Africa’s music industry seems to be hitting all the right notes. A few years ago, this space was considered a minor “blip” on the international music industry’s radar. Today, things have changed significantly and the continent has emerged as a lucrative market, with every artist worth his salt making a beeline towards it.

So, what changed? This space came into the spotlight, owing to the slow but steady uptake of smartphones and data-enabled services. Sample this- mobile broadband service penetration in Sub-Saharan Africa increased from 2 per cent in 2010 to 11 per cent in 2013. The good news doesn’t end there-global research firm Informa Telecoms & Media estimates that smartphone connections on the continent will increase to 412 million in 2018.

Interestingly, these impressive numbers have not just supported but facilitated the growth of digital music in Africa. How? Well, digital technology has enabled the recording industry to reach and encompass the mass market across the continent. Essentially, like every new enterprise, the advent of digital music in Africa was slow-as recently as two years ago. In the early days, music-based services were pretty much confined to ringtones and caller ring back-tones (CRBT). Stepping back in time a bit-the digital music industry always existed in Africa, based on lucrative partnerships, with regional and national telecom operators. The list includes MTN, Airtel, etc. These players first successfully built up a business case with the hugely successful CRBT facility.

Shortly thereafter, not wanting to miss out on the action, bigwig international record labels followed and kept following until, like any other lucrative industry, the African music space became digital, overcrowded and cut-throat competitive.

Of course, their efforts paid off-to quickly illustrate-as per industry reports, digital music rules the roost in the Big Three markets-Kenya, Nigeria and South Africa. In Kenya, for instance, spending on digital music is expected to increase from $19.8 million in 2012 to $20.7 million in 2015. Likewise, South Africa-the largest formal music market in the continent-registered a 107 per cent increase in digital music in 2013, representing 14 per cent of the total market.

Having planted their flags, the main item on every record company’s agenda currently is to rollout innovative services and spend big bucks on their artists and repertoire (A&R) division. To bring these ambitious plans to fruition, the market has been flooded with various music streaming services, such as Deezer, rara and Simfy. It worked-as per industry reports, revenue from digital music services in South Africa doubled last year and accounted for over 14 per cent of the total market.

An important A&R activity being undertaken by bigwig record companies is investing in and promoting local artists, independent labels and entrepreneurs. But, wait. While these initiatives sound promising, we haven’t as much as touched upon the biggest challenge before every player in this space. Simply put-walking the tightrope between offering local and international content. Even simpler-building a repertoire of local content.

For a market like Africa, that’s the rule-not the exception. Even today, as per Informa, a staggering 70 per cent (yes, you read that correctly) of the music business in Africa comprises of local content. This is indeed in stark difference to the rest of the world, where international artists are sought after. So, essentially, a bigwig record company or operator could boast of the biggest names as a part of their music portfolio. However, in Africa, content (read: local) matters, not how impressive the catalogue is! To illustrate-66 per cent of subscribers in Nigeria opt for local music, compared to 16 per cent opting for international and 18 per cent opting for regional tracks.

The message to international players is clear-African subscribers demand a mix of music from across the world and within the continent itself.

The idea behind this blog is to present an objective picture of the music industry in Africa. So, while there is little doubt that it is on the fast track, several issues remain. Broadly, these include unfettered piracy, no representation for local artists and lack of transparency.

Another important, lingering concern is the existing value chain in the industry itself. At the recently held Value Added Services (VAS) Summit in Johannesburg, panelists scrutinizing distribution channels and revenues of the African digital music industry opined that the value chain currently in play in the largely download-based market is ineffectual, as it does not provide fair income to artists and does not incentivise consumers to pay for music.

Without tooting my own horn (or indeed, my company’s), we at Mahindra Comviva aim to be the piece of the jigsaw puzzle that ensures the music reaches the customer. We are an established music content aggregator in Africa, with over 400,000 tracks. Another significant milestone was collaborating with Africa-based TRACE TV, wherein we play the role of an end-to-end solution provider, offering innovative music applications such as karaoke and content aggregation services to TRACE. The idea behind the partnership is to permit TRACE to reinforce its position as a “first movers” and an iconic youth brand.

Moreover, we keep ourselves busy in the continent by promoting local artists and ensuring that 75 per cent of our content is localized. We understand the importance of keeping it simple and have thus ensured that accessing and opting for a service is quick and easy-while offering a wide gamut of services at flexible price points. Our CRBT offering, for example, comprises of sports CRBT, CRBT album, Facebook CRBT, reverse CRBT, gift CRBT, corporate CRBT, festive CRBT and promotional CRBT.

I am also delighted to state that our efforts in Africa (though far from finished) have paid off. We have registered an eight-fold growth in our African business over the past three years. Broadly, this includes a 10-fold growth in content consumption and a 50 per cent increase in content consumption per subscriber.

In a nutshell, Africa isn’t an easy market to crack. However, with the right mix of music tracks, an effective distribution mechanism and moving from the physical to the digital will help-in part. Are you tuned into Africa?

Atul Madan

Atul Madan

Atul Madan, Chief Operating Officer - Mobile Lifestyle Solutions, Atul has over 20 years of experience and has held a variety of senior executive roles in the software and telecom domains. At Mahindra Comviva,...