Zahara Music Contract Dispute: How Record Labels Work With Artistes
There have been reports on social media that Zahara, a South African singer who recently passed away, may have been unfairly treated by her initial record label, TS Records. It is said that despite her debut album, Loliwe, making millions of Rands, Zahara received only a small portion of that money. She revealed in an interview that her shows would generate around R100,000, but she would only receive R15,000 after persistently pushing the record label. This upset her fans.
However, according to Davetontv, Zahara may not have been intentionally cheated. It is possible that she signed a contract without fully understanding its implications, which affected her in the long run. Davetontv explains that Zahara’s record label, TS Records, had a licensing deal with Universal Music. This meant that Universal Music had the right to use TS Records’ music for marketing and distribution. In this agreement, Universal Music paid TS Records for the rights to the music, and TS Records retained the copyright ownership.
In such licensing agreements, royalties are typically distributed based on the terms of the contract. Artists like Zahara usually receive a percentage of record sales, around 12%, and a portion of publishing royalties, which can range from 60-85%. These royalties are earned from performance and mechanical rights.
Record companies primarily make money from record sales, not from artist bookings or performances. Artist bookings are usually handled by the artist’s manager, who earns a percentage from the artist’s earnings. The record company profits from album sales and ticket sales from performances. In South Africa, it has become common for record companies to also manage artists, which can create conflicts of interest. However, regardless of the management arrangement, the manager should not take more than 15% of the artist’s income from public performances.
DJ Sbu and TK, co-founders of TS Records, have stated that they do not owe Zahara anything according to the contracts and obligations in the music industry. DJ Sbu revealed that in 1999, he was offered a contract by BULA Music but chose not to sign it. Instead, the contract was given to Lundi Tyamara, who unfortunately died in poverty. DJ Sbu told IOL that record labels invest a significant amount of money in making an artist successful, covering various expenses. Artists are often required to pay back these investments before making any money from album sales. DJ Sbu had to choose between fame and financial stability, and he chose to continue his studies.
Similarly, TS Records invested a lot of money upfront in Zahara’s debut album, taking on the financial risk. It is standard practice for the record label to recoup its investment first before the artist receives any profits. This information is clearly stated in the contracts artists sign. Therefore, DJ Sbu and TK argue that they do not owe Zahara anything because they fulfilled their contractual obligations. DJ Sbu uses the analogy of a contract with a company like PnP – if you sign a contract with them, you cannot complain when they make billions in profit and you only receive what is specified in the contract.
Contractual disagreements have also happened in Zimbabwe which makes education crucial for artists to understand the administrative and legal aspects of the music industry. Artists should have knowledgeable professionals, such as entertainment lawyers, to guide them through contracts and protect their interests.
