Efe Omorogbe responds to Kenny Ogungbe’s
speech delivered at the Nigerian Entertainment Conference, April 2013.
Photo: Oyeyemi Farotade
When I learnt that Mr. Keke Ogungbe, founder/CEO of Kennis Music was billed to speak on the topic: ‘Are Record Labels Endangered Species?‘ at the inaugural Nigeria Entertainment Conference, I wasn’t exactly sure what to expect and it made all a bit more exciting.
I obviously had my opinion on the
subject matter. Working with artistes in management capacity and
providing label support services to the indie artiste had made it quite
clear that the label is a necessity even with the advent of the digital
era. To me, it was simply a question of adaptability for the labels, the
traditional need remains, it was just the modus operandi that needed
tweaking.
I was curious to find out Mr. Ogungbe’s
perspective and recommendations as to how the label can ensure its
survival and profitability. The speech, though highly informative and
interesting didn’t adequately address the topic in my opinion. More ink
was dedicated to an engaging historical exposition and general
music/entertainment industry issues than the meat of the session which
to me, was more about the status of the record label in a changing music
business environment.
For me, some of the core issues are thus:
(1) If an artist can record, mix and
master a track on his laptop, produce a viral vid on the same device,
publish the audio and visual materials on YouTube, promote via social media and secure iTunes and Spinlet distribution by sending 3 emails and possibly become a star, of what use is a label to such an artiste?
(2) As digital distribution gradually
become the primary source of label revenue, how sustainable is a system
where a telco insists on an 80/20 rev share ratio with a VAS
company/aggregator which in turn, takes about half and leaves the label
with a paltry 10 per cent to further split with the artiste?
(3) If 60% of the current hit-makers are independent, what are the prospects for traditional labels? etc…
These and other questions were neither
directly raised nor addressed by Mr. Ogungbe’s paper but interestingly,
that is not even the reason for this rejoinder. My concern stems not
from the issues that weren’t treated but from some of the pious
positions taken and controversial comments made by Mr. Ogungbe during
the session.
Mr. Ogungbe and I have had conversations
on these industry issues for the better part of nine long years and we
know each other’s perspective and antecedents well enough. As I stated
during the business session, I have a different side to many of the
stories and assertions made by him during the music session. In
deference to the speaker and panelists of the business session, the
guests and the organizers, I elected to not address his positions there
and then but it would be disservice to the industry in particular and
the nation in general if these grievous misrepresentations are allowed
to be documented unchallenged.
Mr. Ogungbe and Kennis Music did not
create many of the problems bedeviling the music industry but in my
opinion, didn’t do enough to fight them either. If anything, his actions
and inactions, inadvertently but significantly weakened others who were
hell bent on taking on the problems. Let me explain.
Joey Ukpong of Styl Plus Music reached out to me early 2006 in a bid to secure Now Muzik’s support for their price re-adjustment move for ‘Expressions‘, the group’s forthcoming sophomore CD. About a year earlier, they had pushed Styl Plus’ debut 4 track, 1 remix EP, ‘Olufunmi‘
on jewel cases at N500.00 per unit retail price and it had been hugely
successful. Here they were, planning a March 2006 release of an 11 track
full length album that market forces a.k.a Alaba pirates dictate cannot
be sold for a penny more than N250 retail. It was a bitter pill to
swallow so Joey met up with me at our Maryland office to sell a
proposition. He said they wanted to insist on a N400 per CD position but
reckoned the chances of success would be higher if other top artistes
agreed to push their products at the same price. He said he came to us
first because Now Muzik represented at that time, a crop of heavy
hitters on the scene. And we did. 2face, Sunny Neji, African China and Ruggedman
were clients of ours but there was a limitation. Some of these artistes
recorded under other labels and the power to make such decision resided
with the labels. 2face was on Kennis Music and Kennis was the most
influential label at the time so naturally, Baba Keke’s, as we fondly
call him, was our first port of call.
