The Kenyan music, comedy, podcast, film, and animation creative industry are losing Sh38.3 million daily to piracy.
Backed majorly by findings of audit firm Pricewaterhouse Coopers (PWC)’s Entertainment and Media Outlook 2019-2023 Report, Partners Against Piracy (PAP) estimated the annual loss to piracy of revenue to Kenyan creatives at Sh14.3 billion as of December 28, 2021.
Of the sum, Sh8.2 billion is lost in pirated contents of Kenyan film, comedy, music, podcast and animation.
In total, PAP estimated loss of revenue to piracy in Kenya across all creative platforms to be Sh92 billion annually.
PAP was founded in March 2020 by the Kenya Copyright Board (Kecobo) as a collaboration body of like-minded multi-sectoral coalition of local and international associations, societies and individual right holders to help fight piracy.
According to the PAP report seen by Daily Nation, majority of the revenue comes from streaming platforms whose value stands at well over Sh30 billion a year.
Advert-supported audio streams and downloads such as Mdundo and subscription audio streams & downloads such as Apple, Audiomack, Boomplay and Spotify streaming platforms value collectively is estimated at Sh15.6 billion annually.
However, illegal businesses (piracy) in the country takes about 98 percent of the revenue generated yearly from these platforms.
In this regard, non-registered ad/subscription streaming platforms make Sh15.1 billion, leaving legal businesses with about Sh468 million yearly.
This results in a total loss of Sh7.7 billion to all creatives all over the world whose content is streamed in the country, with Kenyan creatives alone losing Sh4.3 billion in revenue.
“Pirates do not register their businesses and do not pay tax. They also do not create employment. Reducing piracy in Kenya can create at least 50,000 jobs” PAP interim convener Mike Strano noted.
Another streaming mode that generates staggering amounts of revenues but has become uncontrollable due to this menace is the Subscription Video On Demand (SVOD) platforms such as Showmax, Amazon, Netflix, Safaricom’s Baze, and Viusasa, among others.
According to PAP’s report, SVOD value stands at around Sh14.3 every year. Of the billions generated every year, loss to all creatives is estimated to be in the region of Sh5 billion, with Kenyans alone losing Sh3.8 billion.
Video rentals and purchases such as My Movies Africa and Vumi Central are other streaming platforms dented with piracy. The value of such platforms in the country is around Sh63.6 million annually. From these platforms, Kenyan acts lose about Sh21.7 million every year.
But if for a moment you thought screening of films in Kenyan cinemas was probably the safest mode to avoiding piracy, then you are mistaken.
Ticket price value every year for films screened in Kenyan cinemas is estimated to be in the region of Sh5.07 billion.
Even then, not much is gained due to pirating of content, robbing cinemas of the exclusivity of airing them.
This results in a loss of Sh2.06 billion to all creatives around the world, with Kenyans losing Sh20.5 million because a majority of films screened are not local.
Of all forms of piracy in the country, broadcast and cyber-piracy are the most rampant, the report says.
“Online/cyber piracy is a cybercrime perpetrated by terrorists and global syndicates and must be dealt with through stakeholder participation, especially internet service providers,” Mr Strano observed.
Broadcast piracy involves the use of video and audio content without the consent of rights holders, while cyber/online piracy involves software, music, literature and video as pirated content.
The report estimates that, annually, piracy costs the Kenyan government more than Sh12.69 billion in value-added tax, Sh2.49 billion in corporation tax, Sh1.07 billion in income tax for residents and Sh1.13 billion in income tax for non-residents.
To curb this menace and save the creative industry, PAP has called for the implementation of sections 35B, C and D of the Copyright Act 2021 in cooperation with internet service providers to help mitigate the losses.
Section 35 offers provisions for offences and penalties of intellectual property (IP). IP refers to creations of the mind such as inventions, literary and artistic works such as designs and symbols, names and images used in commerce.
In 2021, PAP together with other copyright stakeholders, fought the proposed repeal of the sections 35B, C and D of the Copyright Amendment Bill 2019, which would have removed the responsibilities of internet service providers on safeguarding intellectual property from the Copyright Act.
The push succeeded, with the sponsor of the Bill, Homa Bay County Woman Representative Gladys Wanga, withdrawing the contentious amendments in February 2022.
The Bill was passed by Parliament and signed into law by President Uhuru Kenyatta in April.
Should the implementation of this sets of laws commence with immediate effect, then the journey to fighting piracy and saving the creative industry billions of shillings would have started.
But even then, pay TV Multichoice Kenya Managing Director Nancy Matimu believes there is need for public sensitisation and awareness to curb the vice, as a majority of decision-makers and the public lack proper knowledge of piracy, making the fight against it difficult.
“As broadcasters, we are losing lots of revenue. I get to interact with many business leaders, lawmakers and consumers alike, who always touch on our price point, but they do not seem to understand that piracy takes away from the revenue streams of creatives. There are small businesses distributing content on various platforms, but they do not know that they are actually participating in a crime. Piracy sensitisation is the only way we will safeguard the futures of our youth,” said Ms Matimu.
To have the laws implemented, Kecobo Executive Director Edward Sigei is of the view that Kenyan creatives are the ones who should be at the forefront in championing the enforcement.
“Creatives, as the owners of copyright and related rights, are a critical tool in the fight against piracy. They have influence and reach to advocate policies that directly affect their revenue streams,” he says.
Rapper King Kaka, however, feels even though the buck stops with the artistes. Artistes have been left at a precarious position and such campaigns would never materialise.
“The lack of structures in the music industry on how we make money from our art is discouraging. If these structures were first put in place, the government would view the creative industry as a multibillion-shilling sector that is taxable,” he said.
For film, Mr Timothy Owase, the Kenya Film Commission CEO, echoed Mr Strano’s sentiments, maintaining that sections 35B, C and D of the Copyright Act 2019 is crucial.
“For our film industry to create wealth as it should, these laws need to be implemented. We also need to appreciate the creators of this content as contributors to formal business in the country,” he said. According to the PWC report, the Kenyan entertainment and media market, which covers the Kenyan creative industry is set to see a growth of 10.3 percent compound annual growth rate, reaching nearly three billion US dollars (Sh346 billion) by 2023.
However, with the piracy menace not eradicated, many more billions of shillings will be lost.