Association of Independent Record Companies South Africa - Chairman's Report for the 2nd AIRCO AGM

Introduction:

Almost two years into its existence AIRCO is evolving into an organisation that is giving voice to and addressing some of the frustrations experienced in the past in the Independent sector of the South African music industry.

Whilst there is clearly a long way to go, the early signs are encouraging. This last year has seen the organisation make significant progress in a number of critical areas, and more recently employ a full time experienced administration officer in Kgomotso More, a placement that has already improved the capacity of AIRCO in the functioning of its day-to-day activities.

Prior to Kgomotso’s appointment, AIRCO’s day-to-day business had been run on a strictly voluntary basis, with members of the executive and heads of committees having to juggle time between the running of their own businesses and their participation in the functioning of AIRCO. We would like this AGM to increase number of board members be increased to 12 to increase the association’s capacity to deal with the challenges of the future.

There remains a great deal to be done in stabilising the ship, and setting on the course that will maximise the benefits to our members. Indeed, given the limited resources that have been available, it is no small measure of the dedication of the executive and committee members that we find ourselves having made the progress we have thus far.

During the course of this year, we were forced to deal with the resignation of our Chairperson Irfaan Gillan, who had as a founder member contributed significantly to the establishment and growth of the organisation. Irfaan left to pursue interests outside of the industry and I know I speak for the executive and the membership at large in thanking him for his efforts as Chair and wishing him everything of the best in his new endeavour.

There are a large number of areas where AIRCO can, and will in time and with adequate resources, make a difference. These areas are not always agreed upon by all members, and by those Independents who have yet to decide whether of not to join, and it is critical that we identify the most urgent needs of our membership realistically, and focus all our energies on applying ourselves to addressing these issues.

We cannot solve these problems without the active and enthusiastic participation of more of our members and I would like to take this opportunity to encourage all of us to strive to increase the membership base, and encourage members to employ their collective experience and skills for the benefit of the sector.

The industry is in need of transformation, and lags behind the country as a whole in embracing this challenge. AIRCO should be at the forefront of implementing change in this regard, as by definition we are truly representative of the local industry.

The current Committee portfolios are represented here today by their heads, who will be available for questions later in the meeting.

They are:

Anti Piracy, headed by Eugene Mthethwa.
Broadcast, headed by Ken Haycock.
Digital, headed by Clive Hardwick.
Membership & Marketing, headed by Antos Stella.
Skills Development, headed by Dodo Monamodi.
International Relations, headed by Harvey Roberts.
Legal & Finance, headed by Alex Agulnik.

With reference to Transformation as mentioned earlier, Eugene has indicated his willingness to form a committee tasked with addressing this issue.

We have worked extremely closely with the Department of Arts and Culture, who have funded our operation thus far, and our aim is to continue this close relationship with the objective of achieving our common goals, namely the growth and the enhancement of the sustainability of the local industry. To this end we have made a significant contribution to the recently held Moshito expo at Newtown in Johannesburg.

In our efforts to be a truly national organisation, workshops have been held in all provinces, except Limpopo and Northern Cape, which will be visited soon after the AGM. A plan has been drafted to embrace the meaningful participation of members from around the country, be they from the urban or more rural areas.

Communication with the sector remains a challenge, and the launch of the new website here today will we hope help to facilitate a stronger link between our members and the executive as well as providing many real and tangible benefits on a day-to-day basis. I would like to thank Roach from African Dope Records in Cape Town for his running of this project and congratulate him on making it available to coincide with today’s meeting.

Recruitment and Membership

Under the leadership of head of Recruitment and Membership Antos Stella, AIRCO’s membership has grown from the initial database, whilst the AIRCO profile and message has been further communicated to hundreds of potential members through the (ongoing) series of national recruitment drives and workshops held in centres around the country over the past few months. Significant steps have been made in commissioning key individuals in each of the centres to act as “recruitment agents” on behalf of AIRCO; people on the ground who will actively seek to attain the membership of new and present non-member independent record labels.

Anti Piracy

The AIRCO Anti-Piracy Sub-Committee headed by Eugene Mthethwa, has one of the most challenging portfolios imaginable. In spite of efforts made to bring all stakeholders together, there remain problems in this regard, and the failure of all parties to unite in common cause to fight piracy hinders everyone’s efforts to make meaningful progress. AIRCO’s Anti Piracy committee’s belief in a united strategic alliance remains, and efforts continue to bring about the realisation of this goal.

Broadcast

Under the guidance of chair Ken Haycock, the broadcast sub-committee has met with the SABC to discuss areas of concern, including the recovery of retrospective video licensing income, improved local content opportunities, transparency in play-listing procedures, reporting of airplay, top and tail announcements for local music videos and songs, free interview opportunities for local artists and the issue of payola in broadcasting.

The sub-committee has been assured of support from the DAC in petitioning the Department of Communication, ICASA and broadcasters for an improvement in the promotion and play listing of local content, which in turn will generate additional income for members.

Needletime

AIRCO has prepared a document clarifying its own position on the contentious issue of needletime after extensive research and consultations with their international affiliates, government agencies and other collection societies regarding possibilities for the establishment of collection societies and for the implementation of Performance Rights of recorded music works, whilst also engaging in discussions with RiSA and other involved parties (e.g. DAC, collection societies and broadcasters) concerning its proposed collection schemes. The sub-committee is in the process of furthering talks with SARRAL and SAMRO.

AIRCO is of the view that there should be one, non-aligned collection society that administers the Performance Rights on behalf of all record companies and performers. It is AIRCO’s belief that the implementation of needletime has been delayed long enough and that the establishment of an effective collection society should be fast tracked.

International

AIRCO is the official South African representative at WIN, the Worldwide Independent Network of Independent Label Associations, and as such attends the twice yearly board meetings. WIN represents a broader worldwide movement by Independents around the globe to take control of their own affairs and move away from the influence and in some cases control of the Major record companies.

In the beginning of September, fifteen representatives from global independent music rights holders were installed as the inaugural board of Merlin (the world’s first music rights body for the global independent record sector). AIRCO member Clive Hardwick has been selected to represent South African on the board as one of 5 ‘Rest of The World’ members. The new board is split equally across Merlin’s three operational territories, with five each from North America, Europe and “rest of the world”, to ensure the company fully represents the varied geographical needs of the sector.

This nomination is a major coup for AIRCO and ensures AIRCO’s activities are informed by, and accessible to, the highest levels of the global Independent record industry.

One of Merlin’s ambitions is to seek to level the playing fields in new media licensing by making blanket (and other collection type) deals with the same power as the major labels enjoy, backed by the collective might of the Merlin membership.

Skills Development

During the course of the year the Skills Development sub-committee has conducted a number of meetings and engaged with members to try and identify the needs of members as far as skills development is concerned. A broad concept document has been outlined identifying key objectives in an effort to design and implement a short and long term skills development plan:

Short Term –
•To assess the needs of members (specifically) relating to business and managerial skills.
•To secure funding for activities to address these skills.
•To plan and implement the series of workshop addressing these needs.

Long Term –
•To assess accredited training opportunities and determine AIRCO’s approach.
•To strengthen the workshops series.
•To establish a budget which works in line the MAPP Seta objectives.

Legal and Finance

AIRCO has secured first round funding to the tune of R1 million from the DAC. Second round funding will be sought from government in November 2007 following the AGM.
The financial statements for the first full year of operation are attached. These have been scrutinised and accepted by the executive and our auditors as being a true reflection of the organisations finances.
Conclusion