the music industry. Revenue is generated through album sales and
copyright revenues. Copyright is the intellectual property of composers and forms a significant form of
revenue for the music industry.
Revenue is derived from:
 Public performances, for example radio play of a song.
 Mechanical reproduction, i.e. the reproduction of a compact disk.

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2.7.2 Live Performance
This incorporates both small intimate venues to mega stadiums that hold tens of thousands. These
venues have common features as they employ people, contribute to the revenue of the country and
provide an important link between the countries culture and the tourist sector.
The above reasons are essential and while at the same time provide musicians with an entry-point
into the music industry. Entry level performances in venues such as clubs, bars and school halls are
important in shaping and developing their repertoire and to build their careers. The international
platform for local musicians provides valuable opportunities for learning stagecraft as well as for
crossover between South African and international sounds. This could assist them in accessing
international markets and build musicians from local acts to international stars.
2.7.3 Record Companies
This is the core of the industry as it identifies and promotes the musical talent and skills that are
essential for matching sounds and images with particular market segments. Recording companies
also shape sounds and images to include a wider range of consumers that will buy an artist’s music.
They also need to ensure the domestic and international promotion and sale of South African music.
Regardless of the alternative options for accessing music such as internet this industry body still has
an important role to play to ensure a vibrant growth of the industry.
2.7.4 The Retailer and the Broadcaster
These delivery systems are essential as it is through it that most consumers experience music. A
strong, diverse and comprehensive delivery of music through these sectors is crucial for music
industry growth. These delivery channels are essential in ensuring that sufficient shares of the
potential consumers are exposed to the recordings.
2.7.5 Promotion and Publicity
Promotion and publicity is essential for two reasons as they create and ensure consumer awareness.
This can take the form of posters around the live music venue, point of sale, in-store promotion,
advertisements and music videos. Promotion helps build equity, increase sales, and ensure skills
development and retention in the music industry.

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2.8 The Domestic and International Market
Local and international success is important for music industry development.
The domestic market needs to be developed because it:
 It establishes a sales base from which an artist can move into the international market
 It increases sales volumes
 Raises levels of employment
 Ensures sustainability of the music industry
Figure 2.3: Understanding Copyright
Source: CIGS: 1998
2.9 The music industry comprises of the following aspects
Originators: These are musicians and songwriters who are the creators of raw material i.e. songs,
jingles, poetry and dialogue through the processes of recording and marketing generates the income
stream.
Publishers: Are companies that publish musical works as composed by songwriters and lyricists. They
promote the work of songwriters and administer royalty payments.
Record Companies: Are responsible for sound recordings, the promotion of recording artists and the
manufacture and distribution of phonographs.
Manufacture: This entails the reproduction of phonograms from masters. These commonly take the
form of cassettes and compact disks but may also be in the form of DVD recordings.

