AIRCO ANNUAL GENERAL MEETING
CHAIRPERSON'S REPORT
7th OCTOBER 2009

WELCOME
Welcome to all our members, distinguished guests and funders, the Department of Arts and Culture, and my fellow board members.

I would like to thank everybody present here today and to those who could not make it, but yet they still believe in the mandate, vision and purpose of AIRCO. I wish to thank our funders, the DAC, for their continuous support in upholding the validity of a much need transformation within the industry, which gave birth to AIRCO.

Since our last AGM in October 2008, as the leadership of AIRCO, those given the challenging task of delivering to the industry, we have experienced many challenges which we expressed with complete transparency, to you our members, at the Special General Meeting of the 31st August 2009 at the Museum Africa Auditorium.

I wish to thank you once again for the intervention and direction you gave. Today I stand in front of you to say that much work, sweat and sleepless nights have gone into seeing that the train, then derailed, is now back on track.

The Board of Directors has worked hard at ensuring that the blueprint which we have developed for the Association and its Constituency is both realistic and achievable.

Realistic in the sense that the benefits we are about to deliver to you are in line with all your needs. Whether you have just begun operating, have been operating your business for five years or more.

Achievable because we as the Board of Directors have made a commitment in ensuring that those goals and the benefits we will announce to you today are measurable, detailed and with dates to in order to ensure that we, as a board, are accountable to you as the members of AIRCO.

In June, on the 11th 2009, we met as the Board to deliberate on issues which were pertinent to our members as 1) entrepreneurs and 2) the sustainability of their businesses. We worked to deliver a Tactical Plan, which has been re-worked, re- researched, and measured in order to secure the future of the independents businesses within the recording music sector.

Many of you have communicated your appreciation and concerns through our administrative office. And together with the administrative office, we have sat down to dissect your needs and to ensure that we as AIRCO deliver on those, in totality, given the resources that we have.

I am glad to say that we as AIRCO have a Tactical Plan which navigates the path we will follow, not only in the short term, but also the long term. Please refer to the Tactical Plan Annexure.

Today we launch our Project 100 days in which we have committed ourselves as the Board to ensuring that we deliver to our constituency, tangible benefits within the next one hundred days from today. But before I go into detail about Project 100 days, I wish to share with you the overall direction of AIRCO’s vision.

AIRCO – The Association of the Independent Record Companies is a non profit NATIONAL industry association, proactively serving and representing the interests and development of South African independent record companies, across South Africa and the world.

Our main objective is to foster an ever increasing marketplace for South African independent music and assist in the long- term development, growth and success of South Africa’s independent recording industry.

Currently AIRCO has R392 952.01 in the bank. Most expenditure to date has been on maintaining the office through rental, staff – one administrator, board meetings and stationery. The remainder of the AIRCO budget has been allocated in delivering Project 100 days, which I will discuss later.

At the Special general Meeting, you the member of AIRCO voted to have 12 portfolios which you deemed will deliver to every record label’s need. I will mention those portfolios and the respective heads as resolved at the 9 September 2009 Board Meeting: may the board members stand as I read your name so I can re-introduce them:

• Chairperson – Dodo Monamodi
• Skills Development – Dodo Monamodi & Caroline Sithole
• Marketing & Communications – Mandla Maseko
• Broadcast – Ken haycock
• Website/Digital - Roach
• Anti Piracy – Ashley Stone
• Local Content – Ashley Stone & Itumeleng Radebe
• International Affairs – Harvey Roberts
• Business Affairs – Dan Raseluma
• Legal & Risk – Jonathan Shaw
• Sponsorship – Antos Stella
• Transformation – George Lusenga

Broadcast.
AIRCO is of the view that there should be one collecting society representing all sound recording owners and performers irrespective of any affiliation, such a society should function independently. The current status is that AIRCO and Sampra are in a process of concluding a full service agreement with Sampra for the collective licence of AIRCO's members of their needle time income without requiring our members to join RiSA or Sampra. Further more Sampra has agreed to offer AIRCO a seat on its distribution committee.

Local Content.
The music industry, like any South African industry, is in infused with the legacy of apartheid's political economy. Furthermore as a cultural industry, the local Music Industry suffered additional setbacks because indigenous culture was actively suppressed by the regime. One of the most devastating aspects of this legacy is that the local music industry is not developing as fast as it should. While a large percentage of music sold in South Africa, played in our Radio Stations and television stations is not only of an international origination but it is also controlled by the majors, international affiliated companies and only a small percentage is credited to local music sales.

It will furthermore negotiate with media guide to publish airplay of AIRCO members' recorded music and videos' online on a cost effective basis. This Portfolio will address this devastating conditions on behalf of our membership.

