Trailers, Garages & Cottages: The Sheer Music Publishing Story (Part II)
by Sheldon Rocha Leal
The first part of this story saw David Alexander evolve from a university student events promoter, whilst studying at the University of Cape Town (UCT) to an entrepreneur. He used the knowledge acquired whilst at university to start a Music business, Tequila Records, in Johannesburg with his former UCT friend and roommate. He soon realised he needed to break free and start his own business as his vision wasn’t fully aligned with that of his partner. This is when he started enacting plans to pivot to the next phase of his career. He toyed with the idea of going into publishing, the management of the song and the songwriter, versus the artist and the record (recording industry).
Although, whilst at Tequila, he had signed publishing agreements with some of South Africa’s most pivotal artists, he didn’t initially know what to do with these contracts. He, therefore, banked the latter mentioned deals whilst applying his mind, before making a final move. After two fortuitous meetings in the U.K., brokered at MIDEM (Marché International du Disque et de l’Édition Musicale) in Cannes, France, the groundwork was laid for the establishment of Sheer Music Publishing (SMP). The one deal was with Palan Music (a publishing company) and the other was for a piece of software called Maestro, which would assist with the administration and collection of publishing royalties. The software was a “game changer” in the world of publishing administration and would change how people did this kind of business in South Africa (RSA). In this part of the story I will explore the circumstances and context surrounding the establishment of SMP.
Various important occurrences stimulated and strengthened Alexander’s resolve to “Start his own thing”. In an encounter with legendary South African record executive, Harvey Roberts (Bula Records), in Sun City at the SAMA Awards, David asked him how many SAMAs he had won. The executive responded by saying that it was not about the awards but rather about sales. This made David start thinking differently about the business: there was no point in winning critical acclaim and awards if the operation they were running was not making money. Moreover, David determined that the recording industry was too volatile, with publishing offering greater stability and security, as overheads were lower and the return on investment greater. Based on his business training it was a no-brainer, the closer one could get to the creative source, the more secure one’s investment would be.
In this case the source is the Music creator, content, i.e. song, therefore, publishing. Furthermore, David wished to form a family and the recording industry, with its extended hours, erratic budgets and slim profit margins would not permit him to fully explore this ambition. The publishing industry, on the other hand, could afford him the stability required for the formation of a family, whilst enabling him to manage his time more efficiently, facilitating the creation of his own business. Additionally, David expresses that he had the advantage of watching Global trends and implementing hybridised solutions for the South African Music industry. Essentially whatever happens in developed Music markets takes a few years to filter into RSA, giving Alexander the time to perfect his models before implementing them. This is, essentially, how he pivoted to the next phase of his career.
Lastly, a chance introduction to Damon Forbes (founder of Sheer Music) by Karen Coetzee, who helped produce Music videos for Tequila Video, reinforced David’s determination to pivot. Damon’s business philosophy was completely different from that of Jason’s, which was more “build it and people will come” whilst Damon was more “cut the cloth to fit the piece”. Damon believed in working things backward, he was a bottom-line kind of guy. Firstly, he would forecast the sales for a specific project, then establish a budget that would culminate in a profit and work backwards determining the recording and marketing costs based on the budget and projected sales. This bottom-line thinking resonated with David’s business training and orientation.
In David’s encounter with Damon, he identified a gap in the executive’s business…Publishing, something in which he had been dabbling. This illustrates David’s foresight and vision, something that has always made him a competitive contributor in the Music business. When David came along Sheer was actually two companies, Sheer Sound, focused on World Music and Afro Jazz, run by Damon Forbes and Sheer Music, focused on Dance and EDM music, run by Mark Connor. It was agreed by Mark and Damon that David would start a publishing division called Sheer Music Publishing, which would cater to the publishing needs of the former mentioned companies. Part of the agreement saw all three men owning an interest in each other’s businesses. Additionally, David brought with him deals with songwriters he had previously signed at Tequila Publishing, as well as the Palan deal and consolidated his publishing interests in SMP.