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Broadcast, Retail and Entertainment Sectors: These are the three sectors through which the product
of the music industry reaches the market.
The Retailer and the Broadcaster: Retail and broadcast are an essential delivery mechanism of music
to the market and it is through these points that most consumers experience music. Effective delivery
system is crucial in ensuring access and availability for the potential consumer. Without
comprehensive delivery the market will have a limited connection with the products that is available
and limit the growth potential of the music industry cannot grow.
2.10 South African music in different regions
With a population of 47 million people and greatest percentage being 75% black divided into two
major groups which are Nguni and Sotho. Within Nguni we have the Ndebele, Swazi, Xhosa and
Zulu tribes and in the Sotho we have Twasna, Pedi and Basotho tribes. The British and the Dutch
races orginate mostly from Europe and makes up the white race. The balance is made up of Indians
and Asians with a mix race referred to as Coloureds. With such a diverse population and due to
Apartheid with people living in certain areas different regions would have a dominance of a
population per region. The regions within South Africa are the Eastern Cape, Free State, Gauteng,
KwaZulu-Natal, Limpopo, Mpumalanga, North West, Northern Cape and the Western Cape. Given
that SA also has 11 official languages the music sector is also split into a number of categories being
Sotho-traditional which is also called Zulu-traditional, Tsonga-traditional, Zullu cappella, Pedi-
traditional, Afrikaans and Venda-traditional music. The Afrikaans music is influenced by France and
Germany with Dutch as a base. The main instruments used in the composing of music are drums,
e.g. water drums, tama talking drums, engoma; xylophones; slit gongs; rattles; stringed instruments
like musical bows, harps and fiddles and lastly windblown instruments like the trumpet and flute.
Due to the change in politics in 1994 and becoming a democratic country the face of the country
changed. Opportunities emerged for all people including those in the music industry. Black artists
who were forced to sing in English or Afrikaans could now sing their official language as markets
opened for traditional music. Most artists in the industry switched to all languages to capture
audiences and increase their market share. The demand from the international arena also
increased. A new sound was formed called Kwaito which has become the most popular social
economical form of music amongst the population.
The article (South African music today, 2009) talks of the diversity of music offerings from Pedi, Hip
Hop, Kwaito, Jazz, Afrikaans and Rock which showcases these artistic talents at organised events
such as Oppikoppi and Motherfudd festivals. According to this article the South African music scene
has continued to flourish in the 2000s. The music scene in South Africa is focused around four major
areas, Johannesburg, Cape Town, Durban and Bloemfontein. Cape Town is a hot bed for the

17
underground music scene, generally held to be more experimental than the music produced in the
other centers. The introduction of the SAMA, intended to recognise accomplishment in the South
African recording industry has raised the awareness of local artists and bands. South Africa has a
growing field of music journalism. Print based publications focused on South African music are
South African Music & Entertainment (SAM) tabloid. South Africa will also participate in the world’s
largest music trade fair at the March International du Dispute et de l”Edition Musicale (MIDEM, 2010)
as per the news window article and the question here is who knows about these events, and how
widely is this published but most of all what platform does this provide the artist besides the limited
exposure?
2.11 Future Developments
The rapid growth of the internet and related technologies has opened the avenues through which
consumers access their music. No longer do consumers only use traditional mediums like broadcast
media and through the sale of physical product to access music.
2.11.1 Internet
The Internet has opened a new avenue through which music can be promoted and purchased. The
Internet provides both artists and record companies with the opportunity to access global markets with
relative ease. Indeed for artists the Internet holds the potential to avoid the traditional route of
releasing an album through a record company. Although the Internet has largely been used by record
companies and artists as a promotional vehicle rather than as a site for retail more consumers
especially amongst the youth are turning to technology for their music. To the extent that retail occurs
through the Internet it does so in one of two ways. The first form of Internet based retail allows
consumers to order albums on-line and then the product is shipped to the consumer. That said, whilst
there are the occasional hits that ‘come from nowhere’, for the most part a significant amount of
marketing money is spent in promoting successful albums. Thus, for the foreseeable future, it is
unlikely that the role of record companies will be displaced by the Internet.
Although the Internet is presently not a significant feature of the music industry it is noteworthy for two
reasons: (CIGS, 1998:20)
2.11.2 Electronic media access
This digital capability has influenced the way in which music reaches the consumer. In addition to
acquiring music via the traditional broadcast media or through the purchases of the physical product
consumers can also acquire their music online via internet as well as multimedia downloads.

