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South Africa: MTN Gets Exclusive Right to Downloads of Kwaito Singer but Vodacom offers more

Cellphone company MTN hopes to win more support from the youth market by signing a deal giving it the exclusive right to sell music downloads by kwaito singer Arthur Ma fokate. The deal, described as a "coup" by MTN portal manager Thabiet Allie, is massively eclipsed by the deal pulled off by its rival Vodacom, however, which gives Vodacom users access to a million tunes by local and international artists.

Vodacom's offering is also more economical, costing R25 a week to download a limitless number of tracks, while MTN users will pay up to R20 for an individual track by Ma fokate. The battle of the bands now playing out on cellphones is crucial because young subscribers use their handsets for innovative services, ringing up far more profit for the networks than the talk-and-text-only older users.

MTN customers will access Ma fokate's music through the MTNLoaded portal, paying R3 for a ringtone and R10 for a full track. But they will also pay for airtime used during the data download, which could inflate the bill by another R10. Allie said the MTNLoaded site, which offered news, music, games and other mobile content, was hugely successful. Downloads of local tracks accounted for 60% of all the music purchased. About 2.6-million of its 14-million subscribers in SA have registered with MTNLoaded, and last month 500,000 people downloaded some form of music.

Mofokate said he and his 999 Music record label procrastinated for two years before signing a deal to make their music available for cellphone users. He had taken time to analyse the market and to strike a good deal so the artists benefited financially when tracks were downloaded, he said.

The target market of 16- to 24-year-olds were too lazy to go to a record store, but they all had cellphones and knew how to use them, Mofokate said. The tracks will be locked by Digital Rights Management technology so tunes cannot be transferred from a phone to a computer or other device -- a tactic the music industry has introduced to maximise royalty fees.

(Business Day (Johannesburg), 5 November 2007)

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