Businesses that consume music in the process of their operations will pay more royalties after the Music Copyright Society of Kenya (MCSK) increased licence fees by 11 per cent.
The consumers including entertainment spots, salons, passengers service vehicles, media houses and cinemas, currently pay between Sh15,000 and Sh870,000 on average and new charges will take effect in January.
The move is expected to increase the revenues of MCSK — which has been under pressure to reduce its cost to income ratio — and allow it to boost the earnings of musicians.
“It is international practice to factor in Consumer Price Index (CPI) when preparing tariffs and we have not been doing so,” Maurice Okoth, the chief executive of MCSK, told the Business Daily on Thursday.
“By including the effects of inflation in our fees, we not only cushion our administration costs from the effects but also ensure that we remit royalties that are of value to musicians.”
The increment is also set to affect individuals who organise music concerts, road shows and those hosting live performances at political rallies.
For example, disco owner pay five per cent of their annual revenues as royalties while cinemas will pay Sh21, 645 yearly from the current Sh19, 500. Sports club owners will part with Sh2, 221 for every 25 members.
Artistes complain the society spends bulk of the royalties on operational expenses with the measly surplus being distributed to musicians.
Previously, the MCSK was not expected to spend more than 30 per cent of its revenues on its operations and the breach of the rule led the Copyright Board revoking its collection licence in April last year. Its expenses stood at Sh152.5 million in the year to June 2011 against revenues of Sh217 million, leaving it with a surplus of Sh64 million or 29 per cent of the collections for musicians.
The state-owned Kenya Copyright Board reached an agreement with MCSK in April under fresh terms. Under the licence terms, the society will now retain 35 per cent of collections, up from 30 per cent, making it the winner in the one year legal battle between the parties. This forms part of the reason why MCSK has stepped up efforts to broaden its revenue base with Broadcasters and mobile phone operators set to meet a huge share of the royalties.
source:http://www.businessdailyafrica.com
