Safaricom fights Skiza tunes revenue sharing legislation

Safaricom Signage at the I&M Building along Muindi Mbingu Street, Nairobi. [Elvis Ogina, Standard]

Safaricom is fighting a legislative proposal that sets minimum earnings from ring-back tunes such as Skiza.

In a memorandum to Parliament, the mobile service provider has criticised clauses in the Copyright Amendment Bill, 2021 that fixes earnings telecom companies make from ring-back tunes at 16 per cent.

“The proposed clause shall lead to a reduction in the investment in innovation around ring-back tunes and may lead to the shutdown of the service as a result of intrusive regulation that fails to consider the commercial viability of products like dial-back tones,” Safaricom said.

It further criticised the proposal as an unfair regulatory burden on ring-back tunes since other content aggregation services are not subject to similar revenue sharing regulations.

“Corporations invest in the development and maintenance of innovations like dial-back tunes and adverse regulatory actions like in this proposed clause shall lead to the demise of technological innovations that have positively impacted the livelihoods of artists and copyright holders especially in the pandemic era,” the telco said.

Safaricom launched the Skiza ring-back tune service in 2009, which has become the most popular in terms of user base, with more than nine million subscribers.

For up to Sh1.50 daily, users get to select and upload tunes from a variety of local and international artists that are played back to callers in place of a dial tone. 

More than 20,000 artistes and content creators are enrolled on the platform and the company works with 116 partners who aggregate the content for publishing on Skiza.   

The telco has incrementally been reviewing its Skiza revenue share deal with artistes in recent years and in August 2021, Safaricom increased the revenue share for artists and content creators to 40 per cent from 30 per cent the previous year.

In 2017, Safaricom paid out Sh152 million to three content service providers (CSPs) with Sh141.6 million going to the Music Copyright Society of Kenya, Kenya Association of Music Producers and Performers’ Rights Society of Kenya.

If enacted, the Copyright Amendment Bill, 2021 will see artistes’ earnings from the platform increase by tens of millions. 

“In the case of ring-back tunes, the parties shall share the net revenue from the sale of ring-back tunes as follows; the premium rate service provider at seven per cent, the telecommunication operator at 16 per cent, the artiste or copyright holder at 52 per cent,” says Section 30C of the Bill.

The three CSPs have welcomed the Bill.

Liberty Afrika, a CSP that also supplies to the Skiza platform, also voiced support to the proposals, albeit with certain amendments to remove ambiguities. “Liberty Africa Ltd supports the enactment of the provision into the Copyright Act,” said the firm’s Chief Executive Mr Sidney Wachira, also in a memorandum to Parliament.