Licensing in the Nigerian Music Industry – Francis Ololuo

Intellectual Property

3rd November 2020

Francis Ololuo[1]

 

LICENSING IN THE NIGERIAN MUSIC INDUSTRY

Introduction

The Nigerian music industry has come a long way. From being a mere hobby for many creatives or being seen as a “no-good” profession by parents of old, the music industry has grown into a money-spinning occupation. In a recent report,[2] the Nigerian music industry was projected to generate a revenue of about $50 million[3] for the Nigerian economy by 2020.[4] The industry’s growth has been on the ascendant in the last decade and there are vast opportunities for creatives and other stakeholders to commercially exploit their art. Licensing of music is one of these opportunities as it provides the copyright owner with better control over his work.

With the recent decline in physical record sales and the intrusion of technologically mediated forms of music like Caller Ring-Back Tunes (CRBT) and digital music streaming, there has been a remarkable increase in the appetite of Nigerians for digital music,[5] making licensing (rather than an outright assignment) the preferred option for the commercial exploitation of their music for many creatives.

 

What is Music Licensing?

Music Licensing is simply the transfer of exclusive or non-exclusive rights, authorisation[6] or permission to another person, permitting them to reproduce, publish, perform, make translations or adaptations, broadcast or distribute a musical composition or sound recording for commercial purpose, usually for a period of time. In practical terms, music licensing can be likened to renting one’s song or sound recording to third-parties.

In copyright law, the copyright owner of a song or sound recording is solely granted these rights to commercially exploit the song or sound recording to the exclusion of others.[7] However, the copyright owner (the licensor) may decide to license the exploitation of one or more of these rights to another person (the licensee) in return for royalties, a lump-sum payment, or some form of compensation (either monetary or non-monetary).[8] The commercial exploitation of a song or sound recording without license or authorisation from the copyright owner amounts to copyright infringement.[9]

A licensing agreement is usually required to facilitate the transfer of rights over musical works. Where a music license is granted, ownership rights remain vested in the copyright owner (licensor), while the other party (licensee) now has the legal authority to exercise some or all of the artist’s rights to such extent as is allowed in the license agreement between the parties.[10]

A music license could either be an exclusive license or a non-exclusive license. An exclusive license means a licence signed by or on behalf of a copyright owner, authorising the licensee to the exclusion of all other persons (including the person granting the licence), to exercise any right which would otherwise be exercisable exclusively by the copyright owner.[11]  Exclusive Licensees may sue for the enforcement of copyrights in the licensed works without joining the copyright owner as party to the suit.

On the hand, a non-exclusive license enables the licensor to continue exploiting his exclusive rights or transfer these rights to other third parties.[12] A non-exclusive license cannot be transferred without the prior express consent of the copyright owner (licensor).

Apart from being an exclusive or non-exclusive license, there are other forms of classifying music licenses. Each license leads to corresponding rights and royalties.

Types of Music Licenses[13]

  1. Master License and Mechanical License: A master license is granted by the owner of the master recording (masters)[14] in a sound recording to another person who intends to commercially exploit the sound recording. Sometimes, the artiste or songwriter owns the rights in the masters but usually, these rights over masters are signed off by the initial copyright owner to the record label.[15] Consequently, when seeking to use the sound recording, one has to negotiate a masters license with the record label in control of the artiste’s masters and pay the label, the agreed master’s royalty.Similarly, a mechanical license is required when one intends to commercially reproduce the sound recording in an audio format e.g. CDs, ring-back tunes, digital downloads, and streaming. Mechanical royalties are paid to the copyright owner for the recording, manufacture, reproduction, and distribution of protected works. While in some jurisdictions these are statutorily stipulated, in Nigeria these rates are normally fixed by the collecting societies in the absence of directly negotiated rates between owners and those who may seek to cover or utilize these rights.
  1. Synchronisation License: This license grants a licensee the right to synchronise either the musical composition or sound recording with visual media.[16] For instance, where a movie, video game, or TV commercial is to be made using the composition or sound recording, a synchronization license will be required. A synchronization license is also required where the composition or sound recording is to be used in another form e.g. a re-recording, cover, or sampling. A synchronization royalty is paid in this instance to copyright owners in the requisite works used.
  2. Broadcast or Performance License: This is granted to the licensee to enable them to perform, stream, record or play the sound recording in public via radio, tv, in concerts, or at parties. Usually, the services of Collective Management Organisations (CMOs) like COSON[17] and MCSON,[18] are employed to grant, negotiate, administer, and recover performance licenses and royalties, respectively.[19]
  3. Print License: Here, the licensee is granted the rights to transcribe or print physical copies of musical notes or lyrics of the musical work and distribute same.[20] Print Licenses are majorly required for commercial exploitation of sheet music.

