According to the International Federation of Phonograpic Industry report 2012, only just 6% of recorded music sales in South Africa was in the form of digital media in 2011, leaving the rest wholesomely in physical format. When this statistic is compared with fellow BRICS countries, it falls well short of the average digital music consumption which stands at 34%. With just 6% of South Africans into digital music, (the largest African market which could make it into the IFPI report), it would seem therefore that the African digital music market is largely untapped.
A closer look at the South African digital music sales shows that while the sun is setting on ringtones and ringback tunes, the trend for subscription music services is on the increase. But the mobile trend, which has been established in other BRICS countries for example Brazil where according to the IFPI report, 15% of consumers use their phones to download and listen to music, is yet to be established for South Africa.
Factors which would enable such a trend, do not only include the availability of music enabled handsets like Nokia, but also require the existence of a reliable network – 3G preferably, (restricted to about 20% of mobile subscriptions in South Africa). However, downloads over 2G connections are still very much possible as evidenced by the millions using services like Nokia Music in other BRICS countries. The ramp up of 3G networks as well as LTE and 4G network roll-outs across the continent, are bound to further increase the trend and the market share for global brands like Apple or Nokia.
Notwithstanding, these two global brands are by no means the only online music service providers, others include Amazon, Google, Microsoft, Spotify, Pandora, Deezer …. the list goes on to include over 500 online music providers worldwide. But, that’s not all, because piracy, one of the major headaches of the music industry, serves up a substantial portion of online music as the NPD Digital Music Survey reported that only 35% of downloaded digital music in 2011 was paid for.
Nevertheless, the industry is fighting back. Limewire has been shutdown. Grooveshark is being sued for billions of dollars and unlike in the US where SOPA (Stop Online Piracy Act) failed to get any traction, in France the Hadopi (Haute Autorité pour la diffusion des œuvres et la protection des droits sur internet) Law has been passed, and has seen the use of P2P drop by a quarter. The IFPI report also claims further successes as ISPs buckle under increasing pressure to withhold or restrict service for those infringing copyright laws via piracy. These initiatives are but minuscule compared to the scale of the problem and some have argued that most of Africa’s digital music consumption is largely in the shadowy and unregulated illegal download zone of peer to peer networks (P2P).
If so it would not be very surprising because long before the digital age, music piracy had been well entrenched in African society via unlicensed recording studios which churned out multiple copies of popular music cassettes and latter day CDs to consumers eager to lay their hands on popular music without the outlay demanded for the authentic copy. In the UK, which ranks 3rd in Digital Music sales after the US (1) and Japan (2), it can be seen by the recent high profile failure of HMV, which went into Administration in January 2013, that the physical music market, unlike that in South Africa, is on the wane.
Globally, mobile consumption of music is via one of two ways. Firstly, downloads from an online music store either à-la-carte or via subscription package such as Nokia Music Unlimited which offers unlimited downloads to users who can download all the music they want OTA (Over The Air) to their phones to keep. Or secondly, music lovers can connect and listen to a streaming service, for example, Nokia Music Mix Radio, which provides free OTA streaming of music and endows users of Nokia handsets with access to a catalogue of about 17 Million tracks bundled into different curated or personalised Mixes.
Coupling such compelling music services with an increased availability of affordable devices optimised for Music in African markets, it’s not difficult to see how with mobile broadband, the South African music scene can be truly transformed. But this transformation would place traditional FM radio stations under a severe pressure to differentiate themselves and remain relevant to their listeners in the face of an ad free, personalize-able and free music service like Nokia Mix Radio or similar. These online music services would add new distribution channels for Local Artists, introduce new ways of discovering new music and artists who can also expect increases in revenue from sales and royalties. Operators would also stand to gain from the increased take up of data plans, which would be welcome as in the face of declines in revenue from traditional voice business, many are struggling to swap their business models from “voice + broadband” to “broadband and voice”.
So change is afoot in the African music market and the traditional modes of purchase and consumption of music are being transformed into digital. While this change would not be overnight, and there’s still room for the music shops and street CD hawkers, the increase in penetration levels of mobile internet, the proliferation of smartphones or smartphone-lite devices, compelling music offerings as well as deployment of operator billing would be the change agents in a continent whose heritage and culture are closely allied to music.