I was recently called out in a Twitter thread where someone claimed that out of the Caller Tune charge which is between UGX500 and 700, the artiste only takes UGX35! It was a misinformed submission and it is why we need to take a deeper look into the business aspect of this.
So we buy caller tunes between Ugx 500 to 700 but I am being told our artists (the content creators) are only given Ugx 35. Could this be the reason our music industry is still struggling because our musicians never make anything reasonable out of their music content?— I Am UGAMAN 🇰🇪🇺🇬🇹🇿 (@Ugaman01) April 10, 2019
First things first; what is a Caller Tune? Also called a Caller Ring-back Tone (CRBT), a Caller Tune is the sound a person calling on your phone hears while waiting for you to pick up. Lately, it is possible for you to opt for personalized audio content instead of the default tones. These could be songs, an audio ad, a quote, a voice message… anything audio.
I have come across a couple of artistes and just like in any business setting, some complain that they are cheated by Telcos while there are some making big monies from CRBTs. CRBT business is a whole lot different from concerts, bar gigs or any side hustle you might have as an artiste and this is something many fail to grasp.
A Caller Tune communicates who you (the phone owner) are as a person; it helps you put out a message that you can’t say out loud. So, by the time someone decides to activate a particular song as their Caller Tune, they have looked at a couple of options. Put in mind that everyone, including your grandma, will have to listen to that particular song when they call you.
Let’s start talking figures
For starters, a Caller Tune costs UGX700. The UGX700 is broken down into a couple of expenses which you, as an artiste, need to understand.
“If you get 100,000 streams on Spotify or iTunes, you will get paid $750 (UGX2,850,000) whereas for Caller Tunes, 100,000 downloads will pay you UGX4,398,000…”
First off, you have to go through an Aggregator (the company that supplies content to the Telco) because a Telco, under the current Uganda Communications Commission (UCC) ecosystem, doesn’t directly deal with content creators.
The Aggregator has tax obligations they must meet and these are VAT (18%), Excise Duty (20%) and UCC Levy (2%). Excise Duty is tax levied on luxurious consumer goods, and music definitely falls into that category.
So, out of the UGX700 charged by a Telco, the deductions are UGX126 (VAT), UGX114.8 (Excise Duty) and UGX1.98 (UCC Levy) which leaves us with UGX457.2. At the Telco level, 20% (UGX91.44) are operation costs and 10% (UGX36.58) is paid as a platform fee (look at it as rent). Looking back on the UGX700, we now have a balance of UGX329.2!
According to a Contract Form of a big Telco in Uganda (name withheld), 70% is taken off as revenue for the Telco. 70% of UGX329.2 is UGX230.44 and that now leaves us with UGX98.76.
For most Content Providers, their contract with an Aggregator stipulates a 50/50 revenue share. In this case, a Content Provider like SMSONE, DMark, Blue Cube, CCA or Spice Africa will take UGX49.38 and the artiste UGX49.38. That is cartoon money, right? Let’s take a game-of-numbers angle look.
From experience and research, emotional and love music sells heavily when it comes to Caller Tunes. So, for each download (subscription), you make UGX49.38. For you to make UGX 3m from your Aggregator, you must get 60,753 downloads! According to UCC, there are at least 24Million mobile phones in Uganda. It’s really not easy getting 60,000 downloads to make UGX 3m from Caller Tunes, but there are artistes making that kind of money.
If you’re an artiste and you cannot get 60,000 downloads out of 24m mobile phone owners, you really need to rethink your strategies instead of whining. I know it is not fair but hey, it is what it is until change comes; you need to work with what is available.
Streaming apps like Spotify and iTunes pay an approximate of $0.0075 (UGX28.5) per stream. If you get 100,000 streams on Spotify or iTunes, you will get paid $750 (UGX2,850,000) whereas for Caller Tunes, 100,000 downloads will pay you UGX4,398,000!
In essence, Caller Tunes pay more but this is not a justification for you to pull down your music from the digital streaming platforms; it’s actually Branding which I talked about in one of my previous articles.
I know this is already making you sleepy and confused. As an artiste, it’s your business to know this kind of stuff because no one will do it for you. You must understand your business!
Till next Friday, stay safe. Together, we shall build this Industry brick by brick.