Starting in February 2020, the new board appointed qualified attorney, Mark Rosin as CEO. He is on a two year contract as a turnaround strategist. Rosin, 61, has worked in the South African music industry for 30 years, for record companies, composers, publishers and broadcasters. He left a law practice at Rosin Wright Rosengartenin 2011 to join the firm’s biggest client, eTV, where he worked for nine years including as COO and head of strategy. He has specific instruction to identify a suitable successor within 18 months that will fit the employment equity status. He says, “I got one big talent – I know what I don’t know.”
SAMRO was started in 1961 by Gideon Roos, former head of the SABC and son of the first Springbok rugby captain Paul Roos. Gideon was supported by Eric Gallo, the founder of Gallo Africa, and the UK's Performing Rights Society (PRS). Roos was followed into the SAMRO CEO position by his son, Paul, who stepped down with the Roos family in 1997.
SAMRO owns the monopoly right in South Africa to issue the global identifiers IPN#s for composers, authors, arrangers and publishers; andInternational Standard Musical Work Code (ISWC)for musical works.
SAMRO collects only 15% of its potential market, which is estimated at up to R4 billion, due to a paucity of licenses deployed at music venues, shops in malls, churches and shebeens across the country. Over the last six years SAMRO has suffered a steady decline. The organization’s annual reports show gross revenue in 2013 at R371-m with year-on-year growth of 9%. By 2019 gross revenue was R475.6-mand the year-on-year growth only 0.1%. The operating loss has steadily increased from R30.71-m in 2013 to R50.8-m in 2019. The cost of staff, which amounts to 68% of total SAMRO spending and is the main reason for the cost-to-income ratio of 32%,more than double PRS’s 14% in 2018. Distribution revenue for SAMRO’s 17,000 members has been dipping considerably over the last 10 years, from 81% of net profit in 2010 (R245.97-m) to only 63% (R297.2-m) in 2019.
All authorship and ownership claims, the splits and other metadata is stored on a CIS-net database controlled by the International confederation of Societies of Authors and Composers (CISAC). CISAC has 239 member CMOs (collective management organization) across 123 countries.
SAMRO is an unregulated body. There are various institutions in South Africa, such as Copyright Intellectual Copyright Commission (CIPC), the Department of Trade and Industry (DTI), the Competition Commission and The Financial Intelligence Centre empowered with oversight in the music rights industry. None of them have got involved to date. Minister Mthethwa announced a special commission of enquiry in April 2018 which ironically never occurred.
This will be Rosin’s biggest challenge yet. It’s an opportunity “to give something back,” he says, to an industry he has enjoyed a long career in.
Among the challenges, Rosin says, are revenue costs, staff morale, union issues, distribution accuracy, board governance and factionalism. “Where do I focus here?” he says. “I have to prioritize at some point.”
Starting in February 2020, the new board appointed qualified attorney, Mark Rosin as CEO. He is on a two year contract as a turnaround strategist. Rosin, 61, has worked in the South African music industry for 30 years, for record companies, composers, publishers and broadcasters. He left a law practice at Rosin Wright Rosengartenin 2011 to join the firm’s biggest client,eTV, where he worked for nine years including as COO and head of strategy. He has specific instruction to identify a suitable successor within 18 months that will fit the employment equity status.
Towards a New Monitoring System
Proper data management and monitoring could accurately account for the flow of royalties, but various industry sources suggest there has never been such at the organisation, due to the controversial and costly Zeus monitoring system (R75-m in 2013).
One of Rosin’s KPIs (Key Performance Index) is to fix the royalties issue, and “distribute more money to composers, distribute a better ratio of income to costs and get the ‘morale right’,” as he put it.
He has proposed a “dual process,” including a “proper analysis of what we have got, its short comings and cost analysis and then a look at a fresh system, that is “future proof.”
Towards a New SAMRO
For 2020, Samro's biggest debtor, the SABC, is currently in progress with payments of a “confidential amount” to be concluded end of April. An agreement is also on the table for major debtor Multichoice, estimated at between R80m and R90m.
The SAMRO HR department has only four employees dealing with process, strategy, leadership and a myriad of other internal issues and conflicts. This has led the two non-executive independent board members, chairperson Nicholas Maweni and deputy chairperson of the audit and risk committee, Sisa Mayekiso to seek to “restock the board with more business and people management skills,” as chairman of the board Nicholas Maweni put it.
Mayekiso has further proposed an internal audit to ensure that there is no collusion and syndicates on the board, which could be crucial. In November 2019, the previous board was fired on a Section 71 of the company’s act and a new board elected. The new board proceeded with litigation against the previous board for receiving “an additional R1.4m in fees,” claimed a source, clarifying that these fees were for an extra twenty special meetings relating to Arab Emirates Music Rights Organisation (AEMRO) deliberations.
AEMRO was a very expensive “lunch in Dubai” as the chair of the board at the time Jerry Mnisi described in an open letter. Samro wrote off R49.5m in its 2017 financials on AEMRO, and in 2018 a further R9.4m impairment cost. The Sekela Xabisa forensic audit into this labelled AEMRO, “a concoction.”
Rosin has inherited a situation where the Samro board are scrapping over R1.4m paid in fees, but turning a blind eye to the R58m that disappeared. “In an institution like this the question is how much time do you have to spend looking in the review mirror? If I do that, I am never going to fix this thing,” explained Rosin.
While Rosin has his work cut out for him, turning SAMRO around can only be good news for the CMO, its members as well as the industry as a whole.