Do Kenyan Record Labels Have An Optimal Business Model?

In the entertainment ecosystem, we have many players: the artists, producers, radio stations, tv stations, websites and so on. An odd thing I have noticed about all this is that the radio stations, tv stations and websites all mint money like crazy! Radio companies like KISS 100, TV Stations like K24, and websites like YouTube are all companies with millions of dollars in annual returns. The same cannot be said of our record companies.

This is not to say that our local producers are poor. They are making a comfortable living. A while back, Clemo was reported to be building a house in the leafy suburbs of Kahawa Sukari. Musyoka was also reported to be trading in a Land Rover. So this is not about how they can make money at all, they are doing that. This is about whether our producers are making as much money as they can!

So what are record labels currently doing? They are charging artists per song. For example if you want to record a song with Calif Records, you have to pay Clemo 20,000 for him to start recording. This sounds to me like a sub-optimal model. The artists when they are starting out are really strapped for cash. They’re not the ones producers need to be asking for cash. I think we should follow the Nigerian model, where the record label invests in talent from the start, producing a talented artist’s songs for free, and then getting a cut of proceedings thereafter. This seems to be a more scalable model, if you see how Nigerians are blowing up right now. What do you think?