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Music streaming apps drive sales in Covid era

STANDARD ENTERTAINMENT
By Stevens Muendo | March 25th 2021
Nviiri the Storyteller. [Edward Kiplimo, Standard]

The entry of music streaming platforms such as Apple Music, Spotify and Boomplay in Kenya and across Africa are having a positive effect on the region’s growth in music revenue.

This is in line with the global trend over the past year, where streaming services accounted for 62.1 per cent of global music revenue, with performance rights revenues taking the biggest hit as concerts and events were cancelled due to Covid-19 pandemic.

According to the 2020 Global Music Report released by International Federation of the Phonographic Industry (IFPI), the organisation that represents the recorded music industry worldwide, streaming contributed 71.9 per cent of Africa’s music revenue.

South Africa and Middle East control much of the revenue, with other sub-Saharan countries showing an increase in uptake in the streaming services on a year-on-year basis.

Streaming saw revenues up by 36.4 per cent.

“We are encouraged that the world is embracing music from Africa as seen in the rising number of nominations for global music awards,” said Angela Ndambuki, Regional Director, IFPI sub-Saharan Africa.

Ms Ndambuki said it was also encouraging to see the uptake of music streaming apps grow in other parts of Africa such as East Africa - where Spotify docked recently.

“The fact that this year’s report has featured Africa and Middle East is testament to the increasing opportunities that have been accentuated by the recent launch of music streaming platforms.

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"We are excited to see the growth in the coming years,” she said.

Landmark deal

Three years ago, Boomplay, Africa’s leading music streaming and download service, and Universal Music, announced the signing of a landmark licensing agreement covering multiple markets in Africa.

And last year, Universal Music signed a landmark deal with Sauti Sol that saw the group release its latest album, Midnight Train, under the stable.

This was after AI Records, a subsidiary of Universal Music, signed a record deal with gengetone group Ethic Entertainment.

Tanzania’s Diamond Platnumz and Venessa Mdee are the other East African singers signed by the universal music leader.

In Kenya, music downloads and online subscriptions hit a high last year.

Boomplay said streaming went up by more than 200 per cent.

“According to trends, many people started to depend on streaming services as their source of entertainment when they had no other source of their choice of entertainment,” said Camilla Owora, Boomplay public relations manager.

With a strong presence in Nairobi, Boomplay currently provides more than two million songs and thousands of music videos to more than 36 million users, with nearly two million new users added each month.

The other local music streaming service provider Mdundo, has over 40,000 artistes from across Africa signed to it, with 1.5 million users accessing its catalogue every month.

The platform announced a deal with Warner Music Group last year.

It is this kind on interest that has spurred earnings.

Recorded music revenues in the region increased by 8.4 per cent in 2020, outpacing the global recorded music market grew by 7.4 per cent, the sixth consecutive year of growth, according to the report.

Total revenues for 2020 were $21.6 billion (Sh2.3 trillion).

During the same period, there was a notable increase in the signing of African artistes by global recording labels, a trend expected to increase revenue in the coming years.

“The easing of internet costs in South Africa, at a time the country experienced the continent’s largest coronavirus pandemic outbreak and longest lockdowns, may have led to the increase in uptake of streaming services,” said Sipho Dlamini, CEO Universal Music South Africa and sub-Saharan Africa.

In other regions, revenues grew differently, with Latin America maintaining its position as the fastest growing region globally (15.9 per cent), as streaming revenues grew by 30.2 per cent, accounting for 84.1per cent of the region’s total revenues.

Asia grew 9.5 per cent and digital revenues surpassed a 50 per cent share of the region’s total revenues for the first time.

Revenues in Europe, world’s second-largest recorded music region, grew by 3.5 per cent as strong streaming growth of 20.7 per cent.

In the US and Canada, revenue grew by 7.4 per cent. The US market grew by 7.3 per cent and Canada’s recorded music revenues grew by 8.1 per cent during that period.

Global revenue growth was also driven by streaming, especially by paid subscription streaming revenues, which increased by 18.5 per cent.

Innovative efforts

There were 443 million users of paid subscription accounts at the end of 2020. Total streaming (paid subscription and advertising-supported) grew by 19.9 per cent and reached Sh1.4 trillion.

The growth in streaming revenues more than offset the decline in other formats’ revenues, including physical, which declined by 4.7 per cent; and revenues from performance rights that declined by 10.1 per cent, largely as a result of the Covid-19 pandemic.

In Kenya, according to reports by the Kenya Copyright Board (Kecobo), most collective management organisations responsible for collecting royalties on behalf of artistes were hit hard by the pandemic.

“Fuelled by record companies’ ongoing investment in artistes and their careers, along with innovative efforts to help artistes bring music to fans in new ways, recorded music revenues grew globally for the sixth consecutive year," Frances Moore, said IFPI chief executive said. 

He added: "As record companies expand their geographical footprint and cultural reach, music has become more globally connected today than ever before. 

“This growth has spread globally. With many impacted by the pandemic and concerned with growing social injustices, record companies have worked hard to make a meaningful, lasting contribution to the world we want to live in.

In a Zoom panel discussion on the report, Dennis Kooker, President Global Digital Business and US Sales at Sony Music Entertainment said music had no barriers. 

He stressed the opportunities posed by technology in the growth of the music recording industry worldwide.

“The role of record labels and that of the artiste remains collective, though each is distinct. It is all about art,” said Simon Robson, president, International, Recorded Music for Warner Music Group, a member of IFPI.

IFPI is the voice of the recording industry worldwide, representing more than 8,000 record companies.

 

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