Contracts, Patronage and Mediation

The Articulation of Global and Local in the South African Recording Industry

Tuulikki Pietilä

• Publisher: Palgrave Macmillan
• Year: 2015
• ISBN:
  9781137562326
• Topic: Social Sciences
• Subtopic: Media Studies
• Index: Social Sciences

This book studies the long-term developments in the South African recording industry and adds to the existing literature an understanding of the prevalence of informal negotiations over rights, rewards and power in the recording industry. It argues that patronage features often infiltrate the contractual relationships in the industry.

1

The South African Recording Industry

This chapter focuses on the major historical developments in the South African recording industry. This is a very eventful and vibrant history with an early presence and intertwinement of international and local labels and hefty competition between the local operators in particular. In addition to the international and local labels, the chapter discusses the historically varying role and value of international and domestic music in the market and the industry participants’ discussions concerning the issue.

Regardless of the historically long presence of the multinational companies in the South African market, many people see them as colonialist exploiters whose interest has been, and remains, profiting from the local market by saturating it with their international product. According to the counterclaims, international labels and licenses have helped to sustain local music production. The balance between international and local music shifted in the 2000s, as the post-apartheid era came to witness a rise in the production and registered consumption of local music. This also involved a significant increase in the number of independent record labels. Concurrently, also the multinational companies have become more interested in signing some local acts. This chapter will investigate the developments in music sales through the existing statistics, which, even while not conveying the full picture of the market, do give a sense of the overall trends. The chapter also discusses the main recording industry associations and some of the topical issues under debate, and ends with a discussion of the major companies’ recently increased interest in the African markets.

Historical developments: concentration and consolidation

The beginnings of the recording industry in South Africa lie in the distribution of the music of British and American labels in the market. By the turn of the twentieth century, the (UK-based) Gramophone Company’s records were distributed by its own branch in Cape Town (Stapleton and May 1987, p. 263). Other foreign companies had local agents distributing their product in South Africa. The early local operators were the Mackay Brothers, acting as agents of HMV (a label of the Gramophone Company), and Herman Polliack, acting as the agent of the Columbia Graphophone Company.¹ In addition the beginnings of what was to become a major local company in the South African music industry, Gallo Records, were in the distribution of foreign records; a small shop, opened by Eric Gallo in Johannesburg in 1926, was called the Brunswick Gramophone House, named after the company (American) Brunswick Records, whose releases it sold (Allen 2007, p. 267; Andersson 1981, p. 38).

The first recordings of local music were made by foreign companies using mobile recording units. Zonophone (a label of the Gramophone Company) made its first recordings in South Africa as early as 1912 (Stapleton and May 1987, p. 259). By the end of the 1920s, these recordings included mine workers’ choirs, Swazi and Zulu choirs, church choirs, Xhosa and Sesotho music, Dixieland, waltzes, Sousa bands and Afrikaans piano and vocal music (Coplan 1979, p. 143; Stapleton and May 1987, pp. 259, 263). HMV and Brunswick Records made local recordings as well (Stapleton and May 1987, p. 264). Some companies took South African artists to London to record, and the records were then shipped back to South Africa for sale. Among these companies were Gallo, which formed a subsidiary called the Singer Gramophone Company (Allingham 1999, p. 639).

In 1932 Gallo opened the first recording studio in South Africa (this was apparently the first studio in the whole of sub-Saharan Africa). Records made in the Johannesburg studio were sent to Britain for pressing until the end of the 1930s, when an entrepreneur called Llewelynn Hughes opened a studio and two record presses in Johannesburg, later to be sold to the local company Trutone Industries. Trutone started recording artists as well, and it became a vibrant competitor to Gallo’s Singer label until Gallo incorporated Trutone as its subsidiary in the early 1960s (Allingham 1992; cited in Meintjes 2003, p. 276).²

In 1946 Gallo (Proprietary) Limited became a public company. In the early 1950s Gallo started pressing long-playing vinyl discs in its own plant (Meintjes 2003, p. 277). In addition, it opened recording studios in Bulawayo and Nairobi and financed ethnomusicologist Hugh Tracey to make field recordings in the South African countryside and the neighbouring countries: the Rhodesias, Mozambique, Angola and Uganda (ibid.). Consequently, by the mid-1960s, Gallo was the leading music enterprise in Johannesburg.

