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Companies risking legal action over popular music downloads

All four players in the mobile phone segment
All four players in the mobile phone segment have launched ring back tones as they also help sell handsets./ Reuters 

Telecommunication providers using foreign and local music as ring tones could be exposing themselves to legal action over copyright infringement.

Although the content providers have been selling ring-tones for a number of years in the country, music has become a big tool for the telecommunication operators as they try to woo the youth into their networks.

All four players in the mobile phone segment have launched ring back tones as they also help sell handsets. The telecommunication providers also benefit from Short Message Service (SMS) or voice costs to access and manage the Ring Back To.

The telecommunication providers charge subscribers a fee for every song that is down-loaded whose proceeds are supposed to be shared between content providers, the telecommunication providers and the musicians.

An officer from the Kenya Copyright Board, who declined to be named, said some of the content providers are using music from local and international artists illegally.

And this, he said, could lead to legal action for the content providers and the telecommunication operators who provide the platform and also benefit from the work through commissions.

“All those telecommunication operators who have launched ring-back tones should tread carefully because most of the content providers are abusing the copyright laws” he said.

The most abused product, he said, was music by international artists since there is no direct government body that the content providers sign up with.

The Telecommunication sector is the latest revenue generating avenue for local musicians edging out traditional platforms such as CD copy sales.

Radio and television royalties, collection from entertainment joints, saloons and even commuter vehicles now rank among new revenue streams.

This avenue comes with a potent risk where the telecommunication firms fail to authenticate whether content providers have entered into binding contracts with musicians, exposing players in the chain to copyright infringement. Legal action, however, can only commence after the Kenya copyright board has received a complaint.

Already there is a court dispute between Music Copyright Society of Kenya (MCSK) and Cellulant Kenya employees, a company that provides value-added services to mobile phone users.

According to documents filed at Nairobi’s Milimani Commercial Court, Cellulant claims they entered into an agreement with musicians and procured exclusive licences to offer mobile phone ringtones, logos, and pictures.

MCSK counters that Cellulant is not empowered under provisions of the Copyright Act to enter into such agreements with any artiste or musician.

In an ideal arrangement, the telecom operator will sign a contract with a content provider licensed by telecommunication regulator Communication Commission of Kenya (CCK) and copyright body, the Music Copyright Society of Kenya (MCSK).

By the end of last year MSCK had 1,300 registered members, up from 400 a year ago. The increase of members is attributed to public awareness programmes launched by the society on copyright issues.

The higher membership has increased royalty collections with remittances from broadcasting stations alone now estimated at Sh60 million per year.

Under the law, content providers have an obligation to manage the royalty agreements and payments with local artistes for music in demand that they source, develop and up-load for use. Since MCSK only handles local artists, content providers have to get licences or authority from international record labels.

Mr Kevin Maina of Mobile Sawa, a content provider, says in Kenya they are dealing directly with musicians in some cases and their managers who are authorized to represent them.

But the Kenya Copyright Board discourages dealing with musicians directly without consulting producers, saying this leads to conflicts which end up in legal tussles.

The musicians are paid per download either on a quarterly or semi annual basis.

“Big names tend to get paid quarterly because they generate high volumes per quarter,” said Mr Maina. Mr Maina said they had not signed any deals with international record labels directly.

According to MrRene Meza, the managing director of Zain Kenya, one download costs Sh40 and is valid for a period of 30 days.

Instead they use cover tones, tracks produced by someone else other than the original artist, sourced from companies who supply cover tones to vendors all over the world.

“It’s a huge industry worldwide” said Mr Maina.

In cases where the cover tones suppliers do not have a certain track, content providers re-record the song directly at a sound studio.

Expensive option
This expensive option, Maina says, is taken if the song is popular and can generate a significant number of downloads. Besides local artistes, Mr Maina says they have arrangements with artistes from East Africa, with the formal consent of the Music & Copy Right Society of Kenya.

Telkom Kenya chief executive officer, Mr Dominique Saint-Jean, says Mobile Network Operators (MNO’S) do not deal directly with musicians but the content providers who provide their content onto the ring- back tones platform and have rights through MCSK.

The mobile network operator pays the content providers who in turn pays MCSK who in turn pays the musicians their royalties.

“Musicians benefit according to the terms they have negotiated with the content providers and are ideally paid per song downloaded,” said Safaricom chief executive officer, Mr Michael Joseph. “This is at the discretion of the content provider and the musician and the details of the deal they have signed.”

Established links
Safaricom has established links with the music industry to enable artistes distribute and sell music to the public. These include Skiza, their caller ring back tune product and Safaricom LIVE, an Internet product.

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