Friday 17 May 2013

NEWS BIT: EFE OMOROGBE CHALLENGES KENNY OGUNGBE'S NEC SPEECH ; WANTS TO HAVE AN OPEN SESSION ON NATIONAL TELEVISION



Efe Omorogbe of Now Muzik has challenged Kenny Ogungbe of Kennis Music to an open session. According to the mail I Got

When I learnt that Mr. Keke Ogungbe, founder/CEO of Kennis Music was billed to speak on the topic: Are Record Labels Endangered Species?” at the inaugural Nigeria Entertainment Conference, I wasn’t exactly sure what to expect and it made all a bit more exciting.

I obviously had my opinion on the subject matter. Working with artistes in management capacity and providing label support services to the indie artist had made it quite clear that the label is a necessity even with the advent of the digital era. To me, it was simply a question of adaptability for the labels, the traditional need remains, it was just the modus operandi that needed tweaking.

I was curious to find out Mr. Ogungbe’s perspective and recommendations as to how the label can ensure its survival and profitability. The speech, though highly informative and interesting didn’t adequately address the topic in my opinion. More ink was dedicated to an engaging historical exposition and general music/entertainment industry issues than the meat of the session which to me, was more about the status of the record label in a changing music business environment.

For me, some of the core issues are thus:

a, If an artist can record, mix and master a track on his laptop, produce a viral vid on the same device, publish the audio and visual materials on youtube, promote via social media and secure iTunes and Spinlet distribution by sending 3 emails and possibly become a star, of what use is a label to such an artiste? 

b, As digital distribution gradually become the primary source of label revenue, how sustainable is a system where a telco insists on an 80/20 rev share ratio with a VAS company/aggregator which in turn, takes about half and leaves the label with a paltry 10% to further split with the artiste?

c, If 60% of the current hit-makers are independent, what are the prospects for traditional labels? etc…    
These and other questions were neither directly raised nor addressed by Mr. Ogungbe’s paper but interestingly, that is not even the reason for this rejoinder.  My concern stems not from the issues that weren’t treated but from some of the pious positions taken and controversial comments made by Mr. Ogungbe during the session.

Mr. Ogungbe and I have had conversations on these industry issues for the better part of 9 long years and we know each other’s perspective and antecedents well enough. As I stated during the business session, I have a different side to many of the stories and assertions made by him during the music session. In deference to the speaker and panelists of the business session, the guests and the organizers, I elected to not address his positions there and then but it would be disservice to the industry in particular and the nation in general if these grievous misrepresentations are allowed to be documented unchallenged.

Mr. Ogungbe and Kennis Music did not create many of the problems bedeviling the music industry but in my opinion, didn’t do enough to fight them either. If anything, his actions and inactions, inadvertently but significantly weakened others who were hell bent on taking on the problems. Let me explain.


Joey Ukpong of Styl Plus Music reached out to me early 2006 in a bid to secure Now Muzik’s support for their price re-adjustment move for “Expressions”, the group’s forthcoming sophomore CD. About a year earlier, they had pushed Styl Plus’ debut 4 track, 1 remix EP, “Olufunmi” on jewel cases at N500.00 per unit retail price and it had been hugely successful. Here they were, planning a March 2006 release of an 11 track full length album that market forces a.k.a Alaba pirates dictate cannot be sold for a penny more than N250 retail. It was a bitter pill to swallow so Joey met up with me at our Maryland office to sell a proposition. He said they wanted to insist on a N400 per CD position but reckoned the chances of success would be higher if other top artistes agreed to push their products at the same price. He said he came to us first because Now Muzik represented at that time, a crop of heavy hitters on the scene. And we did. 2face, Sunny Neji, African China and Ruggedman were clients of ours but there was a limitation. Some of these artistes recorded under other labels and the power to make such decision resided with the labels. 2face was on Kennis Music and Kennis was the most influential label at the time so naturally, Baba Keke’s, as we fondly call him, was our first port of call.

Ever blunt and firm, Mr. Ogungbe told Don T, my partner and I that the move was doomed for failure. He posited that the only solution to the piracy scourge was for us to toe the line of the marketers and allow the ones who have been duly licensed by the labels to distribute the music, sell at a price that’s competitive with what the pirates offered. His belief was that the focus should be on pushing volume. Just as the likes of T-Joe and Obaino had argued, if we crashed the price to a point where the margin is narrowed down to about N10 – N25, pirates would be significantly discouraged from the trade. Then the label will be “allowed” to push units in the millions in peace and everyone would be fine. Really? We left downcast and terrified.

