Streaming, fintech and publishing remain the three key obstacles to the domestic business fulfilling its vast potential in the coming years. In the second of a two-part investigation, Ben Gilbert analyses how these challenges can be met.
In the era of coronavirus, celebrity humanitarianism has found new meaning. Lady Gaga’s One World concert in April collected relief funds of $127m, while, in the past week alone, Arctic Monkeys have raised almost £130,000 to support independent UK music venues and Taylor Swift donated £23,000 to a London-based student. But surely the most spectacular recent act of pop altruism belongs to a time before COVID. Last year, Akon revealed plans to build a “futuristic cryptocurrency themed city” in Senegal, after securing $4b from investors to begin construction on land donated by the government.
The mooted metropolis, Akon City, is to be exclusively funded by his own digital finance model. The project’s website explains: “Akoin is a cryptocurrency powered by a marketplace of tools and services fuelling the dreams of entrepreneurs, business owners, and social activists as they connect and engage across the rising economies of Africa and beyond.” While his vision might be deemed somewhat far out, there’s little doubt the singer’s motivations are authentic in attempting to repay his roots.
The timing feels right, too, with reports of investment in the entertainment sector seemingly commonplace across the continent. Centred squarely on music, fellow African artist Mr Eazi launched his emPawa Africa talent scheme 12 months ago. The initiative, a partnership with YouTube, supports Nigerian artists and has been bolstered by a fresh idea focusing on creatives throughout the region. Africa Music Fund (AMF) uses predictions of streaming revenues and is backed by $20m in financial firepower.
Increased smartphone and internet access set to be a decisive prompt
This most recent opportunity strikes at the heart of Africa’s future role as a competitor with every other territory on the global music scene. “Artists cannot go to banks to get money for their music because financial institutions don’t understand how to secure intellectual property. They get it for physical properties but not for music. So, because not a lot of people understand the music business, there is no finance product for musicians,” Eazi said.
This future pivots on three key challenges: streaming, fintech and publishing. The manner in which these are designed, managed and executed by domestic stakeholders will surely determine the viability of this landscape. To the initial point, the signs are good, with increased access to smartphones and the internet set to be a decisive prompt in attracting the biggest digital platforms globally, while also inspiring homegrown services to come through.
In recent months, Apple Music has shown clear signs of intent, expanding into 25 new markets on the continent and announcing a new show on its Beats 1 radio station. Africa Now Radio is inspired by the Africa Now playlist and further supported by a bi-monthly artist program, focusing on emerging talent sourced across the continent. Meanwhile, Platoon, Apple Music’s development subsidiary, is already working with 88 domestic musicians.
Explaining the initiative, Denzyl Feigelson, co-founder/CEO of Platoon, told Billboard: “I want artists to be able to manage their music on our platform; get services like health care, legal and accounting; learn about publishing, touring, how you market; and conquer things like YouTube, Facebook, TikTok, Twitch. Because if I help them grow their businesses, it’s only helping us grow our business, too. And we’re doing that in all kinds of ways.”
Apple Music and Boomplay heading the field of streaming services
Although Spotify is only officially available in five of Africa’s 54 countries – South Africa, Tunisia, Morocco, Algeria and Egypt – there are an increasing array of services to meet the demand of an estimated 350m consumers. Leading the way is the Chinese-backed but Lagos-based streaming startup Boomplay, who already have an audience of approximately 75m users, with more than 85% living in sub-Saharan Africa.
In an interview with Synchtank, Yoel Kenan, founder and CEO of Africori, confirmed the magnitude of the vast local market. “Here’s a population of 800m. It’s going to move to two billion by 2050/2055. We’ve got huge migrations from the countryside to the towns, meaning that we’re going to see at least 10 or 15 cities of more than eight, 10m people living there. Now, with the migration to town, there’s also a change in the musical consumption. It’s going to be more urban.
“Compared to Europe, compared to many other countries, Africa is going to be where the youth is.”
– Yoel Kenan, Africori
“The second thing is we know that 65% of the population are under 25, and if we’re going to more than double in the next 30 years, that young population is going to be even bigger. So compared to Europe, compared to many other countries, Africa is going to be where the youth is and the youth is what drives the energy of a country, of a continent, of a place,” explained Kenan, who specialises in distribution, rights management and artist development.
“In Africa 70% of the music consumed is local music”
Although COVID-19 has, inevitably, stalled expectations, this year’s digital-only MIDEM took the time to focus on meeting these challenges and achieving increased monetisation. While much of this progress feels naturally global, it’s important to pinpoint just how powerful the domestic market is in terms of audience. In a post last month, Music Business Worldwide’s Stat Of The Week confirmed the significance of “local consumption of local artists”, a piece of streaming data that holds particular resonance here.
Kenan suggests that “in Africa 70% of the music consumed is local music. It varies from country to country – it will be 90% or 95% in Ethiopia, 90% in Angola, 70% in Nigeria, 50% or 55% in South Africa but it might be 70% in Mozambique. So you’ve got different percentages but as a whole, I would say it’s quite easy to say 70% is local”. He added: “We see a population where there’s going to be more and more people wanting to consume music, and they all want to consume local music. It’s a no brainer. This is the place.”
There’s a buoyancy around African fintech right now that further propels this sense of momentum. In November, The Financial Times reported investments of approximately $400m in just one week, which is helping to create a profound opportunity for the music industry. Consumers can now use mobile money and fintech services to pay for streaming, while creators are more likely to get paid for the use of their music if advanced financial infrastructure and royalty accounting systems are in place.
