Recently, the Standard Newspaper in an article titled: “Banking on airwaves” reported that MCSK had entered into a commercial partnership with several well-established entertainment companies aimed at boosting the society’s revenues in license collection.
This so-called “alternative licensing regime” will see the provision of ready-packaged, advert-laden music content to particular establishments and other public places. The revenues generated from the ads in the audio/audio-visual content will then shared between MCSK, the radio and television frequency holder, the content/music provision management and the establishment and/or public service vehicle (through its umbrella body eg. Sacco, Union). The musical content to be used will vary from different music genre mixes, comedy, news highlights, short form documentaries, short films, entertainment news and sports highlights. MCSK notes that Kenyans spend up to 3 hours per day in transit therefore ‘transit advertising’ offers unique opportunities to brands as the audience’s attention is focused on the content in the vehicle, there is over 60% retention and limited distraction unlike in a home/office environment.
According to MCSK, each public service vehicle (PSV) ferries a conservative number of 100 people per day multiplied by the over 70,000 PSVs, MCSK claims it will have an advertising reach of over 7 Million people daily, not including fixed venues (restaurants, pubs, banks, supermarkets etc.)
MCSK contends that its research indicates that point of sale communication contributes to 37% of new purchases. Therefore, MCSK argues that this regime will be able to offer unprecedented exposure and out of home reach for brands. The product will be designed to ensure it’s entertaining, highly engaging and a natural fit to Kenyan lifestyles.
With the advent of this new licensing regime MCSK aims to reduce the operational and logistics costs of collecting these revenues, generate alternate revenue and if optimal capacity from advertiser revenues, then it may not even require to charge the standing fees from partner stakeholders.
This licensing regime will apply to places that rely on broadcast music. (Radio and television stations License is for broadcast into a domestic environment only and not public places and or public environment).
MCSK contends that this new licensing regime will reduce the operational costs with regard to Performance in Public Places (PPP) that usually eats upto 50% of the revenue total revenue collected per annum. Beside sthis, due to the sheer size of the operation and amount of resources required, MCSK claims that the current model of public performance fees collection comes with several inefficiencies like loss of revenue from evasion, corruption and operational gaps.
IPKenya’s comments will be reserved until MCSK officially launches this concept. However at this early stage, it is encouraging to see collecting societies in Kenya being innovative and business-minded in ensuring that the rights holders see greater benefits for their creative work.