After deep analysis of the discussion, we concluded that for a label with the media might that Kennis possessed at the time, it probably was logical for them to adopt that approach and depend on huge volume to break even and make profit. For the rest of the industry however, it portended doom. Promotion is expensive worldwide. Nigeria isn’t an exception. Mass electronic media push budget for the regular label would easily exceed recording and packaging cost many times over and make it increasingly difficult to break even on a N25 per CD – or less- income. For Kennis, they were in heaven. They had access to an obscene amount of airtime on radio and television and made damned good use of it. Their music and talent were engaging content for their television and radio gigs which earned them good money and in turn, served as marketing and promo platforms for their music and artistes. Genius! More so, when for a good while, the competition was subpar and the ratings were in their favour. They ran the roost. A lot of industry guys cowered and sucked up to them for a bit of shine time so it was VERY CONVENIENT to adopt the “crash the price and push for volume” philosophy. Keke Ogungbe and Kennis Music did what no one could knock them for – look out for themselves – ONLY.

Of course, Styl Plus Music and Ahbu Ventures put out “Expressions” in March 2006, sold their CDs at N400 for the first 10 days or so and then- BANG! The pirates unleashed their cheaper alternative. The rest of us didn’t actively support their brave move, and they failed. But the failure was really ours as a collective. Soon afterwards the retail price dropped to N200 and then to N150. The marketers put pressure on the replicating plants to crash production price per unit to N25. Sleeves were pegged at N5 and wholesale pricing sashayed between N45-N50 leaving a N20 maximum mark up for marketer, label and artiste to share. The replicating plants were quick to realize that the boom was effectively over. The cost of operations wasn’t going to be sustainable at N25 per CD and some watched their operations shrink weekly. Some closed shop in no time. We had started selling the plastic sound carrier and paper jacket with a tiny mark up. The music, the content had lost all value. The industry was on a free fall to implosion. We cried out and started work towards some form of organized resistance.

I gave an interview and posited that the music business would implode in 18 months if we didn’t rise up to the threat posed by piracy and improper packaging and pricing. If I was the one Mr. Ogungbe was referring to when he talked about “somebody who said the industry was dead in a bid to seek relevance” and proudly added “and I told people who asked me that it was their industry that was dead, not mine”, it is indeed unfortunate. 

Some of us didn’t agree with his approach. We didn’t think it was feasible to build a business model that depended on moving units in the millions for sustainability. We knew that five hundred thousand units was a difficult mark to hit even in the US, one million was special. That’s why they awarded a platinum plaque for such achievement. We recognized that records moved 100,000 units in places like SA and the label bosses pop champagne. We reckoned that 100,000 units to the Nigerian label at that rate was N1,500,000 max – less maybe 40/50 royalty to the artiste – less than half the cost or recording the album in the first place not to mention additional costs to package, shoot videos and promote. We didn’t just agree with Mr. Ogungbe. Kennis Music may have been satisfied with cheap products, low budget packaging and heavy hype to sustain its business but not everyone agreed. To the likes of O’Jez, Storm Records and emerging forces like Square Records and Mo” Hits, quality packaging must match hype. They invested in quality photography, styling, videos and the industry responded in appreciation. People wanted their products to look appealing. They wanted multiple paged packaging to allow space for detailed credits, lyrics, pictures and the like. N5 per jacket wasn’t going to deliver that. So you can understand my sense of alarm when part of Mr. Ogungbe’s paper stated thus:

“As a people, we deserve the best and quality product. We should never compromise quality on the alter of cheapness. Pirated works can never stand the test of time because the quality is ever and embarrassingly poor”

We came together and started the resistance conversions under the aegis of Music Business Forum at Sweet Sensation, Isaac John, Ikeja. MBF became AM.B-Pro and would later close ranks with eight other industry associations to form the Nigerian Music Industry Coalition. We engaged the NCC, the office of the AGF, the presidency, one another and worked tirelessly towards tackling the piracy problem and resolving the long-drawn collective management imbroglio. We have been in the trenches working with the government, the NCC to fight piracy at great personal cost and risk. The hitherto impregnable Alaba was demystified. They have been a series of raids and arrests. The historic prosecution of the Alaba king of pirates sent a strong warning to the criminals that the NCC and the industry were no longer taking things lying down. Mr. Ogungbe has made little or no contribution that I am aware of, to the fight. Instead, he has continued to stand by an illegal organization that has continually displayed contempt for the law and attacked the same NCC that has worked with stake-holders to fight back the piracy he protests thus:

