UNIVERSAL Music Group (UMG), Warner Music Group (WMG) and Sony Music Entertainment have either opened offices on the continent in recent years or, like some international private investment firms, have invested in local operations and artists.
Moreover, there is a new generation of digitally savvy local artists and entrepreneurs in Sub-Saharan countries like Nigeria, Ghana, Kenya and South Africa, who use social media, other digital tools and live tours to reach the millions of fans at home and in the diaspora.
Underpinning their growing activities is the presence of international and regional music streaming platforms, from Spotify, Apple Music, Deezer and YouTube Music to Boomplay and MTN’s Music Time (formerly Simfy).
The majors are back
Only two decades ago, the majors were leaving the continent (apart from South Africa) because of the epidemic levels of CD and vinyl piracy.
“In an environment where there was limited or no legal access to music, the launch of streaming services has been a monumental step in the right direction,” says Sipho Dlamini, managing director of Universal Music South Africa and Sub-Saharan Africa (English speaking).
“While the narrative around streaming was initially concerning to some, we’ve been able to show growth in revenue to our artists and they have been able to track and understand the earning potential in a song and their catalogue without having to wait six months.”
Tracy Fraser, managing director of Warner Music South Africa, agrees: “We’ve seen in South Africa that licensed streaming services can attract fans away from pirate sites and I’m hopeful that pattern can be replicated across the continent,” she says, adding: “As internet connectivity improves and data pricing reduce, the streaming market will grow even more. The opportunities for our local and international artists are immense, if we can fairly monetise the huge demand for their music.”
During the UK-Africa Investment Summit in London this January, the British government pointed out that Africa has eight of the world’s 15 fastest growing economies and 60% of the region’s population is under 25.
A young market appeals to the music business especially as, by 2050, Africa will be home to two billion-plus people and one in four global consumers will be African.
Music Streaming African boom
UMG and WMG have licensed several international titles to Boomplay, the African music streaming platform launched by Transsnet Music (co-founded by Chinese internet-and-entertainment giant NetEase).
Boomplay is available in 10 key African markets, from Cameroon to Zambia, and claims 62 million users. And it recently clinched a deal with Merlin, the global digital-rights agency, which will collect royalties due to artists featured on the platform.
Other local music streaming operations in Africa include Nigeria’s UduX, which has a deal with UMG. Others have formed partnerships with local telecoms giants to offer music streaming in a region where very few fans have bank accounts or credit cards. But with smartphone penetration accelerating, music-related revenues can be collected via telecoms operators.
In addition to Boomplay, there is Songa via Kenyan telecoms operator Safaricom; Music Time is offered by South African telecoms giant MTN, which also carries Jay-Z’s Tidal in Nigeria and Uganda.
They join the Kenya-originated pan-African service Mdundo and the forthcoming WAW Music in Côte d’Ivoire.
Allure of African artists
WMG sealed an agreement with Chocolate City Music, Nigeria’s most successful record label. It is home to Femi Kuti, the multi Grammy-nominated son of Afrobeat pioneer Fela Kuti, and other made-in-Africa stars with an international following.
The deal creates global opportunities for African acts, while giving WMG’s international roster targeting Africa access to on-the-ground experts.
In addition to its South African headquarters, UMG in Africa is doing brisk business in Nigeria with its population of almost 195 million, the neighbouring English-speaking countries and Cote d’Ivoire for Francophone markets.
It also owns sister companies like UMG Live Africa, a booking agency/talent management firm.
In 2019, UMG signed an exclusive global deal with Tiwa Savage, the Nigerian singer-songwriter icon and Grammy nominee with 9.8 million Instagram followers. Yemi Alade (a Midem alumnus), the first African female act to record 100 million-plus views for a YouTube video, and her label Effyzie Music Group, have nabbed an international deal with UMG’s Africa and French operations.
UMG is also sealing deals with the award-winning Afropop group Sauti Sol, Kenya’s biggest contemporary-music export. Meanwhile, Nasty C, South Africa’s most streamed artist, and Savage were the first African acts perform at UMG’s invitation-only 2020 Grammy-Awards showcase.
