Spotify and the future of African streaming

NEWARK, NEW JERSEY – OCTOBER 26: Davido performs onstage during the Power 105.1’S Powerhouse 2019 presented by AT&T at Prudential Center on October 26, 2019 in Newark, New Jersey. (Photo by Brad Barket/Getty Images for 105.1)

By Stella Nasambu – BBC Money Daily

Fact box

$1.6bn – predicted revenue podcast ads will make by 2022
85 – Number of countries Spotify will enter in 2021
75 million – Monthly streams by Boomplay
1 billion- Expected users Spotify will have after launch into 85 markets

Overview

Spotify has finally made its debut to the wider Africa market. Despite staying away from the continent for over a decade and being accessible only through VPN. On paper, the African market is important as it will give independent & upcoming African artiste an even bigger platform and expose Spotify to a 1 billion user market share.

But what does this really mean for African artiste and Spotify users?

Reviewing the streaming industry – What Africa has to offer:

Spotify launch into South Africa in March of 2018, was met with raised eyebrows. The expected first African home for many industry pundits was the highly populated Nigeria but back then Claudius Boller, Managing Director for Middle East and Africa at Spotify, said South Africa was first choice for lots of reasons but especially for its developed music market.

Mr Boller insisted that Spotify was committed to taking the slow approach when it came to rolling out in new markets. He reiterated that Spotify needed to have all the music in place to cater the needs of the fans

It was no surprise that after a decade of careful deliberation, Spotify finally made a move to launch in 2021 to the rest of the continent. A quick scan of their website lists some African Spotify markets such as Mali, Botswana, Nigeria, Kenya among the 37 countries to join the Spotify family.

Spotify’s biggest music stars are surprisingly Nigerian though with Artiste such as Burna Boy, Davido, WhizzKid and Tiwa Savage out streaming the rest of the continent. While these artistes ride the wave of afrobeats, the streaming giant offering promises to be quite diverse with curated playlists of different genres like Amanpiano, Bongo Flava, South African and many more for sampling both in the continent and globally.

Blinky Bill, a producer, musician and trailblazer of the Kenyan urban scene has the luck of being both user and featured artist. His thoughts about Spotify’s launch? “I use Spotify all the time, they have an amazing Algorithm that helps me discover so much more music that I’d possibly like and my first thought was no more VPN!!!” he said.

With all the excitement, there has been online chatter on a few gaps mainly from artistes … Blinky said “I think mostly (the gap) is just information on how to get your music onto the streaming sites. But check out the websites of Distrokid, TuneCore, Orchard etc and figure out what works for your budget and get your music out there.

Blinky’s music is on Spotify to the delight of his fans everywhere “I have been added to a couple of playlists and I’m getting my music discovered by different audiences globally and with tools like Spotify for artists, you get real time data on who is listening and where and this can help you be more intentional about your next moves” Blinky said.

The multi-hyphenate musician did however point out wanting to see more of the Benga genre and was keen on exploring the Podcast platforms available on offer.

This echoes a sentiment by Phiona Okumu, Head of Music – Sub-Saharan Africa at Spotify. She said that Spotify local producers were on ground in key markets and were ready to service the needs of the various market moving forward.

Market needs may vary but according to an industry insider DJ Edu (Destination Africa, BBC 1xtra /This is Africa, BBC World Service) African users are looking at access to wide catalogue of music, services on multiplatform at affordable services, “They also want a light app that doesn’t use up lots of data” he said.

He also cited a future streaming trend, combining streaming, video and social media platforms for effective promo is a growing trend. Spotify’s latest features such as Spotify clips is their answer to the growing trend of short behind the scenes videos of an artiste. This is expected to roll out in the coming months.

Podcasts is also a trend that Spotify plans to lean into for 2021. Spotify has invested roughly $1 billion into podcasts. According to the foremost global research body on Advertising , World Advertising Research centre, by 2022 podcasts could account for 4.5% of global audio advertising spend, a total of $1.6bn

Global streaming competitors

Spotify arrives in a market already occupied by Boom play. According to Boomplay they service 70 million + monthly users in markets such as Nigeria, Kenya, Ghana and Tanzania. The streaming platform has had its fingers on the pulse of African music since it’s launch in 2015.

Competition isn’t even on the radar for Boomplay according to Tosin Sorinola Director, Artiste and Media relations in Africa. She said “In my opinion, all the streaming platforms in Africa today are actually allies as we all face the same biggest threat and challenge, Piracy.”. Tosin pointed out Boomplay’s wish to work with other legitimate platforms, rightsholders and government to fight piracy.”Only if we could achieve that, we would then be able to actualize the potential of the 2nd largest continent with 1.3 billion population and build a well-structured ecosystem for the industry” She said.

Artiste vs Spotify: The Mystery of artiste compensation?

Spotify sceptics have greeted its entry into the African market with a raised eyebrow. Artiste compensation has been a sore point for Spotify.

LONDON, ENGLAND – SEPTEMBER 14: Tiwa Savage attends Fashion For Relief London 2019 at The British Museum on September 14, 2019 in London, England. (Photo by Jeff Spicer/Getty Images for Fashion For Relief)

Spotify does not disclose how much it pays artists per stream, but the Recording Industry Association of America have calculated it at about $0.00318, meaning that a rights holder would receive $3.18 (£2.74) per 1,000 streams. The association has stated that 30 seconds of a song is considered a full stream and is paid out as part of the grand total of the stream royalty.

As recently as November of 2020, the streaming received an open letter from the Union of Musicians and Allied Workers in the United States. The letter called for better pay and claimed that Spotify allegedly encouraged established labels and management companies to pay for plays. The letter also stated. The practice amounts to payola,” added the letter. “It is unacceptable and must be stopped.

Are African artistes nervous about compensation? UK- based DJ Edu and industry insiders doesn’t think so “African artist compensation in Africa has always come mostly via shows and endorsements so the controversies do not affect the African market as much where royalties feature in very few countries.” he said.

Spotify seemed bent on World Domination and the months ahead are going to be exciting for the streaming market. To Spotify, welcome to the continent and let the games begin.