Gallo’s triumphant history continued with the acquiring of its major competitors. Teal Records was initially established in 1956 for distributing the American RCA-Victor records and later also A&M Records. Eventually Teal moved into producing local music as well, becoming a prominent player in the market in the 1950s and 1960s.³ In 1976 Teal was merged with Gallo. Later an entity entitled Teal-Trutone was formed as a joint venture by Gallo and Polygram (Allingham, interview by the author 2013). Most of the other important local companies that emerged were gradually incorporated into Gallo. These included, for instance, Troubadour Records, Record Industries, Meteor, RPM Record Company and USA.⁴ RPM Record Company had opened its own studios in the 1970s, and was a very prominent actor in the market. The studios of Gallo, EMI (Electric and Musical Industries) and RPM put out most of the local product in the 1970s and 1980s and were in competition with each other (Meintjes 2003, p. 78). Gallo acquired RPM studios in the 1980s (and renamed them Downtown Studios in 1991) and incorporated RPM Records into the Gallo Group.⁵

In the mid-1980s Gallo incorporated yet another central producer of local music, Gramophone Record Company Ltd (GRC). GRC was originally founded in 1939 by Arnold Golembo as a family-owned retail business that later moved into production, becoming one of the most important production houses of local music and an important distributor of international music (through the franchise of the American CBS Records).⁶ In the 1940s, when GRC was moving into music production, Eric Gallo provided some financial assistance in return for which GRC recorded most of its product at the Gallo studios (Allingham 1992; cited in Meintjes 2003, p. 277). From 1967 onwards, GRC was owned 50/50 by Gallo and Columbia-CBS (Allen 2007, p. 267), until it became part of Gallo in the mid-1980s.⁷

Of the multinational record companies, EMI was the most enduring competitor for Gallo. EMI itself was formed in the United Kingdom in 1931 when the Gramophone Company and Columbia Graphophone Company merged. Mackay Brothers and Herman Polliack continued as EMI’s South African agents until the late 1930s, when the Mackay Brothers closed and Herman Polliack took over the EMI licensees in South Africa.⁸ EMI South Africa was formed in 1951 and it was initially owned 50/50 by the parent company in the UK and the local company Polliacks. Until that time the parent company had occasionally sent a field unit to make recordings in South Africa, but, in 1951 EMI opened its own studio. Eventually Polliacks closed, after which 50% of EMI South Africa was acquired by a local wholesale company called Bothners. In the 1970s this share was acquired by a South African film and record company, called Brigadiers, owned by Albie Venter, whence the company became EMI Brigadiers.⁹ According to Allingham (interview by the author in 2013), only in the late 1980s did EMI South Africa become wholly owned by the parent company in the United Kingdom.

What made EMI an especially important player in the local market was the acquiring of the Clive Calder Productions (CCP) at the end of the 1970s. CCP specialized in producing local black music, even though they had important foreign licenses as well. CCP was founded in the early 1970s and its name derives from its founder Clive Calder.¹⁰ Even after becoming part of EMI, CCP functioned relatively independently and was very successful.

The EMI studio was opened in 1951; in the 1980s it was named the Powerhouse Studios until it eventually closed in 1993. EMI also founded its own pressing plant and a distribution network with a warehouse in a Johannesburg suburb called Steeledale. However, in 1979 a fire destroyed the master tapes stored there.¹¹ In the 1990s EMI owned a third of the CD plant called Compact Disc Technologies (CDT) but later had its own CD and cassette plant until it was sold in 2001.

CDT was formed in the 1990s as a joint venture by Gallo, Tusk and EMI, but eventually became owned by Gallo alone as the other parties withdrew from the enterprise (EMI establishing its own plant in the mid-1990s). In 2001 the CD production side of EMI’s plant was merged with CDT, and the cassette production side of both the EMI plant and CDT were acquired by a company called the Replication Technology Group (RTG).¹² In the mid-2000s there was also another CD plant, owned by Bertelsmann Music Group (BMG) and called Sonopress. Thus, for a time, EMI had a presence at several points of the music value chain, from production to distribution. BMG also had a manufacturing plant and distribution system but no studio. Gallo was, however, the most entrenched across the whole music chain and remained so for a longer time than any other company.¹³

As described above, over the decades Gallo managed to incorporate many of its competitors. In addition to their catalogues, the local companies were attractive for Gallo to acquire because of their foreign product licenses. Many local labels found licensing foreign labels safer than investing in local music production and were therefore competing with each other over the license deals with overseas labels (Andersson 1981, pp. 49, 66). An important reason for Gallo’s strength in the industry was indeed its control of a considerable portion of the international recordings sold in South Africa (Allen 2007, p. 267). Indirectly, the apartheid policy and the anti-apartheid movement that it induced further aided Gallo in amassing foreign label licensing deals. Increasing political pressure meant that the multinational companies started to scale-down their presence in South Africa, either by closing their branches and forming subsidiary companies instead, or by arranging licensing deals for their product. Gallo appeared a respectable local partner for the international companies in that situation.¹⁴ The above-mentioned shared ownership of GRC – between Gallo and Columbia-CBS (that later became Sony) – was one example of such a partnership. Another was the sharing of ownership of the Teal-Trutone record company by PolyGram and Gallo.