Meanwhile, Sony Music has signed international artist and/or distribution deals with hot African music artists Davido, Wizkid and D’Banj.
Their stellar reputations have attracted global hit makers like Drake, Chris Brown, Rihanna and UK rapper Skepta to reach out to African artists to collaborate on live events and recordings.
Streaming helps African artists to go global
Nigerian record label Chocolate City’s digital sales executive Bernard Nwankwo says streaming has contributed to Africa’s access to the international market.
“The Warner Music deal will expand the global reach of Chocolate City’s artist roster, open the artists up to more international collaborations, and drive digital streaming as content is opened up to a more international audience,” he says.
In addition to Femi Kuti, Chocolate City’s stable includes Blaqbonez (who has been profiled by the New York Times and The Guardian newspapers), Ckay, MI Abaga and Dice Ailes.
“Another indirect contribution the streaming industry has introduced to the market is the automation of global best practices, particularly those pertaining to official releases and timelines.”
Other local enterprises attracting foreign investment include Mavin Records, the Nigerian label that raised a “multi-million” package from US venture-capital (VC) firm Kupanda Holdings, which is backed by TPG Growth (a Spotify investor).
In fact, Boomplay recently collected US$20m from two private-equity companies: China’s Seas Capital and Cayman Islands-based Maison Capital.
As the streaming market develops, rights owners still earn more from ringback tones, observes Akotchayé Okio, international development officer for Africa at French royalties collective management organisation SACEM.
“When it comes to streaming, a bespoke approach to the African continent is needed as not many consumers have bank accounts, so the subscription model in Western markets can’t be applied effectively,” he states.
“Apart from South Africa, digital music in all the other territories is dominated by ringback tones still. Ringback tones are available via telcos and are therefore safe from piracy. But streaming could offer the new opportunity to consume music legally and help structure a legitimate business. We aim to encourage a fair revenue share between right holders, digital platforms and telcos.”
One solution has been to educate artists, fans, local businesses and regulators about why copyright protection and its enforcement are indispensable.
To this end, SACEM and Midem collaborated on a four-country roadshow in 2018 in Nigeria, South Africa, Côte d’Ivoire and the Republic of Congo to promote the benefits of legally distributed music.
South Africa stays strong
South Africa remains a beacon highlighting why the Sub-Saharan continent deserves the global industry’s faith.
In January, the national authors and publishers’ copyright organisation CAPASSO partnered with tech-centric international music rights-management group Muserk to enhance its ability to collect digital-rights royalties.
Platoon, the artist-and-label services start-up acquired by iPhone giant Apple in 2018, has opened its Cape Town Creative Lab division to help develop the careers of South African talent.
Meanwhile, independent South African label-and-publishing stalwart Gallo Music Group remains one of Africa’s most prolific music creators/distributors.
General manager Rob Cowling says Gallo, whose roster includes the legendary international award-winners Ladysmith Black Mambazo, is behind a new generation of digital artists like Jeremy Loops, Paxton, up-and-coming Afro-pop star Lungisa Xhamela, new hip-hop act Anga, plus Luyolo, winner of the 2019 TV reality talent show Idols 2019.
The company has content on the international streaming services, including Apple Music, Spotify, Deezer, and YouTube Music.
“Africa still represents a growth area for collaborations, opportunity and legitimacy and a continent rich in musical culture and fresh sounds,” Cowling says.
“Owned South African repertoire accounts for 75% of active catalogue sales, with Gallo on an aggressive drive for archive digitisation, unlocking thousands of old masters and new digital revenue streams, as well as vinyl re-issues and income for our Gallo Music Publishers division.”
He says that growth rates of streaming music have been between 40% and 50% over the last few years. And although the rates are slowing, they are still “showing an upward trend compared to a continued physical drop of around 20% to 28%.”
And while piracy rates remain at about 8% to 11% of local music consumption, it is declining, thanks to the anti-piracy work of the Recording Industry of South Africa trade body. As far as he is concerned, “the future of Gallo and the South African music industry looks bright”.
TOP PHOTO: Yemi Alade at Midem