Ever blunt and firm, Mr. Ogungbe told Don T,
my partner and I that the move was doomed for failure. He posited that
the only solution to the piracy scourge was for us to toe the line of
the marketers and allow the ones who have been duly licensed by the
labels to distribute the music, sell at a price that’s competitive with
what the pirates offered. His belief was that the focus should be on
pushing volume. Just as the likes of T Joe and Obaino
had argued, if we crashed the price to a point where the margin is
narrowed down to about N10 – N25, pirates would be significantly
discouraged from the trade. Then the label will be ‘allowed’ to push
units in the millions in peace and everyone would be fine. Really? We
left downcast and terrified.
After deep analysis of the discussion,
we concluded that for a label with the media might that Kennis possessed
at the time, it probably was logical for them to adopt that approach
and depend on huge volume to break even and make profit. For the rest of
the industry however, it portended doom. Promotion is expensive
worldwide. Nigeria isn’t an exception. Mass electronic media push budget
for the regular label would easily exceed recording and packaging cost
many times over and make it increasingly difficult to break even on a
N25 per CD – or less- income. For Kennis, they were in heaven. They had
access to an obscene amount of airtime on radio and television and made
damned good use of it. Their music and talent were engaging content for
their television and radio gigs which earned them good money and in
turn, served as marketing and promo platforms for their music and
artistes. Genius! More so, when for a good while, the competition was
subpar and the ratings were in their favour. They ran the roost. A lot
of industry guys cowered and sucked up to them for a bit of shine time
so it was VERY CONVENIENT to adopt the ‘crash the price and push for
volume’ philosophy. Keke Ogungbe and Kennis Music did what no one could
knock them for – look out for themselves – ONLY.
Of course, Styl Plus Music and Ahbu Ventures put out ‘Expressions‘
in March 2006, sold their CDs at N400 for the first 10 days or so and
then- BANG! The pirates unleashed their cheaper alternative. The rest of
us didn’t actively support their brave move, and they failed. But the
failure was really ours as a collective. Soon afterwards the retail
price dropped to N200 and then to N150. The marketers put pressure on
the replicating plants to crash production price per unit to N25.
Sleeves were pegged at N5 and wholesale pricing sashayed between N45-N50
leaving a N20 maximum mark up for marketer, label and artiste to share.
The replicating plants were quick to realize that the boom was
effectively over. The cost of operations wasn’t going to be sustainable
at N25 per CD and some watched their operations shrink weekly. Some
closed shop in no time. We had started selling the plastic sound carrier
and paper jacket with a tiny mark up. The music, the content had lost
all value. The industry was on a free fall to implosion. We cried out
and started work towards some form of organized resistance.
I gave an interview and posited that the
music business would implode in 18 months if we didn’t rise up to the
threat posed by piracy and improper packaging and pricing. If I was the
one Mr. Ogungbe was referring to when he talked about ‘somebody who said
the industry was dead in a bid to seek relevance’ and proudly added
‘and I told people who asked me that it was their industry that was
dead, not mine’, it is indeed unfortunate.
Some of us didn’t agree with his
approach. We didn’t think it was feasible to build a business model that
depended on moving units in the millions for sustainability. We knew
that five hundred thousand units was a difficult mark to hit even in the
US, one million was special. That’s why they awarded a platinum plaque
for such achievement. We recognized that records moved 100,000 units in
places like SA and the label bosses pop champagne. We reckoned that
100,000 units to the Nigerian label at that rate was N1,500,000 max –
less maybe 40/50 royalty to the artiste – less than half the cost or
recording the album in the first place not to mention additional costs
to package, shoot videos and promote. We didn’t just agree with Mr.
Ogungbe. Kennis Music may have been satisfied with cheap products, low
budget packaging and heavy hype to sustain its business but not everyone
agreed. To the likes of O’Jez, Storm Records and emerging forces like Square Records and Mo’Hits,
quality packaging must match hype. They invested in quality
photography, styling, videos and the industry responded in appreciation.
