Music streaming

Report: Africa ripe for music streaming growth

In February 2021, Spotify’s market entry into 39 African countries gave new impetus to music streaming competition. Spotify’s decision to bet on the whole continent, rather than continuing to focus on North Africa and South Africa, underscores the interest of new global players in this promising market, reports Dataxis.

Music streaming has experienced multi-speed development across the African continent. While music services are fairly well established in South Africa and in the North African zone, there is still room for improvement in the sub-Saharan region. Today, the African music streaming market is undoubtedly centered in South Africa according to Dataxis, which records around 40% of revenue and almost 11% of monthly active users (MAUs). With Egypt, Nigeria, Morocco and Algeria, 86% of total market revenue is generated by the top five countries.

The African territory also conceals certain specificities and subtleties that make this market unique and complex to approach for music streaming platforms.

The music streaming market is first intimately linked to connectivity and device adoption. These external factors have a major impact on the adoption of streaming services and remain the biggest challenge in the African case. In fact, the internet penetration rate is currently around 35% and still below 20% for some countries. As for smartphone adoption, for example, the penetration rate averaged 35.5% in 2021. Even though revenues are expected to increase significantly in the coming years, there is still a limit to the growth of streaming music in Africa and streaming cannot go faster than infrastructure, says Dataxis. As a result, the population penetration of streaming services is expected to remain low compared to the US and European markets, at least for some time.

Low purchasing power and number of unbanked people in African countries are also factors that pose certain challenges to music streaming services. People are generally not yet ready to pay for music streaming services, which means that paid subscriptions are less prevalent than in other markets. Most streaming music is supported by ads. The next step for many players is therefore to find a way to convert these users into real subscribers.

Nevertheless, the African market remains to be conquered. Its large population and its strong growth potential make it capitalize on various musical platforms for their expansion. Premium not being king, most platforms have opted for a hybrid model and offer both paid and free versions. However, the specificities of the African market force the various players to define tailor-made strategies in order not only to remedy the weakness of connectivity and purchasing power, but also to fight against content piracy, which is a real problem. In each country.

Kenyan music platform Mdundo has opted to work closely with local artists, also delivering 50% of its revenue to them, hoping that the amount of music from African artists available on the platform will bring success. Boomplay, first launched in Nigeria, benefited from its partnership with Transsion, a mobile manufacturer whose smartphones have pre-integrated Boomplay across the continent. The Chinese platform Audiomack is also banking on partnerships and artists by teaming up with Ziiki Media, one of the leaders in entertainment in Africa. For his part, the Nigerian actor Spinlet is appreciated for his weekly and monthly subscriptions which offer great flexibility to users.

All in all, the specificity of the African music streaming market is such that players will have to demonstrate an increased ability to adapt. Africa can certainly be a growth lever for music streaming platforms, the latter must now find how to activate it, concludes Dataxis.

Source link