Africa goes digital as music lovers turn to surfing for songs

Video did indeed kill the radio star in the 1980s, and the compact disc replaced the traditional 45 vinyl record. And while the compact disc is not yet dead, Africa has now joined the global trend of going digital to get its music.

The recording industry has finally woken up to Africa’s cellphone revolution by working across the continent to establish innovative services and invest in local artists.

Frances Moore, chief executive of the International Federation of the Phonographic Industry, recently highlighted the increasing importance that the international recording industry places in Africa:

It is a region that is seeing fast economic growth and the spread of technology is enabling our members and their business partners to reach vast new audiences

The rise of digital downloads

The compact disc’s days seem numbered. In 2014, the recording industry’s global digital revenues increased by 6.9% to US$6.85 billion. It received the same amount of income from digital channels (46%) as physical format sales (46%).

Compact disc sales in three key markets on the continent – South Africa, Kenya and Nigeria – are showing a heavy decline as music lovers ditch compact discs for digital downloads.

It is forecast that digital’s share of total spending on recorded music on the continent will rise to 67% by 2017. Music sold in the digital format in Nigeria in 2012 was around 49%. In Kenya, it is expected that consumer spending on digital music will overtake physical spending this year.

Digital sales in South Africa remain low because of the country’s poor broadband penetration. They are expected to account for just 14% of South African recorded music retail sales by 2017.

But the appetite of South Africans for compact discs remains. Compact disc sales, which make up the bulk of physical recorded music sold in South Africa, shrank from 15.9 million units in 2012 to 12.2 million in 2013. Physical sales are forecast to drop to 12.6 million by 2017, almost half of the 23 million sold in 2008.

But how much are these music markets worth in total? South Africa’s music market was worth US$177 million in 2012, down from the 2008 revenue of US$209 million. Annual revenue is forecast to grow marginally remaining relatively flat at US$179 million in 2017.

Kenya’s music market generated revenues of US$19.8 million in 2012, up from US$16.5 million in 2008. Annual revenue is expected to go up in 2015 to US$20.7 million, but drop slightly by 2017.

Nigeria’s music market generated revenues of US$51.3 million in 2012, up from the 2008 amount of US$45 million. Annual revenue is forecast to to reach US$53.8 million in 2017.

Why the industry is looking to Africa

Even though these numbers are low compared with other regions, Africa is expected to become one of the most lucrative markets for the music industry with the expectation of fast economic growth over the next few years. The industry has acknowledged the huge potential and has appointed a specialist to work in emerging markets on the continent for this purpose.

Previously, Africa was not considered a key market by the recording industry because sales did not come close to bigger markets on other continents. That has changed since the smartphone explosion in Africa. Digital technology is enabling the recording industry to effectively reach mass numbers of consumers across Africa for the first time.

The recording industry has wisened up to the smart-phone as a marketing tool for music. This makes sense, since the growing trend internationally has been for digital music and streaming, both of which appear to be the perfect fit for the average smart-phone user.

Across Africa, the consumption of music looks set to develop and grow parallel to the growth of smartphones. There were 778 million mobile subscriptions in Africa at the end of June 2013. The continent’s mobile subscription count will reach one billion during 2015 and 1.2 billion by the end of 2018.

Piracy a thorny problem

While cashing in on the technological revolution, the industry across Africa and internationally faces the growing challenge of music piracy. This remains the single biggest threat to the livelihood of artists.

Apart from depriving artists of the royalties they deserve, it means one cannot obtain a true reflection of what has been sold. Globally, the music industry has embarked on a number of initiatives, including teaming up with internet service providers to curb the problem.

Karendra Devroop receives funding from the National Research Foundation of South Africa.