Music Licensing in the Nigerian Music Industry

Many times, there are usually four parties involved in negotiating music licenses in the Nigerian music industry apart from the licensee:

a) The record labels

b) The artiste/performer

c) The songwriter; and/or

d) The publisher

Considering the convoluted nature of music licensing, many artistes and record labels employ the services of a music publishing, distribution, and licensing company to administer, exploit, manage and collect royalties on their music catalogue. The music publishers also grant licenses on behalf of the copyright owner. Usually, the publisher acquires the publishing rights from the songwriters, lyricists, and composers.[21]

Music publishing companies help music copyright owners distribute and recoup royalties for their works on digital music streaming platforms like Apple Music, BoomPlay, Spotify, Deezer, etc. Pursuant to the recent decision of the Supreme Court in MCSN v. Compact Disk Technology,[22] music publishing companies, as assignees or exclusive licensees do not require the approval of the NCC[23] to sue for the enforcement of copyright in the musical works or sound recordings of their clients. Some popular publishing companies in Nigeria include Universal Music Nigeria (UMG), Replete Publishing, Premier Music, Green Light Music Publishing, and Hypertek Digital. In 2017, the Music Publishers Association of Nigeria (MPAN) was established.[24]

Various digital music distributors like DistroKid, Tunecore, and CD Baby are platforms that help Nigerian indie artistes place their songs and generate royalties on music streaming platforms. CMOs like COSON and MCSN also help Nigerian music copyright owners administer and exploit the mechanical rights and performance rights in their songs or sound recording.

Conclusion

In order to have greater control over one’s song and constantly gain royalties, licensing is recommended as the more preferred option when commercially exploiting one’s copyright in a song or sound recording. According to the ‘Nigerian Recorded Music Industry Report (2015 – 2020)’, published by the Disruptive Creative Economy Meeting (DCEM) group, the Nigerian sync market alone potentially generated a value of over half a million dollars in 2019.[25]

Due to the complexities surrounding music licensing, it is important that music licensing agreements are in writing and the services of an entertainment lawyer and other requisite professionals are sought when executing a music licensing agreement. Sometimes more than one music licensing is required, where the copyright is already licensed, or alternatively, there could be multiple ownership claims to the same song or sound recording managed by different publishing houses. It is also critical to retain the services of an IP/entertainment lawyer to interface with publishing houses, collecting societies and music labels and to guide the rightsholders through the technicalities.

 

__________________________________________________________

For further information on this article and area of law,

please contact Francis Ololuo at S. P.A. Ajibade & Co., Lagos.

Mobile (+234 1 472 9890), fax (+234 1 4605092) or

email fololuo@spaajibade.com

www.spaajibade.com

[1]   Associate Intern, Intellectual Property Department, SPA Ajibade & Co., Lagos, NIGERIA.

[2]   The ‘Nigerian Recorded Music Industry Report (2015 – 2020)’, published by the Disruptive Creative Economy Meeting (DCEM) group. According to Pricewaterhouse Coopers LLP (PwC), Entertainment and Media Outlook: 2017-2021, Nigeria is expected to have the fastest-growing Entertainment and Media (E & M) industry in the world between 2017 and 2021.

[3]   Approximately N19,250,000,000 using the extant Central Bank of Nigeria (CBN) foreign exchange rate.

