Sheer Music boss on how to survive digitisation – part 1

It is against this backdrop that music can now be easily accessed through downloads and streaming. In addition, technology is also enabling artists not only to record their music but to directly reach out to the consumer.

Music In Africa spoke to David Alexander, managing director of Sheer Publishing – one of the largest independent music publishing companies in South Africa by market share – to get a sense of where the music industry stands and which direction it is taking amid digitisation.

Alexander, who joined the music industry at a time when publishing was dominated by the five multinational record labels – Warner, EMI, BMG, Sony and Universal – said much had changed since he founded Sheer Publishing in 1996.

“Changes from cassette to CD then to DVD and now digital has seen the sales market disappear,” he said. “For instance, we’ve come from selling 10 songs on an album to selling one song on a download and then to a single stream which has taken a lot of value out of the industry for both writers and publishers. We as publishers used to make a large percentage of our income from mechanical royalties, which came from CD sales. This has now been put under a lot of pressure by platforms such as Apple Music, Spotify, Tidal and other music streaming or download sites.”

Physical vs online sales

Since the digitisation of music, subscription streaming services have significantly aided the music industry in terms of publicity. Physical sales are still prevalent in Africa but most CD or cassette albums are used as promotional material to get people to attend live events.

“More recently we are seeing a trend in streaming that has further devalued the sale to the public. Now you’ve gone from buying a CD album for R150 ($10) to R10 a song download to a fraction of a cent stream. How do we compete in this industry?” Alexander said.

“But what has improved over time is the money that comes from public performances. Radio stations are also a good business because we get to cut into a certain percentage of that income via collective societies like SAMRO [the South African Music Rights Organisation]. Composers and publishers have thrived, though record labels are struggling to find an alternative to replace the traditional sales model.”

Alexander said Sheer Publishing had invested in a production service and a stock music library called Skhumba Music to expand the company’s portfolio of services. “We have invested in Skhumba Music and various composers whose businesses we help manage. This has helped us to continue to be relevant while the broadcast environment changes.”

“The administration that backs the three different businesses is solid and focused on providing a solution to each of those separate businesses. I’m grateful that 21 years later we are still functioning and have some of the most awesome songwriter and publisher clients.”

Read part 2 here.