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Multimedia is worth noting for two reasons:
 The promotional possibilities
 The implications for the protection of copyright
The internet provides the opportunity for both artists and record companies to access global markets
with ease and it is used to avoid the traditional route of releasing an album. However there is still
good reason to use the traditional methods of promotion as a significant amount of marketing money
is spent on promoting successful albums.
The music industry, whilst global, is not without borders the global distribution of music is subject to
contingent on reciprocal licensing and distribution deals between record companies. Therefore if a
South African artist wishes their record company, needs to be able to convince record companies in
that particular territory that they are marketable.
Global distribution is depended on two factors:
 Local success.
 Proof of local success and product acceptability in the new market will make for a convincing
global distribution deal.
2.12 Symptomatic aspects faced by local musicians
2.12.1 Artist recognition
Our summation of the literature review is that it covers a range of issues that centres on the viability of
being a musician. The articles all call out a common theme of why is it that local musicians are not as
successful as international artist. Local artist want to be recognised as equals and their musical
talents and offerings should be appreciated and valued by all South Africans. In a speech by Galane,
2006 who is a musician and lecturer, he says that artists are not taken seriously and recording labels
always make them (the artists) behave according to how the labels want them too.
2.12.2 Business skills of Artist
Emphasises is placed on that artist must know their rights and be knowledgeable about the industry
especially the business end of it. The lack of business savvy of artist’s sees them end up being
unaware of what they are letting themselves into. A better understanding will outline and clarify the
business model of their careers and empower them to be well informed and understand the
obligations of their contracts but also to structure recording deals that fulfils their needs and also

19
requires the performance of recording companies’ obligations to the artist. Recording contracts are
determined by record companies according to the amount of material they have to draw on, the
opportunity to be recorded and a high profile in the market place. The kind of contract signed by an
artist does largely depend on their understanding and what it is they are hoping to achieve by signing
with a record company. It is advisable to consult with a lawyer in the industry who can advise
accordingly so that clear guidelines are set out i.e. marketing, royalties etc (Abrahams, 2003).
Ratshelumela, (2006) expresses concern about the skill level in particular the technical ability of
musicians and that government should look at ways to up skill many artist who mostly come from poor
backgrounds. He contends that not enough is done and very little resources are put in place in terms
of independent workshops or initiatives that occur in the local arts and cultural centres. Kerr, (2000)
comments on the lack of political will, ethnocentric, americanised attitudes and cultural prejudice that
prevails and affects our perception of what is good and what is bad. We have been led to believe that
international is better than local which is perpetuated in all that we do.
Kerr, (1994) Stated the South African music industry has come under some pressure and is teetering
on the brink of collapse, as a result of a number of crucial blows. The Independent Broadcasting
Authority proved to be ineffectual in enforcing legislation. Extremely cynical individuals in broadcast
media used the lack of enforcement to sideline local music, as a host of 'international consultants'
advising them to engage in more mainstream, commercial American style programming to increase
their listenership. The reason for doing so was justified for increase profits by running purely
commercial programming. Of course the problem with this is that royalties that have to be paid gets
channelled out of the country which negatively affects the economy especially against the exchange
rates. The opposite would be true in terms of keeping the money at home and have a positive impact
on job creation and sustainability for the local artist. (Kerr, 1994) In this manner, a river of money has
been flowing out of our country for years and like a leaking tap millions are wasted each year.
The Australian’s who are geographically isolated globally as we, have been successful in music and
sport because they have an inculcated belief that they are good enough to take on the world. Their
track record speaks for itself (Midnight Oil and Savage Garden). They maximise the exposure of their
artists on radio and television, where we find that our local artist’s have to struggle to get airplay
because preference is given to imported music.
"Payola" is alive and well in the South African broadcast industry, where rumours abound of
expensive gifts and overseas trips to persons responsible for play listing.

