Music streaming wars in Nigeria and the imminent entrance of Spotify
The entrance of Spotify will make it the 12th music streaming platform in Nigeria. Overall, it will make it the 15th music streaming/download platform that Nigerians use one way or another.
In 2021, the world’s largest music streaming service, Spotify will improve its African operation. A Nigerian office is said to be at the forefront of those plans. Over the past 18 months, Spotify has been making its efforts clear in a bid to own the future of audio content - and video to a lesser extent.
During that period, it has invested heavily into podcasting with deals for/purchases of Gimlet, Parcast, The Joe Rogan Podcast and Anchor. It also recently purchased Megaphone, in a bid to enliven its SAI for podcasts. This year, Spotify has seen its users soar to 320 million across the world - 29% year-on-year growth.
Of that 320 million, 144 million are premium while 185 million are ad-supported. In Q3 2020, it also announced a Free Cash Flow of €103 million.
The entrance of Spotify will make it the 12th music streaming platform in Nigeria. Overall, it will make it the 15th music streaming/download platform that Nigerians use one way or another.
Streaming wars in Nigeria
In Q4 2019, Spotify was rumoured to be gearing up for a Nigerian office, but COVID-19 disrupted that. Around the time those rumours started, MusicTime launched in Nigeria with Oye Akideinde as its CEO. Its service charges users per their session/activity on its app. Once they log out, their session ends and fees stop running.
Despite COVID, YouTube Music, YouTube Main, TIDAL, Audiomack, Soundcloud, Gbedu, Mino and UduX made their respective entrances and emergence known. In February 2020, YouTube Music announced a smooth app which charges N900 for single subscribers and N1400 for family plans monthly and respectively.
For its part, TIDAL partnered with MTN for plans as short as three days’ access, which costs N120, and a month’s Tidal access for N800. TIDAL subscriptions can also be bundled with MTN mobile data purchases – monthly access with data is N1,200.
Spotify will also compete with Apple Music, Boomplay and Deezer. Apple Music shares a similar premium subscription fee with YouTube Music. Both of those platforms don’t have ad-supported features for their monthly active users.
On the other hand, Boomplay is the largest music streaming platform in Nigeria. In the final quarter 2019, Motolani Alake - one-half of Listen Africa - chatted with Oladele Kadiri, the General Manager of Boomplay Nigeria and gathered that at the time, Boomplay had over a million users in Nigeria.
But since the turn of 2020, Boomplay has faced stiff competition from American streaming platform, Audiomack.
As of November 2020, Boomplay still holds the lead in terms of subscriber base, it currently has over 43 million tracks which shall grow to 45 million by the end of 2020. But then Audiomack is catching up fast as a more desirable brand with higher brand equity.
These days, both Audiomack and Boomplay offer ad-supported listening features for non-premium subscribers. Boomplay was already entrenched in the Nigerian market when Audiomack initially soared as a competition to Soundcloud. Its selling point was that it would pay artists from its ad placements on their songs.
This model is similar to YouTube Partnership Programme [YPP] which allows creators with at least 1,000 subscribers and over 4,000 hours worth of viewership in a year to register to get paid by YouTube, based on the value of their viewership.
But unlike YPP, Audiomack doesn’t require any extra-special registration. In the same way it attracted the niche/underground artist crowd in the US with Chance The Rapper’s Acid Rap debuting on its platform, it attracted the niche/underground artist crowd to its platform with promise of earnings.
Even with the low rate of the pay, artists jumped on the bandwagon and so did Nigerian music lovers as the era of music blogs finally slowed down. At different points in 2020, Audiomack became the most downloaded music app on Apple App Store and Google Playstore.
Anytime Nigerian artists would celebrate their streams, around 70% of those streams would come from Audiomack.
On November 20, 2020, it was announced that Nigerian artist, Bella Shmurda announced that his 2020 EP, High Tension had hit 49 million streams on Audiomack. These days, Audiomack has also launched a premium feature which costs around $1.38.
Boomplay’s major edge is that it's pre-installed on Transsion phones - TECNO, Infinix and itel. These products are by far the most used phone brands in Africa. In 2019, Transsion was named as one of the top 10 most desirable brands in Africa - behind MTN and DSTV.
In 2019, Boomplay’s campus tour saw its subscriber-base rise even further. Dele Kadiri told Alake that their stint at the Ahmadu Bello University, Zaria saw some students subscribe for three months on the spot.
On its part, Boomplay charges N500 for its premium plan. Nonetheless, the growth of streaming has been slow due to the fact the following factors;
Ignorance of the presence of streaming services to even those who can afford them.
Nigeria is a highly mobilized country, but internet subscription costs a lot in a country where its largest percentage of citizens are reported to live under $1-a-day. The idea that you have to pay for the internet and then pay for streaming is something most Nigerians can’t afford.
Even those who can afford those two things will shy away from them due to the presence of illegal download sites or music blogs.
Music blogs
Music blogs peaked in Nigeria in the late 200s, but they are illegal. They obtain music illegally, offer free download to listeners, make money off ads and then consume all the proceeds by themselves without remitting anything back to artists.