Anti Piracy.
There was a breakdown in terms of a working relations between RiSA and AIRCO for the previous terms, its only now this term AIRCO and RiSA are still finding their common grounds where they can engage themselves as a unified industry and collectively redress issues around Piracy, Skills development and broadcast. There has been a number of meetings held with AESA (Association of Entertainers of South Africa - 400 members across South Africa) on where we can merge our efforts, but remaining independent bodies.

Legal & Risk
Will oversee that AIRCO as an Association adheres and not only participates in legal policy procedures, but also has a voice in influencing the future of the policies which will drive the industry. It will furthermore ensure that AIRCO members has a professional legal support in times of a need and a good representation of their daily affairs.

Business Affairs
Must guide the day to day business affairs and ensure that those are within all good corporate governance practises.

Sponsorship
is the sustainability of AIRCO’s vision and presence. The portfolio which will ensure that this association continues to be sustainable beyond reliance on government funding. We thank the DAC for their belief in AIRCO, however, we also realize that we cannot rely solely on government funding alone. And in order to drive the vision, we who sit under one common goal today; we know that passion must drive us to look beyond our funder’s generosity, in order for transformation to take its throne.

Skills Development:
This portfolio seeks to address the issue of skills development through workshops, particularly in areas that are more underdeveloped, areas outside the province of Gauteng. We feel that many of AIRCO members around Gauteng, are more privileged and better resourced than those who are in other provinces. For this reason, we seek to decentralise the music industry and to widen opportunities in the market place. We shall achieve this by engaging in workshops, ensuring that AIRCO members get the necessary, and the most needed skills to develop and run their own small record labels within the industry.

Digital /Website Technology
has brought an increased diversity of music platforms, the entry of new players not traditionally involved in music distribution and new opportunities for consumers to access music. It is also pointing the way to mobility. As online and mobile channels converge (as they seem to be doing), mobility is likely become an important driver of the development of future music distribution models. As a result, traditional models of music distribution are no longer the panacea. This being said, the world is now the market – technology has made it thus. Therefore any analysis of the South African dynamic and experience needs to be placed within the global context. The Digital/Website portfolio must provide all opportunity. Opportunities which divide us because we may all not know the new know how’s.

This portfolio is our gateway as Africans/South African independent record companies, which opens more doors to bring to fore model which integrates the old traditional model of running a record label with the new digital opportunities.

International Portfolio
Following recent elections amongst its membership, Merlin – the global licensing agency representing the world's most commercially important basket of independent music rights unveiled its new board on September 4th, 2009. We as AIRCO are proud to announce that one of our board members has been elected to sit on the Merlin board. Merlin has worked to protect the value of its members' repertoire against infringements. It has been outspoken in its criticism of ventures that it feels devalue independent rights, such as the major-label led MySpace Music, and has struck a host of international digital deals for its members with companies including Spotify, Catch Media, MUZU.TV and i-Mesh, with a number of other deals in the pipeline and soon to be announced. We wish Hilton ‘Roach’ Roth, the best and trust that through the skills development workshops and his efforts to represent South African Independent Record Labels, our constituency will benefit greatly.

Marketing & Communications.
This portfolio will create awareness about the role of AIRCO in the South African music landscape, membership recruitment. Liase with media and keeping members aware of marketing opportunities in the music industry. AIRCO delegation to engage Provincial Championship.

Transformation
The music industry in 15 years since the advent of a new democratic government presents the same challenges as was 20 or 30 years ago. This is amid to all efforts made both by progressive civil societies and government who are working tirelessly and selflessly towards a transformed industry. Regardless of a variety of both socio-political and economic policies put in place, I quote my ex-chairperson Eugene Mthethwa 'the industry has been able to maintain the Irish Coffee System that marginalises the majority that constitutes the labour force/practitioners against main stream economies of the music industry. In the past 13 years we have moved from "systemic exploitation" to "systemic exclusion" of the very majority that remains poor and disadvantaged. As AIRCO. We commit ourselves as AIRCO Transformation Committee to be the beacon of hope in bringing the much desired change that will complement The AIRCO’s broader vision of levelling the playing field both socially and economically for a broader participation of all South Africans as intended in the BBBEE charter.

AIRCO calls to all members that have taken up these portfolios to recommit themselves and work toward the common goals of the association.

The PowerPoint Presentation is concentrates on Project 100days. This is what we have committed ourselves to. These are the benefits you can expect from AIRCO within 100 days from now. You can also download the tactical plan from www.airco.org.za.

Today, we are concentrating on the next 100 days and I wish to let you know that we have identified 4 priority areas.

In no particular order these are: Skills Development; Broadcast; Marketing & Communications; Legal & Risk and Sponsorship

This PowerPoint presentation outlines AIRCO 100days priorities.