South African performance rights organisation (PRO) Samro has pulled out of a multimillion-dollar investment partnership with a mooted counterpart in the UAE, the Arab Emirates Music Rights Organisation (AEMRO), opting to “cut its losses” after its board ruled the deal was unprofitable.

AEMRO was established in 2015, with Samro (Southern African Music Rights Organisation) holding an 80% share in the new organisation. Samro at the time said the establishment of a new PRO in the Emirati market was “in line with [its] strategic growth priorities”, identifying a potential return on investment of more than R1bn ($71m).

However, in an extraordinary general meeting in Johannesburg on 27 October, Samro members were told the deal was being axed, with the organisation blaming difficult economic conditions and a lack of official recognition of AEMRO in the UAE: AEMRO applied to become a member of the International Confederation of Societies of Authors and Composers (Cisac) in 2016, but was reportedly rebuffed as it was not licensed to operate in the UAE.

“Although at another period in time this type of investment could have yielded great financial rewards, the board has decided to cut its losses”

“Samro has decided to terminate its investment in the UAE,” reads a statement from the PRO. “Although at another period in time this type of investment could have yielded great financial rewards, the board has decided to cut its losses in the interest of Samro members and focus on strengthening its southern African and African operations for now.

“This investment was made after due consideration at the time, but developments in the UAE with our global partner collective management organisations, coupled with an adverse economic environment in South Africa, has heightened the risks. Hence, in the interest of Samro members, Samro has decided to terminate this venture.”

According to City Press, Samro lost nearly R40m (US$2.9m) on the AEMRO venture.

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PwC expects the South African live music industry to grow at 7.9% over the next five years, but the figure could be far higher with more support from government and big business, a new study has concluded.

It Starts with a Heartbeat, commissioned by South African/Norwegian music development body Concerts SA and backed by collection society SAMRO, says “enhanced investment” in live music in the next five to ten years “could have a particularly strong impact in South Africa”, noting that “live music has returned to the top of the value chain, in terms of both revenue and cultural value” following the decline of physical media (a trend it shares with more developed countries, “though with various time-lags”).

Despite live’s natural ascendancy, there are significant problems preventing further growth: among them, says Concerts SA, “erratic programming, poor information, unfriendly spaces, access factors such as transport and affordability” and a “complex, sometimes burdensome” regulatory environment as a legacy of South Africa’s “long, disgraceful history of policing or banning black sociality”.

The solution, says the Johannesburg-based group, is backing from corporations and the local government to transform a sector still largely dominated by small, medium- and micro-sized enterprises (SMMEs) into a modern, professional concert industry.

“A live music circuit throughout the region could create ongoing employment … but this requires buy-in and sustained support”

“Government – especially local government – and big business can offer crucial help,” reads the report. “Government plays a key role in live music through regulation and facilitation. Big business has resources and – just as important[ly] – skills that can energise a largely SMME sector and redress the damage done to live music by apartheid.”

One such big business – the biggest: Live Nation – entered the South African market in February with the acquisition of the country’s leading tour promoter, Big Concerts.

Andre le Roux, MD of the SAMRO Foundation, says: “With enough time, a live music circuit throughout the region could create ongoing employment and heightened cultural awareness around the country. But this requires buy-in and sustained support.

“Our call to the policymakers, politicians, decision-makers, researchers, artists, venue owners, audiences and all who have a vested interest in growing the music industry is to take some time to read this research, to ponder over our suggestions and findings [and] use it as a toolkit or a menu and choose which options you can use to build the consumption of music for the wellbeing of our society, economically, socially and culturally.”

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