ALSO READ: Here is how Nigerian music blogs can survive their inevitable journey into obscurity
Conversely, a lot of Nigerian artists still willingly offer their music to sites like Naijaloaded because they need exposure. This is because most Nigerian artists make most of their income off live performances and endorsements.
In the earliest days, this was the purpose that music blogs served. They offered exposure, documentation of releases and then played an important role in linking Lagos with London as part of the ‘Afrobeats to the world’ movement. Till this day, a lot of Nigerian artists can’t detach from the role of music blogs.
In part, this is because the larger part of Nigeria’s music listeners still access music through these music blogs. In a chat with Martin Nielsen, the CEO of Mdundo, it was revealed that around 60-70 million Nigerians have downloaded music from these blogs.
But recently, that music blog era has slowed down. Two giant music blogs, Notjustok and Tooxclusive have evolved. The Demola Ogundele-led Notjustok now has a distribution service and a budding streaming platform, Mino.
Tooxclusive has also stopped hosting raw illegal files on its website. Instead, it posts Audiomack links of songs. On the template of a music blog, Martin Nielsen and his partner have created a music download service called Mdundo. In Q3 2020, it raised over $6 million in an IPO and now trades on NASDAQ.
Instead of obtaining music illegally, it deals with the big three record labels and obtains music legally. For trackable revenue, it then inserts ads into the opening 15 seconds of every song via an automated service and splits revenue with artists 50/50. Already, it’s available in 15 countries and has over 3.5 million users.
Artists also have a dashboard where they can track their music downloads.
Other platforms
While some of these platforms are not exactly available in Nigeria, Nigerians put their music on Bandcamp - which aids music sales and ease of interfacing between artist and fans, Pandora and the rebranded Napster - which is rumoured to pay around $12,000 for every one million streams.
Bandcamp occupies a similar niche to Selar, a platform that allows artists to easily sell their music. In 2019, Dennis Peter wrote for NATIVE Magazine that Selar left over 90% of the proceeds from Alpha Ojini’s debut album, Half Price to the rapper. Selar was founded by Douglas Kendyson.
Spotify and Nigeria II
A few Nigerians have been using Spotify in Nigeria through a VPN.
It was the second streaming service in Nigeria after Deezer became the first notable entrance into Nigeria in 2012.
Unlike Spotify, Deezer’s subscription fee is against the dollar - which currently stands at around N5,000 and 2,000 - is quite steep. The fact that only account holders from only a few banks can access the app is also a problem.
Deezer also doesn’t have a Nigerian office, it primarily operates from South Africa. Interestingly, it also has a freemium, audio ad insertion feature for its freemium listener. It’s ‘Flow’ feature is also amazing and so is its User-Centric Payment System. For a company of just 500 people, Deezer is an overachiever.
Deezer and Spotify’s respective entrances into the country came after iTunes became a cool iPod, iPhone and PC feature for Nigerians. Around that time, YouTube Main also became a formidable tool for Nigerian music videos and viral content creators.
When Spotify was easily accessible to Nigerians at the start of the last decade, it also competed with the now defunct Spinlet and iROKING by Iroko Partners.
In a conversation with Oye Akideinde, the CEO of MusicTime Africa - who worked at Spinlet before moving to Boomplay - said that the Spinlet made a lot of strides but struggled in a more difficult market to the current market - which is still difficult for music streaming platforms.
On the other hand, iROKING took a difficult route. In 2013, Michael Ugwu who is now Founder and CEO of FreeMe was fired as CEO of iROKING. The company cited misconduct and breach of contract. Ugwu was accused of launching a competing entity in FreeMe while he led iROKING.
After seven years, the matter was finally settled after Ugwu was acquitted by an Industrial Court in Ibadan. iROKING also wound up shortly after Ugwu was fired by the company.
In 2014, MTN and Huawei also collaborated for MTN Plus, which allowed users to pay subscription fees via airtime. The deal between MTN and Huawei shares certain similarities with the respective deals MTN has with MusicTime and TIDAL. However, they are not the same thing.
Around the same time, 9Mobile (formerly Etisalat) also owned Cloud9, a music streaming platform in partnership with Timwe Group. But Cloud9 and MTN Plus have since gone under - at least, to the public eye and on that model, they have.
But since Spotify became officially unavailable in Nigeria, this is the first time it will be coming back to Nigeria.
Why was Spotify away for so long?
Spotify has been available in South Africa for a few years. Initially, it was thought that the struggles of music streaming in Nigeria was the sole reason why Spotify remained unavailable in the country while Apple and Deezer made inroads into the country.
After all, its cheaper student plan costs $4.99 or - per current exchange rate - about N2000 monthly. It’s main plan costs $9.99 or - per current exchange rate - about N4000 per month. But reports have claimed that while the struggles of streaming played a role, the major reason why Spotify stayed away was due to Nigerian laws.
One of those laws specifies that foreign companies could only take their revenue out of the country in Naira, not in any foreign country. The problem with that for any foreign company is that it would be operating against the dollar - arguably the most powerful currency in the world.
The dollar is one of the determinants of oil prices amongst other major things in the world. But while Spotify was away, a few Nigerians still used the service with the aid of VPN. A few IJGBs also accessed the service with their foreign bank accounts and ‘unrouted’ mobile devices.
