Opinion: ‘Devil Must Bow Records’ & other jokers in Nigerian music

by ‘Demilade Olaosun

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For Artistes that egoistically set up their own record labels because they were too proud to operate within a structure or they felt they were short-changed in their previous deals, you must count the cost before you set out to own a label.

“Devil Must Bow Records”, “All I Do is Blow Entertainment”, “Oga on Top Records Inc”!!!  The Nigerian entertainment industry is growing.  Money is being made every day.  Of course, the vultures are circling, practitioners are increasing and it has now become an all-comers affair.  Mushroom record labels spring up every day claiming to have the magic wand that will transform a talentless noise-maker into a Justin Bieber.  These briefcase practitioners secure a few millions of Nigerian naira and dive head-first into the industry with next to no idea of the workings of same.  Without doubt, the victims of the shenanigans of these people are the artistes that are easily swayed by the second-hand cars, refurbished “blings” and promise of lush cribs.  In the greed and incredible failure to diligently review the foundation of their relationship with these labels, these artistes sign away their destinies and most often abandon any shred of hope in becoming successful performing artistes.

I have structured this article to serve as advice to folks really desirous of setting up indie record labels and sound a note of warning to artistes that intend to join the industry.  There are certain things that are paramount before considering the set up of a record label.  I will pose a lot of questions and leave you to determine your readiness:

  1. Business knowledge of the industry:  This is perhaps the most important of all things to note.  Africa’s richest businessman, Alhaji Aliko Dangote once stated in an interview that one of his successes in life is based on refusing the temptation to foray into business terrains that he has no idea of.  The entertainment industry has its own idiosyncrasies.  It plays by a different set of rules and its practitioners play the games in line with these rules.  The inter-relationship between the production, promotion and distribution sectors of the industry require patient, in-depth study and integration before practice can be considered.  Before you start that label, do you even know what managing a record label is about?  Do you have any idea about packaging music and its performer in an appealing manner?  Have you secured the commitment of certain industry practitioners that are necessary for the running of the business?  If you don’t intend to directly supervise the business, have you secured the service of a competent manager knowledgeable in the music business?

For Artistes that egoistically set up their own record labels because they were too proud to operate within a structure or they felt they were short-changed in their previous deals, you must count the cost before you set out to own a label.  Do you have the time to manage a business and focus on your career?  Do you think you are able to work without supervision?  Are you sure you are able to efficiently structure your business in a way as not to pass the entire venture off as a vanity project?  Don’t make the mistake of starting what you cannot sustain.  In Nigeria, getting a business manager for your project is as hard as finding a needle in the haystack.  If you have not carried out a detailed feasibility study and pragmatic business plan, do not start up a silly and childish record label because you felt slighted by another label.  There is nothing wrong with being an imprint of a bigger label while seeming to run your own show but ensure that you have proper agreements detailing ambits of collaboration.  Be absolutely convinced of your capacity.

  1. Mindset:  Very many people set up record labels solely to be in the public view, attend parties, wine, dine, have access to easy women and generally live the ‘life’.  The business of entertainment is a million light poles apart from the showmanship aspect of the industry.  If all you desire is the ‘show’ part, it is best you don’t get into the business and have innocent people commit their destinies into your hands whereas you don’t even have a roadmap of where your own life is headed.
  2. Legal entity:  Have you set up the right business entity to carry out the business of a record label?  You need to operate your business through an entity that is recognized by the law otherwise, you will set yourself up as an unserious element.  Most people register business names and they assume they are home and dry.  The most advisable entity for profit-oriented business purposes (other than partnerships as lawyers and accountants), is the limited liability company.  According to section 38 of the Companies and Allied Matters Act (CAMA) Cap C20. LFN 2004, the LLC has the powers of a natural person of full capacity.  The company can hold property by itself, sue and be sued and have perpetual succession.  The attendant effect of this is also that the Company can by itself execute contracts without making use of the name of any of its promoters or directors.  It has a life of its own.  The only things business name registration offers you are the reservation of the name for your use and the opportunity to open bank accounts in the name.

I smirk when I see record deals between artistes and unregistered businesses or mere business names without the names of the owners.  Those documents have no effect at law as there are no proper parties represented in its making.  The company stands better chance of access to funding through structured investments by corporate investors as opposed to entities not recognized by law.   Equipments required for the business can be bought in the name of the company and liability for debts arising will only be borne by the company.  Personal funds of the owners will not be employed to settle the Company’s obligations.  It is deemed at law to have a different personality from its owners.  As an artiste, it is important that you demand to know the legal status of any entity parading itself as a record label to take charge of your life for very many years to come.

In the course of practice, I have experienced situations where some guys saved up some dollars or pounds sterling abroad, set up a company in those jurisdictions and come back to Nigeria to sign artistes claiming to be ‘yankee-based record label”.  Section 54 of CAMA stipulates that every foreign company intending to do business in Nigeria shall not do so until it shall have taken steps to obtain incorporation as a separate entity in Nigeria.  Don’t let the dollars sway you into getting into a contract that you cannot enforce.  Be very wise.

In relation to setting up the businesses, where you intend to partner with other people to set up the record label, ensure that you have a proper partnership or joint venture agreement in place to regulate your internal dealings.  These agreements will stipulate rights, duties, obligations and profit-sharing formula.  You don’t want a situation where you sign artistes and internal wrangling with partners make it impossible to do business.

  1. Distribution:  This is at the heart of profitability in the music business.  Do you have it locked down? Radio, (terrestrial, satellite, internet), print, online, clubs, advertising etc.  What plan do you have on monetizing the influence of your artistes?  Can we see your business plan?  This is why for the life of me, I cannot figure out the sense behind these funny 6 months record deals I see around.  How do you think you can effectively develop an artiste and get him profitable in that time?
  2. Funds:  I don’t think I should even talk about this.  Know this for sure, whatever budget you had outlined, your expenditure will overshoot it!!!

Running any business is always a learning process and mistakes will definitely be made.  However, the mistakes that should be made are ones that could not have been reasonably foreseen.  To all artistes that dream up castles in the air, expecting fictitious record deals to solve all the problems in their lives, be guided!  Let us stop making a mockery of the structure in our industry.

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Demilade Olaosun is a media and entertainment lawyer.  He is a director at Ribbon & Blue Maverick Media Limited, a media and entertainment advisory and transaction support services company operating in Lagos.  He can be reached via email: [email protected]. He tweets via @OlaosunD.

 

Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

Comments (2)

  1. Demilade, nice article. More of this kind of advise is needed for the wise ones who value their careers and want guidance for their talents. In an industry not particularly regulated, unfortunately, set-ups like ‘mo ti di olowo’ labels spring up and die just like they came.

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