“Record label owners today see music as bad investment due to the monstrous problem of piracy. It is time that practitioners of the industry should rise up to the challenge posed by piracy as it is killing the Artist, the Record Label owners, the Investors and the Economy”

I want to believe that I am not the only one who noticed the inconsistency between what Mr. Ogungbe’s written speech conveyed and what his spontaneous comments/outbursts communicated: How else does one connect the statement:

“I am encouraged by the recent development in the music industry as it relates to royalty. The tempo should be sustained. When a musician knows that the more airtime his works gets, the more income he earns which is timeless as music content utilization by broadcast stations and some recreational centres; use works that have mass appeal. Artistes and producers based on this are challenged to produce good works to have that followership”.

with the call thus:

“There should not be pirates in the name of collecting societies”

In an obvious attempt to discredit COSON, Mr. Ogungbe advanced the dangerous argument that broadcast stations should have the right to choose which body to license music from based on the repertoire and the power to do competitive bargaining for same. For a long time, some of us disagreed with proponents of a sole CMO situation in Nigeria and this was one of the main arguments advanced by the likes of Mr. Laolu Akins, Mr. Toju Ejueyitchie and Chief Tony Okoroji. They were resolute in their belief that multiple CMOs will breed chaos and become a powerful tool in the hands of users who are unwilling to pay. They maintained that at the end of the day desperate rights owners or their reps will make it impossible to establish and sustain reasonable standards and that multiple system will consequently not deliver the expected dividends to right owners in general. For a gesture of support for his position, he turned to Mr. Chris Obosi whose Megalectrics brand has indeed signed a licensing agreement with COSON and can’t be said to be in agreement with Mr. Ogungbe’s position. To all those who have remained unconvinced that multiple CMOs for Nigeria will work against rights owners, Mr. Ogungbe just presented proof that government made the right choice by approving only one CMO for a category of works!

I need answers. How can the industry, COSON, the broadcast stations “sustain the tempo” when Mr. Ogungbe functions as a top executive in a media empire that have so far refused to pay royalties? How can we entrench the culture of royalty payments when he continues to serve on the board of an illegal organization whose sole claim to legitimacy is a PRS affiliation that has been nullified for over two years? Maybe Mr. Mayo Ayilaran has not thought it expedient to inform the rest of the board and the members that MCSN does not have any affiliation with PRS anymore. But then again, maybe they know but don’t think it is of any consequence.

I have a bunch of other issues yet to address and I am sure Mr. Ogungbe has a different side to my different side of the story so far. Here’s my suggestion. Let’s have an open session, on live radio or television. Let’s have an open debate and settle these issues once and for all. Pick the date, time and venue sir. Just two hours of your time. The industry would be the better for it. I am waiting!

