Following global trends, compact disc (CDs) sales in three key markets on the African continent, South Africa, Kenya, and Nigeria have been on a steady decline for the last two decades as music lovers ditch the discs for digital downloads. More Africans are gaining access to the internet as smartphones become ubiquitous, which has also spurred new innovations in the technology sector within the financial tech markets and media industry. With these innovations, music is becoming more accessible to the local market and platforms are seeing new streaming potential in a region that was once seen as inconsequential within the international music market.
This is part one of a two-part article series exploring how music is consumed in Africa.
According to Statista, revenue from the music streaming sector is projected to reach USD 297 million in 2022 and by 2026, Africa is anticipated to have around 55.8 million users.
At the end of 2020, the continent’s mobile subscription reached 495 million people representing 46 percent of the region’s population — an increase of almost 20 million from 2019.
But the move online has not been without its fair share of challenges. Mobile data costs are still prohibitive for most. A report by the Alliance for Affordable Internet (A4AI) found that, based on their income, consumers in African countries are paying some of the highest rates in the world for internet access. This has spurred a battle among streaming companies for the African market, as they compete to shift their strategy to fit these market dynamics.
Taking on Spotify
Beyond data costs, artists the world over have decried the stingy royalty payout model adopted by global streaming giants such as Spotify. That, coupled with their inability to penetrate global billboard charts and the fact that many artists and creatives want to maintain full control of their music distribution and product bundles, has created room for African music streaming platforms to flourish.
In 2018, Spotify, a pioneer in music streaming and arguably the best-known streaming platform in the world, expanded to more than 40 African countries, thus offering Africa’s predominantly young population an additional music streaming option. However, African-based streaming startups are beginning to challenge Spotify’s market dominance.
Boomplay and Mdundo are two platforms that have become formidable contenders with impressive growth over the last few years.
With 60 million active users, Boomplay is the most popular music streaming service in Africa. Leading the pack, it is one of a bevy of homegrown music streaming and content platforms that are offering alternatives to the on-demand global streaming model.
Looking at their strategy, it’s easy to see why the Chinese-owned, Africa-focused company has beaten global streaming giants such as Spotify and Apple Music to become the continent’s best alternative.
The Boomplay App comes preinstalled on every smartphone sold by Transsion, the manufacturers of Tecno, Infinix, and itel — Africa’s top-selling phone brands.
Launched in 2013, Mdundo offers free downloads of millions of songs mainly from Africa. It also has a global music catalogue available using a freemium and subscription-based model. Its primary source of revenue is advertisements through display banners and audio advertisements embedded into its music tracks.
Mdundo has a unique, artist-centered financial model. Artists who sign to the platform take a 50 percent cut of all advertising revenue on their songs. This has proved attractive to African artists, as over 80,000 musicians have registered with the company, generating a collective catalogue of 1.5 million songs according to Quartz Africa.
In the last quarter of 2021, the Pan-African music streaming service announced a 22 percent growth in its user base, up to 20 million users from 16.3 million the previous year.
While revenue potential on the continent, as it stands, remains unattractive to global companies, the region will produce the majority of music subscribers in the coming decade. It is highly likely that local players which have been cultivating deeper relationships with the industry, artists, music community, and media might just take the largest share of the streaming segment from global platforms.
Source: https://globalvoices.org/