20
2.12.3 International profit before local commitment.
Record companies in South Africa are driven primarily by their international artists’ sales; thus there is
pressure to focus on international talent rather than their local South African counterparts. According
to Abrahams, (2003) the record companies’ function was to bring international music to South Africa.
Little has changed. The success of these companies is based on their ability to market and promote
international products developed by their international principals. It would not drive international
profitability if South African acts outsold their international counterparts”.
2.12.4 Record Companies
Recording contracts are determined by record companies according to the amount of material they
have to draw on, opportunity to be recorded, and a high profile in the market place. The kind of
contract signed by an artist largely depends on their understanding and what it is they hoping to
achieve by signing with a record company. It is advisable to consult with a lawyer in the industry and
who can advise accordingly so that clear guidelines are set out i.e. marketing, royalties etc. Payola is
a practice of paying DJ’s to play particular songs. Record companies have introduced play lists
although this is not compulsory DJ’s are still able to give certain songs extended playtime. Piracy is
also another activity that impacts on the revenue of the industry. In South Africa with a high piracy
rate this activity limits the investment pool for artists to draw from. Multinational record companies
also own the major distribution network while the smaller companies play a minor role.
2.12.5 Promotional support for international music “cash cows”
The record industry has vast budgets which they can use to promote new artists at their discretion. It
is evident that recording companies have the power to make an artist in the kind of contract it offers
and how that contract is structured specifically in the marketing and branding budget allocations. It is
also important for an artist to sign with an international company due to the kind of marketing and
exposure that can be achieved simply by a large budget. Abrahams, (2003.19) reveals “Major record
labels have the power to market and distribute music at a level impossible for an independent”.
2.13 South African Musicians need to take ownership
2.13.1 Self promotion
Peters, (2009) covers broadly the key aspects of self-promotion and the public relations at a
fundamental level. This is especially useful for artist who are self managed as well as for agencies as
a guide line. This is really great at a micro level but what needs to be expanded on is how the industry
role players can be drawn into the fold .What is the opportunities that are available to engage them.

21
Abrahams, (2003) marketing is expensive and key in this industry as artists have to compete with
international markets, piracy, payola and other obstacles. It’s imperative that this is set out in the
contract especially the various forms the marketing can take i.e. billboards, in-store promotions,
downloads, internet, concerts and various internet social pages. Radio stations are key and marketing
is reliant on the relationship various record companies have with the various stations.
2.13.2 Marketing
Artists also rely on the guidance of record companies but it is important for them to understand what
the marketing strategy is being undertaken. This is done through advertising, getting music played on
the radio and television and getting the artist reviewed and written about in magazines and
newspapers. This is when the marketing research happens, creating concepts and campaigns and
then delivery through various media avenues. Artists also rely on the guidance of record companies
but it is important for them to understand what the marketing strategy is being undertaken.
2.13.3 Channel expansion
Cultural Industries Growth Strategy (CIGS) identifies the forms of retail sales via CD Warehouse to
the sales of cassettes by traders in the rural areas of the Eastern Cape and Kwazulu Natal. These
include the specialist music chain, Musica, with 94 outlets as well as CNA, a generalist store,
consisting of 330 stores. The geographical spread of retail stores and their focus on niche markets
ensures that returns on marketing investment are optimised by a targeted approach to retail.
However, the research raised criticisms that retail stores:
 They do not actively promote South African music
 They often do not carry a wide range of South African music
The informal channels of hawkers, traders and spaza shops is critical in ensuring that the music
reaches rural areas as well as the lower ends of the market that are not targeted by formal retail
stores. The combination of the formal and informal retail channels ensures that music is readily
accessible to the majority of the consumers.
2.14 Support from industry role players needed
2.14.1 Play list influencing
Payola is a practice of paying DJs to play particular songs. Record companies have introduced play
lists although this is not compulsory DJs are still able to give certain songs extended playtime. Piracy