Efe Omorogbe


‘Are Record Labels Endangered Species?’ – Kenny Ogungbe’s Speech At #NECLIVE

By Kenny ‘Keke’ Ogungbe

With the highest humility, on behalf of the Board, Management and Staff Daar Communications PLC; the Proprietor & Operators of Ray-Power FM, Africa Independent Television (AIT), FAAJI FM, Daarsat and the Nigerian music sector, I wish to express my heartfelt gratitude to the Organizers of this historic Event for honouring me first and foremost as one of the Guest Speakers to make a presentation on – the Entertainment Industry with an amplification on Record Labels – an appraisal of the challenges, fortune and the prospects.
Secondly; I also wish to thank you for the recognition of my modest contribution to the Broadcast media and the Entertainment industry in particular hence the invitation in the very first instance which is an affirmation of the saying that ‘experience is the best teacher’ and ‘he who wears shoe, knows where it pinches’. With the highest regards and respect, all the Guest Speakers here carefully selected have individually and collectively being the best brains behind the remarkable successes recorded by the Nigerian Entertainment industry in the past decades.
Distinguished Ladies and Gentlemen, join me in giving a round of applause to both the organizers and my other respected Guest Speakers. Like the lizard glowingly stated in one of the great works of the now late Prof Chinua Achebe ‘If no one praises me, I will no doubt praise myself’ Mr. Adekunle Ayeni and his resourceful team; the publishers of Nigerian Entertainment Today (NET) posterity will record today’s event eternally as the future is of utmost concern to you all and he who plant a seed for the future generation; is indeed a leader and a statesman.
Entertainment according to Wikipedia is something that holds the attention and interest of an audience or gives pleasure and delight. It manifests in two forms. It is either an idea or a task.
Succinctly put, the operative words and concepts in the above definition are: Pleasure and delight. An intellectual analysis of the idea and task that ultimately give pleasure and delight suggest a peep into the omnipotence of the Almighty and His creative ingenuity. The capabilities of intrinsic efforts to elicit pleasure and delight which also is capable of holding the interest and attention of an audience is then not restrictive to humanistic capabilities alone but it is also inclusive of earthly resources and other creations. Nature and animals are equally capable of being sources and forms of entertainment.
Based on the above foundational analysis into this presentation, we can now itemize both human endeavours and nature’s resources that are entertainment related i.e.  storytelling, cultural performance, games, sports, dance, musical performance, comedy, magic, fireworks, rallies, puppetry, animal shows, tourist sites, cinema and films amongst others.
The topic for which we are here gathered is suggestive of two things. One; the ingenuity and the exploitative capability of man in making a hitherto hobby; metamorphose into becoming a source of revenue. In the second half of the 20th century, sequel to the technological revolution which gave rise to the impressive and the remarkable growth in the media industry most especially the broadcast sector due to the audio-visual capabilities, natural talents of man in entertaining his community evolved into an industry thus giving birth to the entertainment industry.
The Fatai Rolling Dollars, the Kokoros, the Dan Maraya Jos and others began to earn revenue from their talents and intrinsicness. The Ali Babas out of the talent of jokes which was hitherto fantasy for children; meant to in still values and discipline through the mental artistry of romanizing personalities and situational conflicts for instructional purposes is today one of the biggest industry in the country – comedy.
Distinguished Ladies and Gentlemen permit me to take you down memory lane on an historical excursion which will give us the opportunity to see and appreciate the aptness of today’s gathering and our collective efforts of nurturing an industry that is fast emerging as one of the greatest foreign exchange earner and international strategic branding machinery for our great country.
I most respectively refer you all to the April 8, 2013 edition of The News Magazine – cover story: Chinua Achebe – The Man, His works and Biafra – Top writers pay tribute.
The cerebral Odia Ofeimun as if the import of our gathering was on his intellectually sagacious mind, has this to say on society’s utter disregard for the impact and contribution of Entertainment/Music to the society:
‘For instance, one of the least celebrated characters in Things Fall Apart is actually the most serious and most important character – Unoka, the father of Okonkwo. Everybody remembers that Musician, who like Ulysses, could play flute and everything could either go to sleep or wake up; depending on what the flute meant to do. He was so good at it that his only problem was that he couldn’t do what everybody in the society was doing. He was not a farmer; he did not want to be judged in accordance with the standards of the farmer. He was a Musician and as an artiste, he did so well’
From the above, Odia Ofeimun amplified the society’s error of judgement in professional ranking and estimation. Heroism and professional egoistic tendency have eclipsed intrinsic talents and passion. In Things Fall Apart, everybody applauded Okonkwo’s valour and heroistic capabilities which unfortunately led to his down fall. The Musician who was humble and dexterous to the extent that his flute whenever his son – Okonkwo was on a heroic mission, the sound of his father’s flute invigorated him to his greatest possibilities. Paradoxically, the same society saw his father as a weakling. He; it was who entertained the entire community at social events. He was the unsung hero who nurtured their emotions and entertained the entire community. Whenever he blew his flute the community was joyous. In the natural law of division of labour, he was not a good farmer but an exceptional musician who others were incapable of replicating, copying and ‘pirating’.
From Odia Ofeimun’s intellectual excursion, I will now bring us back to the present. The music industry has transited from being a mere communally domesticated endeavour into a global multi-dollar business.
The entertainment industry/music is the blood of any nation. When a person suffers from anemia the chances of death is apparent. From the Stone Age, man has been known to have created and engaged in one form of entertainment and the other. From storytelling to cultural festivals, there have existed artistes who have contributed greatly to societal good, pleasure and well-being through their various dexterousness in either drumming, singing or dancing.