[4]   Abishek Singh, “Nigerian Music Industry Revenue to Hit 50 Million Dollars by 2020” (25th June 2019) available on <http://151.106.34.91/~mptest/nigerian-music-industry-revenue-to-hit-50-mn-by-2020/> accessed on 27th September 2020.

[5]   As of December 2018, BoomPlay who entered the Nigerian market in 2015 had about 40 million users and millions of mobile App downloads. See <https://filterfree.ng/features/5-of-the-best-music-streaming-apps-in-nigeria/> accessed on 29th September2020.

[6]   In CBS Songs Ltd v. Amstrad Plc (1988) A.C. 1013 HL, an “authorisation” has been described as the grant or purported grant, which may be express or implied, of the right to do the act complained of, whether the intention is that the grantee should do the act on his own account, or only on account of the grantor. Similarly, in the earlier case of Falcon v. Famous Players film Co. [1926] 2 K.B. 474 at 499, the English Courts defined “authorise” as “sanction, approve or countenance.”

[7]   Section 6 and 7 of the Nigerian Copyright Act, CAP C28, LFN 2004.

[8]   Aluko Oluwasegun Samson, “Licensing as a Tool for Curbing Piracy in Nigerian Copyright Industry” (October 2008), a Long Essay submitted to the Faculty of Law, Obafemi Awolowo University in partial fulfilment of the LL. B (Hons) Degree.

[9]   Section 15 (1) of the Nigerian Copyright Act, CAP C28, LFN 2004.

[10] Innovation Law Club Africa (ILCA), “Copyright and the Nigerian Music Industry: Examining the Licensing Regime Under the Copyright Act” available on <https://ilca.africa/copyright-and-the-nigerian-music-industry-examining-the-licencing-regime-under-the-nigerian-copyright-act/> accessed on 28th September 2020.

[11] Section 51(1) of the Copyright Act, CAP C28, LFN 2004.

[12] John Onyido, “Legal Trends in Intellectual Property Licensing” The Gravitas Review of Business and Property Law, Vol.9 No.1 (March 2018).

[13] To get a better understanding of the different types of music licensing, it is important to understand the two types of copyright in a recorded song, see Francis Ololuo, “Understanding Split Sheets and Collaboration Agreements in the Music Business”, available on <http://www.spaajibade.com/resources/understanding-split-sheets-and-collaboration-agreements-in-the-music-business-francis-ololuo/> accessed on 28th September 2020.

[14] A master recording is the original version of the sound recording from which all other recordings stem from.

[15] Usually temporarily until the record label is able to recoup its expenses and investment in the artiste.

[16] It should be noted that Section 51 of the Copyright Act while defining a sound recording excludes soundtrack associated with a cinematograph film.

[17] The Copyright Society of Nigeria (COSON) is one of the two CMOs in Nigeria.

[18] The Musical Copyright Society of Nigeria (MCSN) is also one of the CMOs in Nigeria.

[19] Please note that Performance Rights Organisations are often part of Collective Management Organisations (CMOs).

[20] Rory P.Q, “How Music Royalties Work” (30th March 2020) available on <https://iconcollective.edu/how-music-royalties-work/> accessed 29th September 2020.

[21] Keith Holzman, “The Role of the Music Publisher” (2005) available on <http://www.musicbizacademy.com/ articles/kh_musicpublisher.htm> accessed on 29th September 2020.

[22] (2018) 12 SC (Pt.1) 136. Also see Adeokin Records Ltd v. MCSN (2018) 7 SC (Pt. II) 40.

[23] Nigerian Copyright Commission.

[24] Lami Mustapha, “What Does Music Publishing Mean in Nigeria” (13th February 2020) available on <https://link.medium.com/dsKpejOmeab> accessed on 29th September 2020.

[25]  The ‘Nigerian Recorded Music Industry Report (2015 – 2020)’, published by the Disruptive Creative Economy Meeting (DCEM) group. Available on https://dcemafrica.com/resources/nigerian-recorded-music-industry-report-2015-2020/> accessed on 29th September 2020.

 

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