22
is also another activity that impacts on the revenue of the industry. In South Africa, with a high piracy
rate, this activity limits the investment pool for artists to draw from.
2.14.2 Broadcasting
(Kerr, 1994) currently though, the South African music industry has come under some pressure and
is teetering on the brink of collapse, as a result of a number of crucial blows: (Angus Kerr, 1994).
The Independent Broadcasting Authority (IBA) was established with a clear mandate, and legislation
was drafted that required broadcast media to include a minimum of 20% South African content in
their programming. Up until about 1998, the requirement induced by the legislative requirements
created a massive demand and awareness of music and local artists, and the standard of these
artists increased to a world class quality. The IBA proved to be ineffectual in enforcing legislation.
Extremely cynical individuals in broadcast media used the lack of enforcement to sideline local
music, as a host of 'international consultants' advising them to engage in more mainstream,
commercial American style programming to increase their listener ship. The reason for doing so was
justified for increase profits by running purely commercial programming. Of course the problem with
this is that royalties that have to be paid gets channelled out of the country which negatively affects
the economy especially against the exchange rates. The opposite would be true in terms of keeping
the money at home and have a positive impact on job creation and sustainability for the local artist.
(Kerr, 1994) in this manner, a river of money has been flowing out of our country.
2.14.3 Archaic mindsets
Unsupportive attitudes form and prevail as a consequence of the previous government's propaganda
campaign designed to discredit local music for political reasons. Many of the people directly involved
in the music industry are just as influenced as the general public. This ingrained perception of
inferiority results in an unpatriotic prejudice satellite channels such as DSTV broadcast music
programs such as MTV which only feature Eurocentric / American artists and are not subject to any
commitment to South African, or even African music. South African record companies have severely
cut back their spending on South African music production, mainly due to lack of sales resulting from
a lack of commitment, lack of air play, and most importantly, a lack of passion on the part of the
media. This is a catch twenty two situation and all these various elements from media to sales and
investment are all linked and dependant on each other.
2.14.4 Distribution channel monopoly
Multinational record companies also own the major distribution network while the smaller companies
play a minor role. Although the distribution is effective it does not reach the remote areas in our
country thereby impacting on the marketing and branding strategies of companies. The commitment

23
to dedication in the distribution of artist material is also compromised adding to the challenges.
According CIGS South Africa’s distribution network is largely owned by the multinational record
companies and Gallo Africa, although there are smaller independent distributors. The distribution
although effective does not reach the remote areas in our country thereby impacting on the marketing
and branding strategies of companies adding to the challenges.
2.14.5 Financial strength
A main weakness is the limited finances available for development and promotion of South African
artists. Due to the large amount of piracy and no coordinated strategy also hampers the successful
promotion of recording artists.
Piracy is also cited by CIGS as also another activity that impacts on the revenue of the industry. It has
also been identified as the greatest threat to the growth of the South African music industry.
Piracy results in a loss to all in the music industry:
 The recording artist and composers whose work is stolen.
 Record companies lose the opportunity of recouping there development costs.
 Retail stores are undercut by consumers buying a pirated product.
In South Africa with a high piracy rate this activity limits the investment pool for artists and recording
companies to draw from. As a percentage of the estimated levels of world piracy, South Africa piracy
levels are approximately 1% of that global figure which is 2.5 times more than the percentage that the
South African recording industry accounts for in global turnover of the recording industry. This too
hampers the successful promotion of recording artists.
2.15 Government commitment
It was in 1994 when people in the music industry had much hope and anticipation that with the ANC in
power our musical heritage and culture would receive a commitment and support from political
leaders. This hope would soon fade as the music industry was sidelined as the Independent
Broadcasting Authority proved to be ineffectual in enforcing legislation. This trend continues today as
government focuses on more important issues like unemployment, crime, housing and various other
socio issues. The reality of multi-national companies having big budgets and decision making powers
continue to market international artists who generate revenue for them. The consumer continues to be
influenced by international trends and while music channels like MTV continue to televise international
artists local ones are but small fish in a very big pond.

24
(Kerr, 2000) comments on the lack of political will, Ethnocentric, Americanised attitudes and cultural
prejudice that prevails and affects our perception of what is good and what is bad. We have been led
to believe that international is better that local which is perpetuated in all that we do.
It calls on all industry role players to support and give credos to the musicians by doing there bit to
push and reinforce there commitment of support not only by lip service but commitment through their
actions in supporting government and industry initiatives. Through the commitment it should translate
into an environment that is more conducive, accepting, financially viable and sustainable for artist in
the music industry. The industry for a long time due to political boycotts has been segregated and had
limited access to music. Freedom of speech that restricted the gathering of groups, right of
association and regulated communications controlled what could or could not be heard.
In support of the Growth, Employment and redistribution (GEAR) strategy the Department of Arts and
Culture, science and Technology (DACST) initiated the Cultural Industries Growth Strategy (CIGS) in
an effort to understand and develop the Music industry. This was done in 1996 with the formulation of
a task team initiative in 1998 to implement suggested recommendations. The effectiveness of which is
to be to be determined.
2.15.1 Legislation
It is the feeling of many musicians and players in the industry that the local quota should be increased
to 40%. The FIFA 2010 world cup in South Africa was only made up of about 50% of the local artists
performing where the rest is made up of international artist. Compare this to soccer world cup held in
Australia when 100% of the performers were Australian. Australia’s commitment is shown clearly by
this action.
2.15.2 Passion
South African music needs to be marketed to South Africans themselves. Industry, political
commitment, leadership and support must be given in action, communication and implementation
strategies. The entrenched values and belief systems of those in charge of the broadcasting industry
must be challenged, changed and up rooted in order to have a new philosophy.

