Despite a cat’s cradle of challenges around digital rights and payments, not to mention the constant threat of piracy, digital music is seen as a large opportunity for African musicians and mobile industry players, according to speakers at the Mobile Entertainment Africa 2012 conference held in Cape Town this week. General sentiment is that making digital music more available will go a long way to thwarting piracy.
According to Yoel Kenan, founder and CEO of AFRICORI, a digital music company specialising in emerging markets, up to 90% of music consumed online is not strictly legal, thanks both to piracy and consumers’ perception that online content should be free.
In order for the digital music industry to reach its potential in the continent, infrastructure is key, as well as having the right meta-data, digital distribution, delivery platforms and reporting in place, said Kenan.
“African content is being sold worldwide,” he says. “We now have to open the pipes within Africa.”
One of the platforms that has set out to do this is iRoking, part of the iRoko Partners stable, which has set out to provide Nigerian artists with new online revenue streams by building a platform for sharing and selling music online that includes metadata and ownership details.
“Ownership is currently up in the air,” says Micheal Ugwu, CEO of iRoking. “We need a digital platform for artists and consumers, as a formal record label structure and publishers doesn’t exist.”
iRoko Partner’s head of marketing and analytics Lanre Akinlagun meanwhile says that the Nigerian movie industry, dubbed Nollywood, saw counterfeits entering the market within 48 hours to a week of a movie being released, resulting in little incentive for movie producers to produce quality work.
Wanting to fight this trend in the music industry, one of iRoking’s services to artists is to partner with iTunes and publish on behalf of the artists. It also facilitates the removal of illegal content on iTunes — in some cases Nigerian artists were unaware their music had been published by pirates on iTunes, and certainly weren’t receiving any revenue from sales, said Ugwu.
The company splits revenue 60/40 in favour of the artist, and over the last 12 months has grown to 31-million views, with 24% of these from mobile devices.
While platforms such as iRoking are hoping to tackle privacy by making licensing easier and more structured, the speakers also included also highlighted online payment challenges as a hurdle to the continent fully unlocking the potential of the digital music market, with just the ring-back market predicted to reach US$1.4-billion by 2015 according to Mike Johns, CEO of Digital Mind State.
According to iRoking’s Ugwu, the best way to monetise content for the artists is a challenge for the industry.
Premium-rated SMS is a non-starter thanks to the disproportionate pay-out of 60-80% to the mobile operator; credit card payments are hampered by the large number of unbanked consumers in Nigeria, as well as a lack of trust; and mobile money is still in its infancy, he says.