High Court Halts Skiza and Hello Tune Royalty Payments to Kenyan Artistes Amid Revenue-Sharing Dispute

In a significant blow to Kenyan musicians, the High Court has issued an order suspending royalty payments for Skiza and Hello tunes, popular ring-back tone services offered by telecommunications companies like Safaricom, Airtel, and Telkom Kenya. The decision stems from an ongoing legal dispute over how revenues from these services should be distributed to artistes, with musicians demanding direct payments from telecom operators without intermediaries. The court’s ruling halts payments until the case is resolved, leaving thousands of artistes in financial limbo and reigniting debates about the fairness of Kenya’s music royalty system.

Skiza, launched by Safaricom in 2009, is East Africa’s largest digital content platform, generating significant revenue through ring-back tones, where callers hear a song or tune instead of a standard ring. Hello tunes, offered by other providers like Airtel, operate similarly. With over 21,000 artistes registered and an estimated Sh200 million disbursed monthly, Skiza alone is a critical income source for many Kenyan musicians. The platform charges subscribers approximately Sh1.50 per day per tune, with annual gross revenues estimated at Sh7.58 billion. Historically, artistes have received a share of this revenue, which has grown from 7.5% in 2009 to 52% under the 2021 Copyright Amendment Bill, a law designed to ensure fairer compensation. The revenue split also allocates 39.5% to telecom operators and 8.5% to Premium Rate Service Providers (PRSPs), who manage content and metadata. However, the distribution process has long been contentious, with artistes frequently alleging exploitation by intermediaries like PRSPs and Collective Management Organisations (CMOs) such as the Music Copyright Society of Kenya (MCSK), Kenya Association of Music Producers (KAMP), and Performers Rights Society of Kenya (PRISK).

The current court case centers on artistes’ demands to bypass intermediaries and receive payments directly from telecom companies. This push reflects years of frustration over low payouts, with some artistes reporting royalties as meager as Sh20 to Sh86 for their tunes, despite significant subscriber bases. For instance, in 2023, comedian Eddie Butita publicly shared earning just Sh86 for his song Kidesign, while Mulamwah reported Sh31, prompting outrage from artistes like KRG The Don, who accused those managing Skiza funds of “dangerous theft.” The High Court’s decision to halt payments revisits earlier legal battles, notably a 2016 ruling in Malindi that declared Section 30A of the Copyright Act unconstitutional. That section had mandated CMOs to collect royalties, but artistes and PRSPs argued it restricted their ability to negotiate direct payment terms. The 2016 ruling shifted payments back to PRSPs, a move criticized for favoring intermediaries over artistes. The current case appears to echo these concerns, with artistes seeking to eliminate both CMOs and PRSPs from the payment chain.

The suspension of royalty payments is a severe setback for Kenyan musicians, many of whom rely on Skiza and Hello tune earnings to sustain their careers. The 2021 Copyright Amendment Bill had raised hopes by securing artistes a 52% share of net revenue, potentially yielding Sh4.63 billion annually from Skiza alone. However, the court’s ruling puts these funds on hold, exacerbating financial pressures already felt during economic challenges and past disruptions like the COVID-19 pandemic. Artistes like Nonini have previously warned that intermediaries like PRSPs can disadvantage collaborators such as producers and sound engineers, as only the primary artiste benefits unless contracts specify otherwise. Gospel and vernacular music, which dominate Skiza’s top earners, are particularly affected, with some artistes having earned up to Sh24 million in a single payout period in 2016. The halt threatens to disrupt these income streams, potentially forcing musicians to seek alternative revenue sources or pause creative projects.

The Music Copyright Society of Kenya, led by CEO Ezekiel Mutua, has historically supported legislative changes to protect artistes, describing the 2021 Bill as “revolutionary.” However, CMOs have faced criticism for opaque accounting, with a 2016 court order requiring MCSK to provide transparent records of royalties collected from Safaricom. KAMP’s CEO, Mbugua Njoroge, has also emphasized the need for clear distribution channels to prevent revenue losses to telecoms and PRSPs. Safaricom, which retains 39.5% of Skiza revenue, has maintained that it operates transparently, providing logs to PRSPs for artistes to verify downloads. The company has cited high operational costs, including network maintenance, as justification for its share. In 2021, Safaricom increased artistes’ earnings to 40% and supported the removal of excise tax on ringtones, moves hailed as pro-artiste. However, the current legal standoff places telecoms in a challenging position, as they await court guidance on payment structures.

This is not the first time Skiza payments have been halted. In July 2015, a court order paused royalties following a dispute over an agreement between Safaricom and CMOs, which aimed to bypass PRSPs. Artistes, led by MCSK, protested with a march to Safaricom’s Nairobi offices, demanding the release of Sh152 million in owed royalties. The funds were eventually disbursed in 2016 after court approval, but the episode underscored ongoing tensions between artistes, CMOs, PRSPs, and telecoms. The 2017 ruling that reverted payments to PRSPs, following a case by artistes Mercy King’oo and Lydia Nyiva, further complicated the royalty system. Artistes like Eunice Njeri have since criticized PRSP contracts, which often grant providers full rights to songs, limiting artistes’ ability to remix or monetize their work elsewhere.

The High Court’s ruling leaves the future of Skiza and Hello tune royalties uncertain. Until the revenue-sharing case is resolved, artistes face delayed payments, potentially for months. The outcome will likely set a precedent for how digital content royalties are managed in Kenya, with implications for the broader creative industry. Stakeholders, including the Kenya Copyright Board (KECOBO), have been urged to improve transparency, with Safaricom’s Stephen Chege previously noting KECOBO’s lack of a comprehensive copyright owner database as a barrier to efficient payments. For now, artistes are left grappling with the financial fallout, while the industry watches closely for the court’s final decision. As KRG The Don poignantly stated in 2023, “In Kenya, being an artiste has become so hard; you’d rather be a beggar.” The resolution of this case could determine whether Kenyan musicians finally secure the fair compensation they’ve long demanded.