MTN Faces Another Nigerian Fine: $56M For Ring-Back Tone Copyright Infringement

MTN Faces Another Nigerian Fine: $56M For Ring-Back Tone Copyright Infringement

Dial a random phone number in Nigeria and you’re more likely to hear music than a standard repetitive ring.

That’s because ring-back tones are the hottest consumer trend in Nigeria, where they sell for $0.25 per month, CNN reported.

A ring-back tone is a musical selection, picked by the owner of a mobile phone, that plays when their number is dialed. When the call is answered, the music stops and the talking starts.

The tones were popular in the U.S. years ago, and they have since caught on in markets around the world including China.

Ring-back tones are more than a trend, said Audu Maikori, founder of music production house Chocolate City. They providing a vital new funding source to an industry devastated by digital piracy. Sales are growing fast, and the tones now make up roughly 10 percent of his company’s revenue.

Telecoms are also benefiting. MTN, the largest telecom in Africa, now sells up to $80 million a year in ring-back tones, CNN reported.

“Everybody wants to be cool, and music is cool … it’s an aspirational thing,” said Herman Singh, executive for digital at MTN, in a CNN interview. “What we’ve found as music comes out that’s cool and vibey, people just attach that to their own personal brand.”

But MTN could be fined 16 billion naira ($56.6 million US) for failing to pay royalties on ring-back tones in a music copyright infringement lawsuit filed by the Copyright Society of Nigeria, ITPulse reported.

The copyright society claims that for every caller ring-back tune sold by MTN, MTN retained 60-to-70 percent of the income, leaving 30-to-40 percent of the revenue to be fought over by the value-added service provider, the record label, the performer, and anyone else with royalty claims, according to a report in Music In Africa.

The Copyright Society is Nigeria’s only government-approved collective management organization for musical works and sound recordings, and it fights for the rights of people working in the Nigerian entertainment industry, Music In Africa reported.

If it prevails in court, this will be the biggest copyright lawsuit ever in Africa. The Copyright Society of Nigeria says it filed the lawsuit as a last resort, ITPulse reported.

The copyright society says it engaged in media advertising and devoted time and resources appealing to MTN to obtain the appropriate licences and pay royalties for the musical works and sound recordings deployed by the company, “but MTN has behaved as if it is above the law and no attempt made by Copyright Society of Nigeria has got MTN to meet its lawful obligations,” it said in a statement.

MTN “touts itself as the biggest distributor of music in Nigeria and falsely holds itself out as a good friend of the Nigerian music industry,” the statement continued, according to Music In Africa.

“We will not buckle under pressure from anyone, no matter how highly placed,” said Tony Okoroji, chairman of the Copyright Society of Nigeria. “We have sued a corporation owned by the Federal Government of Nigeria. We have gone to court against a state government. We have had to sue Nigeria’s biggest bank, wrestle in court with Nigeria’s biggest hotel and broadcast networks … No one is above the law.

“We are determined, committed and resolved to stamping out the era of ‘monkey dey work, baboon dey chop’ from the Nigerian music industry and establishing a transparent and accountable industry in which everyone who invests his or her talent or resources can rest assured that his or her investment will be fully protected,” Okoroji said.

Music superstar D’Banj called for musical rights protection when he addressed the recent Nigerian Entertainment Conference in Lagos.

MTN this month agreed to pay the Nigerian government $1.7 billion in an out-of-court settlement over failure to meet a deadline deactivating unregistered subscribers from the network. The company also owes taxes in Cameroon.

In South Africa, MTN’s headquarters, the Composers, Authors and Publishers Association says MTN hasn’t paid royalties since 2013. MTN denied the charge, saying “MTN has never disputed any royalty rates with CAPASSO or any other collecting society.” Then MTN quickly settled its outstanding debts, according to MusicInAfrica.