Spotify and Nigeria 2021: What does it mean?
First off, it means that Spotify is ready to throw its hat into a really wide ring. If everybody else is in Nigeria, it could be doing itself a disservice by further staying away from a country of 200 million people, with a myriad of problems which could become multi-billion dollar companies.
2021 will also see Facebook open a Nigerian office.
Secondly, it means that the Nigerian music industry is in maturation. This year, the lockdown helped create a lot of platforms and solutions while the practitioners in the industry are now more visible. What remains to be seen is how much Spotify will charge users and its solution to the legal troubles that kept it away for a long time.
More likely than not is the idea that it will reduce its fees for its Nigerian users like TIDAL did. In 2019, the idea of something rumored to be called, ‘Spotify Beta’ flew around. The idea was said to be a Spotify service with reduced fees and limited features.
Yes, some of these companies will pack up and leave. But the few of them who thrive will really thrive. In particular, Spotify has shown a doggedness in a game where it struggled to break even for a number of years.
Benefits of Spotify to the ecosystem
By far, Spotify is the best music streaming service in the world. It is like YouTube Music on speedballing. Its UI/UX is amazing and its playlists are the best in the world. Two of its playlists, Rap Caviar and Hyperpop have single handedly launched a few careers. Rap Caviar alone has 13 million subscribers.
The entrance of Spotify will boost the wider Nigerian economy and present an opportunity for some high-paying jobs to a number of people who will be charged with creating something special.
Of course, after the early bubble, the company will face a reality check like every other foreign company, but the future of Nigerian music looks really bright so there’s nothing to be overly worried about.
The entrance of Spotify into the Nigerian ecosystem will likely impact podcasting. Companies like Visual Audio Times and Aristokrat are podcast networks with some valuable assets like 234 Essential, A Music In Time, I Said What I Said and more. Spotify will be interested in podcasts as it seeks to dominate the audio experience ecosystem.
It will also hand out bags for original content formats. We are also likely to see high-priced buy-outs of African content platforms, distribution companies and streaming platforms between 2021 and 2025
Its ad-supported interface will also mean two things;
A unique opportunity to attract users.
A unique opportunity to get some ad revenue with its massive brand equity.
UPDATE: On February 21, 2021, Spotify expanded operations into 80 countries across the world including Nigeria and Ghana. Its pricing was reduced and similar to Apple Music’s and YouTube Music’s pricing.
While Apple Music has a student plan of N500, Spotify’s student plan is N450. Instead of a ‘Spotify Beta,’ Spotify has something called ‘Spotify Lite’ that reduces data consumption. The freemium model of Spotify is also aided by ads.
Like Deezer, the audio quality on the freemium size is also significantly lower.
Amazon
Next stop for African entertainment looks set to be Amazon. Already, Amazon Music charges the least subscription fees in America.
#ListenAfricaExtra - Here are additional bits of content from the past week;
Excel Joab of Boombuzz Nigeria has a fun chat with Mama Africa herself, Yemi Alade. You can read it below;
Watch new Facts Only with Motolani Alake as he reviews A Better Time by Davido;
You can catch up with Motolani Alake’s work this week HERE.
Fu’ad Lawal, Editor-In-Chief at Zikoko starts a newsletter, Vistanium.
Veteran Culture Journalist, Ayomide Tayo launched the first installment of his newsletter, Naija Times. You can also get his podcast, 234 Essential HERE.
Veteran Journalist and Tech professional, Chiagoziem Onyekwena also manages GetDotAfrica, a weekly newsletter on happenings in African Tech.
Davido Adeleke, Head of Communication at Eko Atlantic started Communique, a newsletter.
Veteran Nigerian Journalist and Director of Marketing at OPay, Osagie Alonge is back with a new podcast titled, A Music In Time.
You can catch up with veteran Nigerian Journalist, Jide Taiwo’s newsletter History Made for some mind-blowing stories about Nigerian music.
This week, our playlist features;
AFRO&B
Psycho YP and Azanti - Nobody
Wurld featuring Kida Kudz and Cuppy - Bossy
Rowlene ft Nonso Amadi - Hypnotise
Herman Suede - Medawase
Shekhinah featuring Bey T - Fixate
Afropop
Black Coffee featuring Pharell and Jozi - 10 Missed Calls
Rowlene - You on You
Yemi Alade - True Love
Azawi - Quinamino
Omah Lay - Godly
Rap
D.S.6 - TC BOP
Lil Kesh - YAGI LEVEL
GNL Zambia - Saba Saba
Joash - No Religion
Klu - Original
Alternative
Umu Obiligbo featuring Victor AD - On God
Rowlene featuring Manana - Sunday Morning
Busiswa featuring DJ Tunez and D3AN - Lucky Star
Mr S - Blue Days
Amaarae featuring Kojey Radical and Santi - JUMPING SHIP
You can get our playlist on all five streaming platforms HERE.
Contact us:
Follow us on Twitter: @ListenAfrica_
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Shoot us an email for playlist inclusion or a feature: curatealisten@gmail.com
Until next week, guys…