There was, however, a transitional period in which David worked at Tequila Music for part of the week and SMP for the remainder of the week, until he could fully pivot. This went on until 1999, when it was decided to shut down Tequila Music. At this point Jason went on to found a successful restaurant chain called Moyo and David invested all his energy is making SMP a success. Between 1995 and 1998 SMP signed seminal figures in the world of RSA music, off the back of Sheer Sound releases. These artists were predominantly from the Afro Jazz genre and included, Gloria Bosman, Allen Kwela, Sipho Gumede, Oliver Mtukudzi and McCoy Mrubata. David’s first international deal, with Palan, paled in comparison with anything he achieved at SMP. Things were going well at SMP and they even won an Oscar for the “Tsotsi” soundtrack.
There came a time, however, when David realised that in order to expand his operations he would need to break free of his Sheer Music partners, pivoting for a third time, culminating in a buy-out in 2011. There were a few occurrences that inspired this strategic move. The NAPSTER case of 1999 irrevocably changed the recorded Music industry landscape, ushering in the digital music revolution. Within a matter of years, recorded Music sales halved and the value of the business declined from US$35billion to US$15billion globally. This resulted in many Music business thought leaders pivoting to a new Music Industry reality, including David. This change meant that parts of Sheer Music were no longer as profitable as they once were. David, therefore, realised that he needed to cut his losses and invest in the parts of the business that could weather the ensuing Music industry tsunami.
Whilst, his partners believed the publishing component of the business played a subservient/peripheral role to the recorded Music divisions, David rightfully believed the real income generator was the publishing division. After an initial buy-out of Connor’s portion of the Sheer business, David was motivated to completely cut ties with his associates, giving him the freedom to reposition the company for exponential financial growth. Damon and Mark went on to achieve solo career success. Damon opened a wellness company (Healthwell Brands), and an artist management agency called Breakout Management. Mark, on the other hand, consulted for Gallo Records, started a Music video company called Picture Worxx and an indie recording label called Shelter Music.
David was now free to expand his musical territory into Africa. Post the buy-out various international deals were penned with publishers, strategically placing SMP as the “go to” South African independent publisher. Deals were negotiated with Mute Song (U.K.), Basart (Netherlands), Kobalt Music (with just over 250,000 songs), Black River Music (Japan), Times Music & Saregama (India), Reverb Music (UK), to mention a few deals. To adequately service these clients it was essential that a greater workforce be employed, additionally increasing the size of the creative staff, aligning to international trends. Furthermore, SMP invested in the active search and promotion of local content, which resulted in more opportunities for a larger number of individuals within the organization.
David realised that with a lead time of six months, before he needed to pay his international clients, he could use the money sitting in the bank to develop local talent, stimulating the RSA Music creation industry. This resulted in greater income generation prospects and prosperity for the company. Because of his international affiliations, SMP was now also able to leverage foreign sub-publishing deals for local Music creators in which they could generate foreign currency for the use of their content outside of the country. Deals where subsequently struck with local indie publishers such as Ndozino Music (Mandoza), Faith Publishing (Kabelo), VCK Music (Van Coke Cartel), Dr. Doctor Music (Jeremy Loops), Jakk Songs (Kreesan) and TS Records (Zahara).
This ties in with research conducted by the International Federation of the Phonographic Industry (IFPI) about the Music business, which states that it spends proportionality more on research and development than other sectors. The Music business spends 16.9% of generated income on developing talent, which is more than the pharmaceuticals, automotive, technology and healthcare industries. But David did not rest on his laurels and used the respectability generated at SMP to position himself strategically within the RSA Music Industry. He elevated himself as a thought leader in the sector and a custodian of Music business knowledge in the country. Over the years he has sat on various committees and boards.
These bodies included the Board of MUSA (Musicians Union of South Africa), he also started Moshito (Africa’s largest Music conference and exposition) in 2003 and was a director of NORM. He was later vice chairman and then Chairman (2004/2010) of NORM, chairman of SAMEX (South African Music Exports) (2006) and a founder board member of CAPASSO and later Vice Chairman (2014–2018), which replaced NORM. Furthermore, he was a founder board member and later chairman of MPASA (Musicians Publishers Association of South Africa) (2014/2021) and a board member of the International Music Publishers Forum (2017). Finally, he was a Board Member of the local Entrepreneurs Organisation, specifically within strategic global alliances and mentorship. Moreover, he spoke at multiple conferences both locally and internationally, which not only elevated his profile as an expert in his field, but concurrently improved the status of SMP as a publishing leader in Africa.