25
2.16 SWOT
The table below illustrates the strengths, weaknesses, opportunities and threats of the music industry.
Table 2.1: SWOT on South African Music Industry:
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS
Diverse musical heritage and
a wide ranging music
development programmes.
Limited resources to for
quality recording and
promotion of artists.
SA has a strong industrial
base in recording;
manufacture; retail and
broadcast to ensure the sale
of music.
Small market limiting
resources available for
investment.
Tourists from major music
markets.
Piracy
Institutional density. Wide
range of institutions
representing most sectors.
Poor coordination
between different
initiatives.
Industrial and Institutional
density provide the
foundations for coordinated
industry growth.
Payola
Good average growth in unit
sales and market value over
the last decade.
Lack of statistical data
about potential markets.
Growth rate acting as an
impetus for expansion.
Copyright collection agencies
generating more revenue
than any other African
agencies.
Legal disputes over
copyright payments and
artists’ contracts.
Source: CIGS,2008.8
2.16.1 Strengths
Between 1992 and 1996 the number of units sold in the South African market expanded by 60%, the
15th
fastest growing market in the world. This quantitative growth indicates strength in the industries
and institutions of the South African music industry.
Contribution to this according to (CIGS: 2008) are:
 the promulgation of local content legislation, although this is relatively new and its effects have
still to be realised;
 the growth in community radio broadcasting;
 emergence of a variety of cultural exchange programs and industry development initiatives
which have increased the synergy both between local musicians and between local and
international musicians;

26
 increasing organisational density facilitating a strengthening and articulation of interests and
development projects in the music industry; and
 growth in the recording, marketing and sales of domestic repertoire.
2.16.2 Weaknesses
The primary weakness facing this industry is the limited finances available for investment in the
development and promotion of South African artists. This is exacerbated by piracy and the lack of a
coordinated strategy for the development of the industry. It is critical to improve the amount of finance
available for investment if the South African music industry is to take advantage of its present growth
phase and industrial / institutional density (CIGS, 2008:8).
2.16.3 Opportunities
The aggregate growth of the music industry coupled with the increased popularity and exposure of
local genres and the variety of initiatives underway to bolster the local music industry provide the
foundations for potentially explosive growth. This will depend on an appropriate degree of
commitment and resources from the various role players (CIGS, 2008:8).
2.17 International best practice
In terms of best practice models CIGS have looked at a number of models that South Africa could
learn from. Their aim was to “develop proposals that would aid in overcoming some of the
impediments faced by the industry and strengthen the growth trends in the South African music
industry”.
CIGS approach was divided into the following sections.
The first section examines initiatives that have been undertaken to assist domestic music industries.
The purpose is to provide ideas on policies and programmes that could be implemented in the South
African industry.
The second section was to assess the few initiatives that are currently available to the South African
music industry.
The third section proposes broad initiatives necessary to address the obstacles in the local music
industry.
The fourth section was to elaborate on the initiatives providing specific examples of the sorts of
projects that might be undertaken by the public sector or in collaboration with private sector agents.