People wanted their products to look appealing. They wanted multiple
paged packaging to allow space for detailed credits, lyrics, pictures
and the like. N5 per jacket wasn’t going to deliver that. So you can
understand my sense of alarm when part of Mr. Ogungbe’s paper stated
thus:
‘As a people, we deserve the best
and quality product. We should never compromise quality on the alter of
cheapness. Pirated works can never stand the test of time because the
quality is ever and embarrassingly poor’
We came together and started the resistance conversions under the aegis of Music Business Forum
at Sweet Sensation, Isaac John, Ikeja. MBF became AM.B-Pro and would
later close ranks with eight other industry associations to form the Nigerian Music Industry Coalition. We engaged the NCC, the office of the AGF,
the presidency, one another and worked tirelessly towards tackling the
piracy problem and resolving the long-drawn collective management
imbroglio. We have been in the trenches working with the government, the
NCC to fight piracy at great personal cost and risk. The hitherto
impregnable Alaba was demystified. They have been a series of raids and
arrests. The historic prosecution of the Alaba king of pirates sent a
strong warning to the criminals that the NCC and the industry were no
longer taking things lying down. Mr. Ogungbe has made little or no
contribution that I am aware of, to the fight. Instead, he has continued
to stand by an illegal organization that has continually displayed
contempt for the law and attacked the same NCC that has worked with
stake-holders to fight back the piracy he protests thus:
‘Record label owners today see
music as bad investment due to the monstrous problem of piracy. It is
time that practitioners of the industry should rise up to the challenge
posed by piracy as it is killing the Artist, the Record Label owners,
the Investors and the Economy’
I want to believe that I am not the only
one who noticed the inconsistency between what Mr. Ogungbe’s written
speech conveyed and what his spontaneous comments/outbursts
communicated: How else does one connect the statement:
‘I am encouraged by the recent
development in the music industry as it relates to royalty. The tempo
should be sustained. When a musician knows that the more airtime his
works gets, the more income he earns which is timeless as music content
utilization by broadcast stations and some recreational centres; use
works that have mass appeal. Artistes and producers based on this are
challenged to produce good works to have that followership’.
with the call thus:
‘There should not be pirates in the name of collecting societies’
In an obvious attempt to discredit COSON,
Mr. Ogungbe advanced the dangerous argument that broadcast stations
should have the right to choose which body to license music from based
on the repertoire and the power to do competitive bargaining for same.
For a long time, some of us disagreed with proponents of a sole CMO
situation in Nigeria and this was one of the main arguments advanced by
the likes of Mr. Laolu Akins, Mr. Toju Ejueyitchie and Chief Tony Okoroji.
They were resolute in their belief that multiple CMOs will breed chaos
and become a powerful tool in the hands of users who are unwilling to
pay. They maintained that at the end of the day desperate rights owners
or their reps will make it impossible to establish and sustain
reasonable standards and that multiple system will consequently not
deliver the expected dividends to right owners in general. For a gesture
of support for his position, he turned to Mr. Chris Obosi
whose Megalectrics brand has indeed signed a licensing agreement with
COSON and can’t be said to be in agreement with Mr. Ogungbe’s position.
To all those who have remained unconvinced that multiple CMOs for
Nigeria will work against rights owners, Mr. Ogungbe just presented
proof that government made the right choice by approving only one CMO
for a category of works!
I need answers. How can the industry, COSON, the broadcast stations ‘sustain the tempo’
when Mr. Ogungbe functions as a top executive in a media empire that
have so far refused to pay royalties? How can we entrench the culture of
royalty payments when he continues to serve on the board of an illegal
organization whose sole claim to legitimacy is a PRS affiliation that
has been nullified for over two years? Maybe Mr. Mayo Ayilaran has not thought it expedient to inform the rest of the board and the members that MCSN does not have any affiliation with PRS anymore. But then again, maybe they know but don’t think it is of any consequence.
I have a bunch of other issues yet to
address and I am sure Mr. Ogungbe has a different side to my different
side of the story so far. Here’s my suggestion. Let’s have an open
session, on live radio or television. Let’s have an open debate and
settle these issues once and for all. Pick the date, time and venue sir.
Just two hours of your time. The industry would be the better for it. I
am waiting!
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