In 2006 he spoke at Porto Musicale in Brazil, followed by speaking engagements in Australia (2008) at the West Australian Music Industry Conference. He also spoke at WOMEX (Worldwide Music Expo) in Cardiff, U.K. (2012), Atlantic Music Expo, Cabo Verde (2014) and MIDEM, Cannes, France (2015–9). His next major move was initiated after another chance encounter. This time at a Rosie Katz coordinated event in Johannesburg, with Seidu Iddrisu, a Ghanaian Music manager, whose band David had gone to watch during World Cup proceedings in 2010. The manager invited David to visit Ghana with the aim of using Alexander’s knowledge to empower local talent. Seidu agreed to facilitate encounters with various artists and content creators. Through these encounters David identified a gap in the market, especially with regards to producers who were not being compensated for their creative contributions.
These interactions gave David invaluable insight into what was happening not only in Ghana, but in many other African territories, where similar scenarios were being played out. He knew the solution to the prevailing problems was education and an awareness of musician’s rights, as he set out to plug the gaps. Although Ghana did not pan out in the way he thought, he was invited to speak to the Music industry in Kenya in the same year to offer administrative and organisational advice relating to Music rights and publishing. This resulted in SMP assuming membership of MCSK (Music Copyright Society of Kenya) in 2011. This gave SMP access to Music creators in Kenya and allowed David to use some of his overflow capital to develop talent in the country.
The problem with the Kenyan market was many artists and publishers were weary of Western companies, who they considered exploitative, which made breaking into this territories a major challenge. David, therefore, needed to build some cultural and social capital with creators in the country. SMP subsequently assumed membership of COSON (Copyright Society of Nigeria) in 2012, an emerging Music industry powerhouse based on the size of the population and the developed broadcast industry. With his association to the members of the International Music Publishers Forum, David was granted access to connections in global Music publishing markets. This would financially benefit his overseas clients as well as his newly formed African clientele.
SMP’s connections to African Music markets made them highly desirable for two groups of stakeholders. One were African content creators who could benefit financially from the company’s international networks. The other were the institution’s Western affiliates who now had access to an expanded market in Africa and, therefore, a larger income pool. It’s difficult to ascertain what had a bigger influence on the exponential growth of SMP. It was either all deals the that were brokered, or David’s strategic positioning within the local and global Music industry or possibly a combination of both. Either way, the effects were far reaching and positive for all concerned.
Sheer’s connections to African markets made them desirable to their international clients, who could generate income from Kenya and to the Kenyan publishers who had an outlet to get their Music distributed internationally. The result is that SMP became Africa’s biggest independent Music publisher and David the “Go-To Africa Guy”. If anyone in the world wanted to know anything about African markets, trends or artists David was the man. Now, not only was he a RSA Music industry thought leader, he was also an expert on the African Music market.
As we travel through the SMP story it has become clear that the only key to survival is evolution and adapting to an often changing environment. This is something that is not unique to the Music industry, as COVID has vividly illustrated, it’s something that impacts all industries. The key to any successful entrepreneur is being able to identify a gap and having the foresight to take advantage of the opportunity. In David’s case he did this on various occasions. He identified a Publishing gap at Sheer, a downward trend in the global recorded Music industry, subsequently repositioning his investments and identified an education gap in African territories. Furthermore, David positioned himself to be in the right rooms at the right time, speaking to the right people. There are no such things as “chance encounters”, Alexander cleverly placed himself at events and locations where he knew he would meet the right people, and that he did on a myriad of occasions.
Leveraging these relationships he put himself out there and sat on various influential board and even led some. But being at the right place is clearly not enough, one needs to do one’s homework if one expects to lead. Clearly David started dissecting and learning and in the process emerged as an expert on the South African and African music business. This led to speaking engagements, which positioned him as a thought leader in his field, articulated into further deals, and greater prosperity not only for himself, but also his company and those associated with him. As we conclude this part of the story there are many lessons we can learn from the strategies employed by the Music executive. In the next part of the story we explore his move into a more international career.