27
This was to provide the basis for a dialogue over what the most appropriate interventions, projects
and programmes.
2.17.1 Australia
AusMusic is a significant initiative that provides educational and training material on the music
industry. These initiatives are ran throughout schools and tertiary levels and provides expertise on all
aspects of the music industry. The effect of this has provided aspirant entrants into the music industry
with a variety of different career paths and mobility within the industry. The creation of broadly skilled
and informed professionals within the music industry has been critical in increasing efficiencies in the
industry.
Radio stations recognise their roll and have played a critical part in the exposure and development of
Australian music. The mobile Earth Campaign allows sound engineers to tour Australia. These
engineers identify potential talent, record them and give them the opportunity for exposure. During
1997 the Australian government also injected $770 000 dollars to the promotion of domestic talent in
the export market while being actively involved in the promotion of cultural development and have
often formulated regionally specific development plans.
2.17.2 Canada
Canada’s music industry development initiatives are channelled through a private non-profit
organisation, The Foundation to Assist Canadian Talent on Records - FACTOR (CIGS, 1998).
FACTOR supports the Canadian songwriters and recording artists through the following programs
(CIGS, 1998):
 The Professional Publishers and Songwriters Demo Award Program to help professional
songwriters and publishers to produce a high quality demo tape to promote their work.
 The Professional Demo Award, artists with the production of a high quality demo that could be
presented to key music industry professionals.
 Independent Artists Recording Loan Program, aimed at assisting unsigned artists without
distribution in the production, marketing and promotion of an independent release.
 FACTOR Loan Program for Recording, assists Canadian controlled labels, production
companies, producers, managers and artists by partially financing the production, marketing
and promotion costs of EPs or albums for commercial release.
 Video Grant Program assists the financing of music videos to support current releases by
Canadian artists.

28
 International Showcase Program’s objective is to support international showcase activities by
Canadian artists.
 The Domestic Showcase Support Program supports domestic showcase activities by
Canadian artists.
 Domestic Tour Support Program supports domestic touring activities by Canadian artists.
2.17.3 Taxation
One of the more interesting approaches is that of Tax incentives.
The model used in Europe whereby cultural goods receive a tax exemption or tax reduction, for
example in Italy sales tax on books is 4%, whilst sales tax is generally 20% is an interesting concept.
The current tax on music productions is in line with international standards.
2.17.4 Blank tape levies
A blank tape levy imposes a levy on blank cassettes which is intended to remunerate artists and
producers for revenues that are lost due to home taping should be extended to include CD, DVD and
video.
2.18 National support programs
Department of Trade and Industry and the Industrial Development Corporation for the most part target
manufacturing the supply-side. There are only two possible schemes that the music industry could
potentially access:
The Export Marketing and Investment Schemes can be used to fund the gathering of market
intelligence of best possible music markets as well as funding potential showcase of local talent
internationally. On the face of it however it seems to have a long term and indirect impact for
musicians.
The Emerging Entrepreneur Scheme and Standard Credit Guarantee Scheme is a program aimed at
increasing SMMEs access to finance. Most independent record companies fall within the SMME
sector, however they would have to meet the banks normal lending criteria which could be onerous as
a result the level of uncertainty and risk that exist in the local music industry
Three developmental institutions are available to Arts and Culture:
 The Arts and Culture Trust.
 The National Arts Council.

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 Provincial Departments of Arts and Culture.
2.19 Summary
All the articles and journals covered including strategic government initiative appears on the surface
that it seems to show concern for the local music industry. There can be no doubt that this ambition
can only be realised through the concerted and coordinated effort of all in the South African music
industry. CIGS provides the platform from which this effort can grow. The question becomes what has
been done and exactly how far are we since all these proposals, what progress has been made. The
sense is that little has changed in regard to the value chain especially with reference to all the key
delivery channels. Our summation of the literature review is that it covers a range of issues that
centres on the viability and lively wood of local artist. The articles all call out a common theme of why
is it that local musicians are not as successful as international artist. Local artist want to be
recognised as equals and their musical talents and offerings should be appreciated and valued by all
South Africans. A better understanding of business and the industry will outline and clarify the
business model of their careers and empower them to make well informed decisions understanding
the obligations of their contracts. It will also enable them to structure a recording deal that fulfils their
needs and hold the record companies accountable in the execution of their obligations to the artist.

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