In modern society which is premised on technological revolution, the media have made the entertainment industry gained global acceptance and recognition. Today, products now have universal appeal and global markets. Jeans is worn globally; Prof Wole Soyinka is a global citizen due to his exceptional literary proficiency. Late Prof Chinua Achebe’s seminal book – Things Fall Apart sold about 12 million copies worldwide. The book has been translated in to more than 50 languages. Possibly the only book with such global feat in recent history. The music works of Fela Kuti is today a global brand. Our own Omotola Jolade Ekeinde was recently voted amongst the top 100 most influential personalities in the world.
From the above, we can appreciate and acknowledge the impact of the entertainment industry and the entertainment professionals in the global scene. The monetary worth of the various personalities is better imagined and their contribution to the national economy is also better left for posterity.
No doubt, the music industry is facing serious challenges which are not restrictive to the sector alone but other professions too, the nation and global obstacles that are inimical to the attainment of the inherent capacity of the realizable potential therein. The problem of infrastructural deficiencies, lack of capital, operational structures, effective management of the industry and most regrettably is the monstrous problem of piracy. These challenges are attitudinal, institutional and sometimes a function of sheer ignorance on the part of the artiste themselves. Collectively, we can improve on the situation and ultimately make things better for our society.
After taking a holistic view of the entire entertainment Industry, l now wish to focus on the topic for which I have been requested to appraise – Record Labels. In the 60′s, Foreigners owned Record Labels due to the technological requirements germane for the production and replication of musical works into forms that could be owned by majority of the people that could afford them – Albums.
Natural talents were abound then and now. The discovery of talents now is very easy and the opportunity for talents nurturing to national and global lime light is very easy considering the avalanche of Radio and Television stations operating in the country. Music today is one of the most fundamental elements and sine-que-non in content aggregation by broadcast media operators.
The role being played by some corporate bodies in talent discovery is indeed commendable. Every year, we are glued to our television sets watching budding talents being discovered and exhibiting; admirably their potentials. As a record label owner, my only advice is that budding talents should get good education first and foremost. Competitiveness is a function of core value and uniqueness. Great musical works is lyrics driven next to the voice quality. I am greatly worried with the present situation of one song stars. Why are we not able to replicate the great artistry, resourcefulness and the creativity of the King Sunny Ades, the Ebenezer Obeys, the Felas  etc! etc!! etc!!!
Record Label owners today see music as bad investment due to the monstrous problem of piracy. It is time that practitioners of the industry should rise up to the challenge posed by piracy as it is killing the Artiste, the Record Label owners, the Investors and the Economy. As a people, we deserve the best and quality product. We should never compromise quality on the altar of cheapness. Pirated works can never stand the test of time because the quality is ever and embarrassingly poor.
Record Label owners should make the works of the Artiste on their labels available at designated markets/shops. Scarcity sometimes encourages piracy. The strategy is to make the product available when the product is accessible, the likely hood of pirated copy consumption will be low. I am encouraged by the recent development in the music industry as it relates to royalty. The tempo should be sustained. When a musician knows that the more air time his work gets, the more income he earns which is timeless as music content utilization by broadcast stations and some recreational centres; use works that have mass appeal. Artiste and Producers based on this are challenged to produce good works that have follower ship.
The various governmental agencies that are saddled with the responsibility of supervising the music industry should live up to their expectation and duties. The works of Arts/Entertainment is now a universal product with global appeal. Musicians are national Brands. The National Broadcasting Commission (NBC), the Nigerian Copy Rights Council, the National Film and Video Censors Board amongst others should ensure that all the artistic works emanating from Nigeria, are of world standard because mentally, such works have assumed the role of being national Brand Ambassadors. Our own Lagbaja was amongst the few selected African musicians that made the continent proud with the epic song – ‘so why’.
Lucky Dube was a pride to Africa. He was a global Musician. He was to Africa what Jimmy Cliff was to Jamaica. Eedris Abdulkareem through his musical works rose to world recognition when he joined the greatest African of our time – Nelson Mandela to receive the Olympic Torch in Egypt when it was brought to Africa the very first time. Is there any recognition that is greater than being selected to part of the greatest and the best from a continent? The entire human race watched the historic event. That is the power and the influence of being an Artiste and being good. What is good is always good. In conclusion, I will like us to imagine a Lagos in a Saturday; without newspapers, without radio, without television, without music, without Comedians, without Nollywood  without beautiful dresses on our streets, without books, without the street decorations like billboards, road signs, without eateries, without football matches to watch either on television or live at the Onikan stadium.  That is the power, the impact, the influence and the potency of the entertainment industry. Things can only be better for the entertainment industry.
Thank you and God bless.
Kenny ‘Keke’ Ogungbe, Founder/CEO of Kennis Music
This speech was delivered at the inaugural edition of the Nigerian Entertainment Conference held on Friday, April 26, 2013 at the Grand Ball Room of the Eko Hotel and Suites, Lagos Nigeria.

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