Can the Music Industry do as much for the Nigeria economy as Nollywood ?

Over the last couple of years, the Nigeria music industry is no doubt the biggest in the African music sector as it has gained massive recognition home and abroad. It can boast of having decorated artist and internationally successful acts, with the likes of Wizkid, Asa, 2baba, Davido, Tiwa Savage and lot more. Recently, Starboy Wizkid was the only African and the first Nigerian in the the best international act category of the 2017 Mobo Awards (which he won, as have Rihanna, Eminem and Beyoncé), alongside international stars such as Jay-Z, Kendrick Lamar and Drake.

The energy of Nigeria’s music industry has additionally had a sizable economic effect. PwC’s Global Entertainment and Media Outlook 2017-2021 estimate that income from the segment will hit US$73m by 2021 (making it the biggest in the region bar South Africa, for which PwC forecasts a 2021 revenue figure of US$237m).

A major lump of the Nigerian figure originates from digital consumption, a territory of the market that essentially supported the industry in Nigeria and paved way for more upcoming artistes to follow this step. as far back in 2013, digital music consumption and income overwhelmed physical music income in Nigeria and its growth forecast remains healthy and steady.

Globally, the distribution chain has experienced a major shift as well as in Nigeria. Prior to the digital era, channels to market were typically physical retailers, analogue radio, public performance, films and TV. The delivery channels have now expanded to include digital downloads, on-demand streaming and digital radio.

According to recording industry trade body, IFPI’s Global Music Report 2017, global recorded music revenues increased by 5.9% in 2016, with 112 million users of paid streaming subscriptions driving streaming revenue growth of 60.4%, and digital income accounting for 50% of global music industry revenues.

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In Nigeria, nearly 99% of digital music revenue is driven by mobile, much of it as ringtones. The figure is expected to rise even further over the next five years, while download revenue is expected to dwindle and streaming revenue to remain low.


The digital shift has helped to democratise the industry, reducing record labels’ negotiating strength and removing the need for the suffocating record deals that historically have enriched the labels more than artistes. Popular record labels in Nigeria include Mavin Records, Chocolate City and Empire Mates Entertainment, but artistes such as Wizkid, Davido and Olamide are as big as the labels, standing on their own and running their own groups, powered by talent, popularity and huge followings across the continent and beyond. Artistes are able to generate revenue from their music through live performances, endorsement deals, merchandising and album sales via digital platforms such as iTunes, Tidal, Spotify and Spinlet. In addition, Nigeria’s mobile network provider MTN has launched the MTN Music Plus platform, which allows artistes to offer content for sale to its mobile network customers.

‘The music industry is changing globally, and Nigeria is not left out,’ says Tomi Owó, fast-rising soul singer-songwriter from Nigeria. ‘There are a lot more opportunities for artistes to distribute and sell their music now than a decade ago. The emphasis on record label deals for music distribution is dwindling, and tilting more towards well-rounded management deals that help artistes maximise monetisation opportunities for their talent and enable their career growth.’

But making music pay could become a struggle, as Nigerians increasingly expect to access music for free. Dare Odumade of digital distributor Sharebunk says: ‘Today, online music platforms have replaced CD sales, as people largely download free music off the internet to populate their playlists on their smartphones, iPods or mp3 players for music on the go. Nigerians love music on the go so much they change their internet IP addresses to US IPs in order to use geo-restricted music apps like Spotify and Pandora, regardless of complaints about poor and expensive internet connections. Stakeholders in the music industry need to figure out how to encourage Nigerians to start forming a habit of paying for music, otherwise, artistes won’t benefit fully from their intellectual property.’

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The internet has brought new and legal ways of distributing, promoting and marketing music without geographical constraint. Nigerian entrepreneurs (some of whom were in business before the 2013 arrival of iTunes in the country) have leveraged their knowledge of Nigeria’s music sector to outsell the bigger, global platforms locally. Music streaming platform Spotify is not legally available in Nigeria, so there is an opportunity for local entrepreneurs to tap into this market too.

Spinlet is one of the early birds to the digital distribution space in Nigeria and claims to have the world’s largest catalogue of Africa-centric music. Others looking to get a share of the market include music streaming app Sharebunk, which is currently beta-testing the Android and iOS platforms and has incorporated a social networking and messenger component.

So far, Nigeria’s music industry has advanced without a clearly established structure, but this has not deterred foreign interest. In the past two years, two of the world’s biggest music groups, Sony Music and Universal Music, have set up offices in Nigeria. Sony, which came in a year earlier than Universal, has already signed deals with up to seven top Nigerian musicians.

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Although these entrants will open up the music industry in Nigeria to more opportunities for global expansion, it might take some time for them to fully grasp the peculiarities of the local market, especially the piracy challenges. Much like Nigeria’s Nollywood film industry, the music scene is plagued by piracy. In fact, Nigeria’s legal music sector is comparatively small given its population of 190 million – by far Africa’s biggest.

The value gap

Regardless of the expansion in paid-for digital music platforms in Nigeria, there remains a befuddle between the value this platforms derive from the content accessible to them and the income that returns to the individuals who create and invest into the music. This value gap is the sector’s biggest challenge.

Under the present income sharing equation, the platfroms take up to 90% of sales revenue, depending on the artiste’s fame. IFPI has distinguished the esteem hole as the most huge obstruction to the part’s maintainable development. The European Commission is already working on an authoritative fix, however in Nigeria, the government has had little involvement in the music industry.

Nigeria’s music industry has colossal potential. In the event that the revenues and foreign interest tangle the attention of government and local investors – just like the case with Nollywood – music could turn into a major piece of the economy. But that won’t occur without action on various fronts. More investments in artistes will enhance their quality. but, action is additionally required with respect to the government, to set up structures to facilitate enabling services for the industry, and directions to secure the value of music and set up a reasonable digital marketplace.

Source: ACC


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