According to a new PricewaterhouseCoopers (PwC) report, Nigeria’s music industry’s economy will continue to grow till 2022.
This growth will be propelled and sustained by the increasing reliance on mobile devices by music consumers, thereby increasing the power of the country’s telecom establishments.
“Digital music revenue overtook physical music revenue as far back as 2013, but mobile formats – essentially, caller ringback tones (RBTs) – account for virtually all of digital revenue,” the report says. “It is therefore a music industry dominated by mobile telecom operators, which also own some of the country’s biggest streaming and downloading full-track services.”
The nature of RBTs imparts a resistance to piracy unseen in most other music formats. Nonetheless, the scheme favours artists who have already recorded and released hits, as the telcos pocket a significant percentage of the revenue per unit. Artists with smaller fan bases are unlikely to earn substantial amounts.
The report forecasts revenue of $65m for the Nigerian music industry in 2022, a considerable rise from last year’s $35m. But despite digital music’s heavy contribution to this figure, streaming is still not a major source of revenue for the Nigerian music industry. This is because of poor Internet penetration. The reliance on ringback tones is unchanged from the PwC report of last year when it was reported that ringback tones had “become a big social phenomenon among Nigerians”.
Nigeria’s relationship with ringback tones is similar to Kenya’s, but unlike South Africa’s, which will see increased demand in streaming. “As in the world’s developed markets, demand for digital music-streaming subscription services is strong [in South Africa], with revenue from the [streaming] segment in 2017 up by 76.3% on the previous year.”
The difference in revenue streams between the music industry’s in these countries is intensified by the minuscule contribution of ringback tones to the South African music economy.
“Ringtones and ringback tones music revenue is set to account for just over 1% of digital recorded music revenues in South Africa in 2022, down from 38% in 2013 as streaming revenues take centre stage,” PwC says.
“By contrast, ringtones and ringback tones revenue will still account for over 99% of digital revenues in both Nigeria and Kenya as both countries are underserved by major streaming platforms, and low fixed broadband penetration has historically prevented the development of the digital download industry.”
The presence of Swedish company Spotify in South Africa is a major boost for the country’s streaming revenue. And while the company is reportedly set to open shop in North Africa in November, no plans have been announced for West Africa, where local players like Boomplay and MTN’s Music+ control a healthy slice of the market.
All three countries are however united in one regard: by 2022, the music industries in each would grow substantially compared to their value in 2018.
Culled from MusicInAfrica