Fintech investments firing exponential growth in mobile payments
Quartz Africa, who estimate that approximately 66% of the adult population in Africa are unbanked, confirmed the impact of these developments, stating: “Across the continent, fintech isn’t so much disrupting traditional financial services as building up a historically underdeveloped industry. By creating a raft of tech-based products and solutions, including mobile money, online payment processing, lending, and investing, these startups are plugging large gaps that exist in local financial service industries.”
“Payments have been a challenge and the answer is of course in mobile fintech innovation.”
– Barry van Zyl
African music industry specialist Barry van Zyl is optimistic. “Payments have been a challenge and the answer is of course in mobile fintech innovation,” he told Synchtank, pointing to a near 400% rise in mobile payments over the last 12 months. “As the late Clayton M. Christensen discusses in his last book The Prosperity Paradox (centred on Nigeria) these new disruptive innovations tend to create ‘pull’ industries by creating regional answers to consumer ‘pain’, rather than ‘push’ industries that are forced into the region from elsewhere, and which are less likely to trigger or maintain interest,” he explained.
A key stumbling block to the progress outlined above exists in licensing and rights management. While the necessity of copyright reform to protect artists is seen as imperative, legislation takes time. This was amplified by the recent decision of South Africa’s President Cyril Ramaphosa to veto the Copyright Amendment and Performers’ Protection Amendment bills, amid fears from both the domestic markets and broader global cultural community they would “set a standard for the rest of the African continent”.
More robust services required to bolster publishing ecosystem
Kenan cites “a lack of education” in the African music industry and admits “sometimes the challenge can be just to receive the money”. He added: “It’s something that is getting better but there’s always a need for it. Today there are more conferences and you’ve got more and more access to knowledge online but still now we’ve got great new entrepreneurs, managers, labels and artists who don’t always have the experience.”
Clearly, as the African music business continues to grow, so does the need for more robust services around the publishing ecosystem. Many people, included Kenan, have called for a universal rethink “to bypass traditional infrastructures. It’s like moving from fixed line to straight to mobile. You don’t have to build up a fixed infrastructure, which doesn’t exist in Africa really. You go straight to mobile and now you’ve got a new world and a new economy. I think that’s what we need to do as well.
“There’s an opportunity to disrupt the system. Why do we need to apply a PRS, SACEM, ASCAP etc. system into Africa?”
– Yoel Kenan, Africori
“There are opportunities to disrupt a lot of players and to create new ways of doing business. Not necessarily applying the rules that we had before in the collecting societies, there’s an opportunity to disrupt the system. Why do we need to apply a PRS, SACEM, ASCAP etc. system into Africa? There’s a new way we could do it. The problem that we’re seeing at the moment again, is whoever is going to invest needs to know that it’s going to take time,” he said.
Scepticism greets launch of UK Official Afrobeats Chart
This radical approach is perhaps not necessarily supported by Jean-Elie Ilunga, Partner Manager, MEA, PRS for Music. With a stellar roll call of members from the African creative community, including Burna Boy, Wizkid, Yemi Alade, Mr. Eazi and Sarkodie, alongside next generation stars such as Rema, Joeboy and Teni, the world’s largest collecting society by investment is keen to play an increasingly active role in this burgeoning market.
In an interview with Synchtank, Ilunga welcomed the July launch of the UK Official Afrobeats Chart, despite scepticism from some at the news. “While there have been good developments on the recording business side of things, publishing and performance rights are still a work in progress in most parts of the region. As an organisation, PRS for Music continues to evaluate and pursue new strategies in the region, in order to effectively represent our members’ repertoire across the continent,” Ilunga commented.
“While there have been good developments on the recording business side of things, publishing and performance rights are still a work in progress in most parts of the region.”
– Jean-Elie Ilunga, PRS for Music
Hearteningly, there are further signs of initiative and impact from both international and domestic perspectives. In July, The World Intellectual Property Organization (WIPO) and International Confederation of Societies of Authors and Composers (CISAC) agreed a partnership set to utilise a new software tool to manage collection societies in developing countries. Elsewhere, Gresham Music Group, founded in 1972 and now one of the largest independent music companies in Africa, has become the exclusive rights representative for the US-based SESAC, The Harry Fox Agency, SUISA Digital Licensing and Mint Digital Services.
“Africa is on the brink of a streaming boom”
Meanwhile, CAPASSO (Composers, Authors and Publishers Association) manage a centralised hub for pan-African repertoire that distributes official digital licenses. Participating countries such as Algeria, Burkina Faso, Cape Verde, Kenya, Ghana, Nigeria, Rwanda and Senegal have benefited from this joined-up approach, experiencing an annual collective rise in digital royalties of more than 60%. Indeed, CAPASSO Chief Operations Officer Wiseman Ngubo states: “We are of the belief that Africa is on the brink of a streaming boom.”
Throughout this narrative, it’s keenly apparent how much can be achieved collectively. How focus, exploration and imagination can feed into this myriad of markets, cross-pollinating new sounds and audiences. Whether it’s happening, chart-centric hook-ups between Tiwa Savage and Sam Smith or more practical, business-focussed deals like the one inked between Warner Music Group and Kenan’s Africori, this is a competitive but collaborative space, as he attests: ”The creativity that comes from the continent at the moment is so exciting and so fresh. They’ve got a unique approach.”
This is the second of a two-part investigation into the African music industry. Click here to check out part one.