High Court Halts Skiza, Hello Tune Payments: A Turning Point for Music Royalties in Kenya
In a landmark ruling, the High Court has ruled that royalties paid by Skiza and Hello Tune to CMOs should be suspended until a matter raised against the two artists is adequately resolved. This is an implementation of the 2022 Copyright Amendment Act that has been hailed as one for artist rights, but in reality, the road to equitable remuneration might prove a lot tougher than initially perceived.
The Court’s Decision: Legal Wins or Unforeseen Challenges?
In respect of interim orders on a dispute involving ring-back tune revenues, Justice John Chigiti has issued injunctions blocking Safaricom and Airtel from transferring ring-back tune revenues to the CMOs for fear of undermining the enforcement of the recently enacted law of revenue sharing. The law, which stipulates that telecos must pay artists directly, will give artists 52% of the revenues generated, as against the paltry 16% previously received from services such as Skiza and Hello Tune royalties. The turn of events arose out of a litigation initiated by artists Justus Ngemu and Saul Esikuri, who allege that the Kenya Copyright Board and the relevant governmental agencies have not acted to enforce the 2022 law.
While the music industry celebrates the judicial intervention as a long-delayed victory for the artists, there are a bunch of decision-making and operational matters that may complicate the implementation thereof. A major concern has been the inability of existing infrastructure and logistical setups to deal with direct payments to artists, an assumption that is implied in this ruling. CMOs, regardless of the criticism, have been involved in this very aspect: integration of music services, reporting of revenue, and payment to artists within time.
Existing Contracts and the Risk of Premature Intervention
The 2022 Copyright Amendment Act does require that artists gain a bigger share of the revenue, but it also contains provisions allowing existing contracts between artists and CMOs to remain in effect until they expire. So, in a way, the court is viewed as intervening in private arrangements that are legally binding. Safaricom and Airtel argue that both remain bound by the respective terms and any immediate change would destabilize the contractual parameters upon which the artists themselves have rested.
Besides, the amendment gives the telcos pathways to exiting the adoption of the new payment modality without an abrupt disruption. On the other hand, the current freeze on Skiza and Hello Tune royalties could, in in anticipation, knock down valid contracts, perhaps even before expiration, thus causing legal uncertainties for all stakeholders.
Logistical Hurdles: Are Artists Ready for Direct Payments?
While it is a good idea to give artists more control over their earnings, the ruling overlooks the logistical difficulties in implementing direct payments. CMOs presently shoulder most of the technical and administrative tasks involved in Skiza Hello Tune royalty payments, such as music integration, subscriber management, and financial reporting.
Without a clear and convincing substitute for these intermediaries, the situation could cause delays in payments, misallocation of royalties, or outright misappropriation. While having a direct system of payments to artists would be highly preferable, its implementation calls for investments in infrastructure, and there is no clarity yet to state that Safaricom and Airtel are fully prepared for such a system. The resulting turbulence would be far too widespread with artists faced with delayed payments instead of faster ones.
The Question of Judicial Overreach
Another question raised by the Kenya Copyright Board and other stakeholders is whether the court has overstepped its authority, intervening in private contractual matters. From the court’s perspective, the enforcement of the Copyright Act is an occasion for fairness, but the law never projected an obligation on government agencies to directly oversee or intervene in every private contract.
The parties are primarily responsible for ensuring compliance: the artists, telecom operators, and CMOs. The Copyright Board has stated that there is no statutory enforcement mechanism for them to directly oversee these contracts, and that the artists should first have tried other aspects of law for enforcement before requesting the intervention of the courts.
The court’s decision could be deemed to have rewritten the terms of contracts, thus potentially constituting judicial overreach by not only encroaching on the contractual autonomy of contracts but laying the groundwork for more unintended consequences.
The Potential for Industry Paralysis
While the ruling might seem a victory expressly for the artists, the freezing of Skiza and Hello Tune royalties could worsen the financial plight many musicians are currently experiencing. Given that royalties amounting to millions of shillings are currently being held in abeyance, the artists may be denied their very livelihood when they may need it the most through the court process.
The freeze may actually serve to delay somewhat the royalty payments that the law wanted to see expedited, thus leaving the musicians in misery during the legal process. On the other hand, the indefinite period without a fixed time structure for the case resolution will make it worse for the artists, for they must wait with their financial future hanging in the balance.
Reforming the System: A More Nuanced Approach
While the Copyright Amendment Act 2022 could be a great opportunity for Kenyan artists to increase their income, a much more nuanced approach has to be taken toward its successful implementation. Rather than relying on court orders to upset settled agreements, stakeholders ought to see moving towards direct payments for Skiza and Hello Tune royalties as a gradual transition process.
Telecom companies should engage CMOs along with the Kenya Copyright Board and the artists themselves to brainstorm a new payment mechanism that is sound and transparent in its operational functioning. There is an urgent need for clear and lucid regulations, an improved reporting system, and technological upgrades to see to it that the proposed payment model really works to the advantage of all.
The government and regulatory authorities should put in place governance and oversight systems to enforce compliance in such a way that artists fully benefit from the law, without dismantling the pre-existing infrastructure responsible for the very success of Skiza and Hello-Tune-related services.
Balancing Artist Rights with Practical Realities
In conclusion, although it is certainly a milestone moment for the music sector in Kenya, one must be cautious about how the ruling is seen. The road to fairer Skiza Hello Tune royalties is far from being a simple case of freezing payments or doing away with intermediaries. Instead, the implementation of a clear-cut and holistic measure, based on incremental reform, transparent accounting, and an efficient payment system, will help ensure that artists stand to benefit from the legal changes without unintended adverse effects.
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