The War of the Skiza Tunes

What are Skiza Tunes? These are ring-back tone services that offer a pre-recorded vocal musical tune by artists to the subscribers. This is a tune that the person who calls you get to listen as he awaits you to pick up the call.

This service is offered by the giant telecommunication Safaricom and was initiated in the year 2009. Early this month of May, Safaricom Limited announced the release of 152 million shillings as royalties accumulated for Skiza Tunes. This was the amount that had accumulated since the month of July 2015.

The platform has a total of 5,000 artists that are registered and offers around 11,000 songs that subscribers have to choose from. When Safaricom announced the release of the 152 million shillings, people were left asking, how much does the telecommunication company make from the tunes? How much does the company retain? How much does the company pay out? How much do artists receive as their royalties?

Safaricom charges 75 cents daily for Skiza Tunes or a subscriber can also opt for the option of paying one shilling that is a premium payment per tune per day. According to the agreement, Safaricom retains 85 percent of the revenue collected from the tunes and pay out 15 percent. Let us say one subscribes for the premium service of one shilling per day per tune. For one week, one would have paid seven shillings. Out of this seven shillings, 10 percent goes to KRA’s Excise Duty and 16 percent to Value Added Tax. Thus, 7 cents will go for Excise Duty and 1.12 shillings to Value Added Tax. Safaricom remains with 5.18 shillings. Out of this, Safaricom retains 85 percent meaning that the company will make 4.403 shillings and give out 0.777 shillings or simply 78 cents.

So, if Safaricom gave out 152 million shillings, what was the original amount? Let us do the simple high school math: If 152 million equals to 15 percent, what about 100 percent? Well, that will be 100 divided by 15 and multiply the result by 152 million. This means that Safaricom made 1,013,333,334 rounded off to 1.03 billion shillings.

Now, what happens with the 152 million shillings released? Do the artists get the whole amount? The answer is no. the amount is not paid to artists directly. For instance, out of the 152 million shillings, 141.675 million shillings went to Music Copyright Society of Kenya, Kenya Association of Music Producers as well as to Performers Rights Society of Kenya. The remaining 10.3 million shillings were paid to Premium Rate Service Providers.

Article by Juma Fred