The sales of CDs in the three key markets of the African continent, South Africa, Nigeria, and Kenya, have been on a steady drop for the last two decades following global trends. More and more music lovers have been ditching them for digital downloads.
The transition came as smartphones became more common, and more Africans gained access to the internet, spurring new technological breakthroughs in the financial technology and media industries. Music is becoming more accessible to the local market because of these developments.
Platforms are seeing unprecedented streaming potential in an area previously overlooked in the global music business.
Consumption of Music in Africa
Statista data suggests that the African music streaming industry would record a 297 million USD revenue in 2022. Also, by 2026, Africa is projected to add over 55.8 million users.
By the end of 2020, the mobile subscription in the continent had reached almost 495 million users, about 46% of the region’s total population, which is an increase of about 20 million from 2019.
But, the move has not been without its share of challenges, with the cost of the internet still being prohibitive for most. A report from A4AI, Alliance for Affordable Internet, found that African countries pay some of the highest rates worldwide to access the internet based on their income.
The revelation has spurred a battle among streaming companies for the key markets in Africa as they compete to shift their strategies to fit into local dynamics.
Taking on Streaming Giants
Aside from data expenses, musicians worldwide have criticized global streaming giants like Spotify for their poor royalty compensation strategy. This, combined with their failure to chart on global billboards and the desire of many artists and creatives to retain complete control over their music distribution and product bundles, has allowed African music streaming platforms to thrive.
Spotify, a forerunner in music streaming and possibly the best-known streaming platform globally, launched in 40+ African countries in 2018. So far, it has provided Africa’s largely young population an option to stream music on its platform. However, recently, streaming startups established in Africa have started to challenge Spotify’s dominant position in the market.
Boomplay and Mdundo are two platforms that have grown significantly in recent years to become serious competitors.
The Key Strategies of African Music Streaming Startups
Boomplay is Africa’s most popular music streaming service, with 60 million active users. It’s one of a slew of domestic music streaming and multimedia services posing a challenge to the on-demand worldwide streaming business.
It’s plain to see why the Chinese-owned, Africa-focused startup has overcome global streaming giants like Spotify and Apple Music to become the continent’s preferred alternative if you look at their strategy.
In addition, every smartphone produced by Transsion, the makers of Tecno, Infinix, and Itel, Africa’s top-selling phone brands, comes with the Boomplay App preinstalled.
Mdundo, founded in 2013, provides free downloads of millions of tracks, mostly from Africa. It also includes a global music catalog that may be accessed via a freemium or subscription model. Adverts in the form of display banners and audio advertisements placed in its music tracks are its major source of revenue.
Mdundo features a one-of-a-kind, artist-centered financial approach. Artists that join the platform get a 50% split of all ad revenue generated by their songs. According to Quartz Africa, over 80,000 musicians have joined the company, resulting in a massive database of 1.5 million songs.
The Pan-African music streaming service reported a 22 percent increase in its user base in the fourth quarter of 2021, up to 20 million subscribers from 16.3 million the previous year.
While the continent’s current revenue potential is offputting to global corporations, it will produce the preponderance of music subscribers in the coming decade.
Local players establishing closer relationships with the industry, artists, the music community, and the media are likely to seize the majority of the streaming sector from global platforms.