After Mariah Carey's not so charmed multi-million-dollar recording deal for Charmbracelet (2002) and One Night Alone... (2002) by Prince/The Artist (formerly known as Symbol formerly known as Prince) took a hit in record sales, CCP/ EMI South Africa cut their losses along with some 20 artists including Fistaz, Admiral and Hip Hop Pantsula (HHP). However, due to a bidding war between CCP and its mother company, EMI, CCP annulled the retrenchment and re-signed HHP. But less than six months later in February 2002 HHP had already co-found a recording label with Modibe. CCP, no matter how much they grovelled, could only settle for a licensing deal with independent recording label and licensor, Babyphat Records.
"They made losses after the risky upfront multi-million dollar deals with the bigger stars of the music world. When the decision was made, artists such as Mandoza, DJ Fresh, DJs at Work, Brenda Fassie and others considered to be bigger stars were retained during the company's cutbacks. However, when they came back to re-negotiate we had already moved on," says Modibe.
According to Modibe, Babyphat Records co-founder and label manager, the concept of an independent record label seemed only a dream.
"But over time it grew from street label to corporate label by word of mouth," says Modibe.
As a record label starting up, HHP was the only artist under it. They quickly worked on a project Omang that as expected came with learning curves of a new territory.
"I was mainly focusing on managing the label so we needed help with other legalities that we were not familiar with. It later, turned out that our trusted legal aide misappropriated funds and conducted dubious deals on the side," Modibe says.
It was a kick in the gut to learn that one of their employees could be disloyal. Furthermore, they learnt that conducting business in "good faith" has no place in this industry.
"We came to learn that it is not s/he who you know that can see you through, but it is only we who can see ourselves through. We are now older and wiser," he says.
Fortunately after reviewing their projects last year, Modibe claims that 90 percent of those projects they embarked on proved to be a success.
They managed to clinch an exchange deal with American clothing brand, Mecca, making HHP the first artist in Southern Africa to have a dressing contract with Mecca, which expired last year. The deal only lasted a little over a year.
Though the core Babyphat Records business is music, still HHP remains the one that projects are built around. Currently, its executives are planning to introduce a clothing line of their own. Modibe claims that this is because a load of the revenues Babyphat generates come through HHP.
"Now HHP Clothing line is in the works, but it is an idea borne from Loxion Kulca so we are doing thorough research on the market, copyrights and textile industry. We do not want to have an oversight of certain technicalities involved to make this work," says Modibe.
The textile industry is not the only one that has its lure for Babyphat. Distribution is one industry that appeals to them.
"Distribution here is difficult. However, we have done our research and a little distribution network is a feasible idea. What it takes is to know your audience, learn where and who they are, and how they want their product presented. Our market scope will not just be Botswana. We do not want to set territories for Babyphat. The world is our territory and that is what sets our record label apart from others in the country," he says.
Through EMI world, at least one artist from Babyphat Records, HHP, has been able to successfully sell his albums across borders.
Omang, HHP's third album release, sold only 14,000 units, while Omang - Reloaded, a follow-up to Omang is the third best selling album in South Africa after Skwatta Kamp and Pitch Black Afro. Sitting at 15,000 units it has sold in bulk in South Africa also a few thousands in Swaziland, Namibia and Botswana since its opening month. To reach gold status, it needs 10,000 more units sold.
In Botswana it has sold only 1,000 units.
"Botswana is below market sale. It is peculiar with artists here because branding an artist is not a priority. There is just too much concentration on making money. It is just one of the problems that add to the local industry. Here every song goes on air regardless of the quality of the product. Without quality control and branding, music is a territorial trade," Modibe says.
In most instances for artists to make money, they tend to sell from a car boot, which Modibe says can work for or against an artist.
"Making revenues is a plus for the artist, but there are hidden costs that include packaging, transport and inventory, and logistics are hard to keep track of. Not only that, but demographic sales are blurred," he says.
The worst that can result from selling from the boot of a car is that the product is exposed to piracy.
"The lack of well-structured associations such as RISA (Recording Industry of South Africa) as in South Africa, does not allow consumers here to be charged for blank CDs and cassettes inclusive on purchase. Songs are openly burned from the Internet and in the process, the artist is ripped-off of their copyrights and royalties. This does not just affect music but other industries as well," he says.
In the meantime, Babyphat Records is hoping that a couple of their newly signed artists will pull their own weight once their album projects are released this mid-year. Both Kabo "Orakle" Lekwalo (his second album after Sex) and Monametsi "Apollo Diablo" Nkhukhu (his first album) have been long anticipated.
Late last year, Orakle's latest track Bad Girl was on rotation at Ya Rona fm, but was immediately pulled off air.
"I was not in the country when Orakle went on air. He actually acted without my consent, but fortunate enough for him, his going against my authorisation worked in his favour. Apollo Diablo and I on the one hand had a fall out in December but we quickly patched things up after a lengthy talk to reach an understanding of each other's needs," Modibe says.
Artist and manager had a fall out because they had not fulfilled some of their targets from last year. As Apollo Diablo's manager the buck stops with him and according to him he did not want to take the blame for errors that he could foresee if he did not make the decisions that he felt were best for his artists.
"If you do not treat music as a game of numbers, sales and percentages you lose. Creative control is vital to succeed. A lot of artists lack the education and knowledge of the rules of this game. Therefore, I prefer to make deals that have economic sense for both the artist and myself. I give you the budget and you give me sales," he says.
In that respect, being calculating is a necessity for when and how he will consent to the release of both the artists' albums.
"I need to feed off the right energy from the artists to finally say we are ready to go out there," he says.
Three years ago that might have been a different story, but with age he has become more of a realist and does not believe in rules, regulations and set principles.
"The beauty of being young is that you do not realise how much of a dreamer you are, but as you grow you became the person that you least expected," says Modibe who will be 25-years-old come September.