According to the long-time Archive Manager at Gallo, Rob Allingham¹⁵ (cited in Allen 2007, p. 268), in the early 1990s, Gallo had ‘probably the most extensive collection of international licenses of any country anywhere in the world’. These included PolyGram, Columbia-CBS, MCA, Virgin, A&M, Island and Motown. The only major licenses that Gallo did not control were EMI, RCA and Warner Elektra Atlantic (WEA). Gallo was adversely affected, however, when upon the dismantlement of the apartheid system, foreign labels started to re-enter the country. BMG opened its office in South Africa in 1993. Sony opened its office in 1995. Sony had acquired Columbia Records Group and therefore claimed the distribution rights for its Columbia and Epic labels.¹⁶ In 1995 PolyGram withdrew its license deal and struck a five-year deal with Gallo, whence Teal-Trutone changed its name to PolyGram South Africa, with Gallo owning one-third of the new company.¹⁷ When the parent company, PolyGram, was acquired and eventually merged with MCA/Universal Music Group, PolyGram South Africa became PolyGram Universal (and eventually Universal Music South Africa), and the catalogue of PolyGram South Africa was split between Universal and Gallo (Allingham, interview by the author 2013).

As a result of these developments, in the mid-1990s, for the first time in its history, Gallo did not have any major international licenses (Allen 2007, p. 272). However, this situation changed again in 1997 when Gallo bought yet another local music giant, Tusk Music, and with that obtained the rights to distribute the WMI (Warner Music International) catalogue. Tusk Music Company was initially formed when WEA (later Warners) left the country (because of apartheid) and sold the company to its local employees in 1986. Tusk continued distributing WEA records in South Africa, as well as releasing local music. In 1997 Tusk’s management sold the company to the Gallo Record Company, whence the Warners distribution rights also shifted to Gallo.¹⁸

Meanwhile, for some decades Gallo Music itself had been part of a larger, if changing, corporate structure. From 1980 (when Eric Gallo sold his shareholding) until 1996, Gallo was owned by the mining and financing conglomerate Anglo-American. After the first democratic elections in 1994, Anglo-American bundled together its non-core assets to create Johnnic (Johnnic Holdings Limited), a company owned by black capital (Allen 2007, p. 272; Allingham, interview by the author 2013). In 2005 Johncom (Johnnic Communications) was unbundled from Johnnic, the latter concentrating on the hotel and gaming sectors, the former on media and entertainment (the part to which Gallo continued to belong). In 2007 the name of Johncom was changed into Avusa Limited. Several of the ventures that were part of Gallo were at that point made either a separate Avusa company or sold. Thus, the cassette manufacturing plant and the Downtown studios were sold.¹⁹ The CD plant, CDT, and the warehousing and distribution system Entertainment Logistics Services (ELS) were separated from Gallo and became Avusa companies.²⁰

Just before the name change to Avusa, Johncom had entered a joint venture with WMI, forming Warner Music Gallo Africa (WMGA). WMI had a controlling stake in WMGA. The new entity was the licensee for WMI’s roster of international acts in sub-Saharan Africa and it held the worldwide digital rights to Gallo’s domestic repertoire (Brandle 2006, p. 15). The deal enabled the digitalization of some of the Gallo Record Company’s music archive.

In 2012 ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures, Tables, and Maps
• Acknowledgements
• Introduction
• 1 The South African Recording Industry
• 2 Recent Industry Developments
• 3 A Segmented Music Market and Attempts to Capture It
• 4 The Wholesaling and Retailing of Music
• 5 Negotiating Value in the Music Chain
• 6 Organizing Relationships in the Recording Industry: Contracts and Patronage
• 7 Continuities in Patronage Arrangements
• Conclusion
• Appendix A: Tables
• Appendix B: Interviewed People
• Notes
• Bibliography
• Index