What you need to know:
- At first glance, the specifics of who benefits—and in what size—from Caller Ring Back Tone or CRBTs, appears to be straightforward. However, artistes say they are getting a raw deal, Gabriel Buule writes.
Enock Kateete is a manager in-charge of a music group known as Kampala Boys, alias B2C Uganda. Four years ago, the group entered a contract with a local aggregator to distribute its music in the form of Caller Ring Back Tone (CRBTs).
Kateete claims the aggregator never paid their benefits even when the songs were evidently distributed and used as CRBTs via Airtel Uganda. Attempts to make the aggregator honour the contract were futile. Left with no choice, B2C immediately terminated the contract.
“We tried to pursue the payment, but the aggregator kept playing games and we chose to dismiss the agreement we had earlier made with him,” Kateete says, adding that the aggregator failed to account for the returns he was alleging after he promised to pay some money.
Katete’s concern is that the aggregator makes it hard for the client to understand how CRBTs work. He further reveals that this is the modus operandi of most dealers in the aggregation business. They deliberately choose to conceal crucial details.
But it’s not all doom and gloom. Another musician, Wycliff Tugume, alias Ykee Benda, says he earns from CRBTs. He, nevertheless, hastens to add that the money doesn’t match the numbers of CRBTs he sells, let alone the actual worth of his music.
Ykee Benda also strongly believes that there’s need to review and streamline the CRBT concept if artistes are to benefit from their works. He further reveals that while some artistes have their works distributed, they earn a pitiful amount, if any.
“Most musicians have their songs distributed and sold as caller tunes, but, at the end of the day, they are not earning from their works,” he notes, adding, “Something must be done.”
Ykee Benda notes that there are unknown parties in the revenue sharing process in the CRBTs. Authorities, he adds, have never come out to justify their involvement. He adds that the process is marred by many misgivings, which make musicians to lose money unwittingly.
How CRBTs work
Apparently, few musicians understand how the business works. Consequently, several have had their works being distributed by unknown persons without paying them.
So how does a CRBT work?
Charles Batambuze, the vice chairperson of National Cultural Forum (NCF), explains that a CRBT is the audible indication heard by the calling party while waiting for their call to be answered by the called destination. It can be, he adds, a song, voice, poem or any piece of audio work that is preset by a telecom.
NCF is the apex body for all associations and federations in the arts, culture and creative industry of Uganda.
Batambuze notes that until when that particular piece of work is commissioned and owned by a telecom, cell phone carriers or telecoms have to pay copyright royalties each time a customer uses a ringtone.
“Ringtones are derivative works of art and, by using any, you’re infringing on private copyright, which means the copyright owners are entitled to royalties,” he explains.
What are the concerns?
Batambuze notes that there’s an unfair revenue sharing process in the CRBT business. Owing to this, the business needs to be reviewed. He says aggregators and telecoms are thriving on government’s reluctance and the ignorance of artistes. This ultimately ensures that artistes don’t get a fair share.
He further asserts that each CRBT costs Shs700, of which the government takes 50 percent. This translates into Shs350. The telecoms walk away with 35 percent or Shs245, and the aggregator pockets 13.2 percent or Shs92.4. This leaves the musician with a paltry 1.8 percent or Shs12.6, moreover before tax.
Batambuze, who banks on cumulative data collected by NCF, indicates that as of the year 2019, telecoms collected 78b in CRBTs, of which 50 percent was taken by government and the content owners were the least paid.
In a petition drafted by NCF, arts manager and the secretary general of NCF, Emmanuel Mulondo, artistes suggest that content owners should get 60 percent of the money and the rest split 40 percent. They also insist artistes should be responsible for paying their taxes.
Mulondo also reveals that when they asked platform vendors why the government gets 50 percent, the explanation was that CRBTS are charged on airtime, which comes with a lot of taxes.
“There should be an option for CRBT payment to be charged from airtime other than mobile money where the tax burden is high,” Mulondo reasons.
Similarly, Batambuze says the government needs to look at the value of the creative economy and its contribution to Uganda’s society so as to let the creatives benefit more since they create more jobs and revenue.
He also warns that much money goes uncollected in royalties and that there’s an estimate of Shs321b that artistes could be earning from public transport, hospitality, bars, night clubs, education and public sector broadcasters. The money, however, goes uncollected.
“Music consumers don’t want to pay and those who pay pretend to pay. If government enforces private copy levy on day-to-day life gadgets, around 68b would be collected every financial year,” he adds.
Telecom firms speak out
However, Rhona Arinaitwe, the spokesperson of MTN Uganda, says as a company, MTN’s core business is voice, data and mobile money. This means with other businesses, the company has to involve a contractor.
She notes that for the case of CRBTs, the company has a platform vendor, who is contracted by MTN to handle CRBTs on the companies’ behalf.
Arinaitwe reveals that the platform vendor earns 20 percent of the gross revenue of Shs700. MTN then takes 20 percent from the gross revenue to cater for costs of handling. The government walks away with 30 percent in taxes for Value Added Tax (VAT), which is 18 percent and 12 percent for Excise Duty.
She further reveals that the aggregator takes 40 percent of the net profits, which accounts for 30 percent of the gross revenue. The aggregator—she stresses—bears that responsibility for the musicians who provide content.
“The content aggregator takes 40 percent of the net revenue (gross revenue less platform vendor fee, less MTN costs of service delivery, less taxes) per tune. That is what the aggregator will share with the content creator based on their agreement,” she explains.
David Birungi, the spokesperson of Airtel Uganda, reveals that the telecoms have taken responsibility to explain to stakeholders how the business works and that is one of the many avenues they are using to strike a balance.
This law under the Copyright and Neighbouring Rights Act, 2006, provides that it is unlawful to use copyrighted musical work without the copyright owner’s consent.
Aggregators must, therefore, obtain distribution rights from the music publisher and other stakeholders in the chain of copyright ownership.
Art entrepreneur James Propa reveals that most artistes and stakeholders are complaining because they are failing to understand how the business works. He notes that in the chain of loyalty, sharing in the music business, it isn’t about the musicians alone to benefit. He says most works have a chain of beneficiaries whom the musicians don’t want to recognise.
Propa says for instance, some producers, managers, session artistes; writers have a portion on revenue sharing, which makes returns so little.
He adds that some of the artistes sold their rights to distributors and managers and they legally have no right to complain when their music is distributed.