What you need to know:
- According to Global Music Report 2022, streaming in its entirety—including both paid subscription and advertising-supported—soared by 24.3 percent to reach $16.9b (Shs60.4 trillion) of total global recorded music revenues, Bamuturaki Musinguzi writes.
The global recorded music market grew by 18.5 percent in 2021, with the International Federation of the Phonographic Industry (IFPI) attributing this to burgeoning paid subscription streaming.
Figures released in IFPI’s “Global Music Report 2022 - State of the Industry” put total revenues for 2021 at $25.9b (Shs92.7 trillion). There were 523 million users of paid subscription accounts at the end of 2021, representing a 21.9 per cent ($12.3b or Shs44 trillion) bump.
In fact, streaming in its entirety—including both paid subscription and advertising-supported—soared by 24.3 percent to reach $16.9b (Shs60.4 trillion) or 65.0 percent of total global recorded music revenues.
In addition to streaming revenues, growth was supported by gains in other areas such as physical formats (+16.1 percent) and performance rights (+4.0 percent). The report from the organisation that represents the recorded music industry worldwide also captured the interest of record companies in driving this continuing growth for the broader music ecosystem. These companies are said to use their ubiquitousness to invest in local artistes and genres while supporting either’s development.
In high-potential growth markets across Asia, Latin America and Africa—as well as more mature markets such as Europe and North America—labels are putting down deep roots and helping to foster the continued advancement of vibrant and diverse local music ecosystems.
“Around the world, record companies are engaging at a very local level, to support music cultures and bring on the development of emerging music ecosystems—championing local music and creating the opportunities for it to reach a global audience,” the IFPI chief executive, Ms Frances Moore, says, adding: “As more markets mature, they join with and contribute to the rich, globally interconnected music world.”
Ms Moore says this has squarely made “today’s music market the most competitive in memory.”
She adds that because “fans are enjoying more music than ever”, the upshot has been the creation of “enormous opportunities for artistes”, most specifically those who “partner with a record company.”
“From the metaverse, to in-game content, record companies have invested in the people and the technologies to deliver new, highly interactive experiences—adding to the evolving ways for artistes to make connections with their fans.”
According to the report, Sub-Saharan Africa—split out for the first time in IFPI’s reporting—saw revenue growth of 9.6 percent in 2021, largely driven by streaming. Ad-supported was particularly strong in this region, with revenues from this format growing by 56.4 percent.
Mr David Cecil, the managing director of the Kampala-based digital music distributor East African Records (EAR) told Sunday Monitor: “At the same time, the streaming platforms are finding more ways to monetise streams through advertising.”
Mr Tabu Osusa is the founding director of the Nairobi-based Ketebul Music. He told Sunday Monitor thus: “Due to Covid-19, most musicians were quick to migrate their shows and concerts to online platforms, reaching their audiences at their homes via live streaming.
“In doing so, they created new income-generating platforms, as some of these online acts allow audiences to support the musicians via Pay-Pal contributions. Another possibility was to sell tickets with the use of online access codes that admit ticket holders into the virtual performance.”
The Global Music Report (GMR) has become a critical report that annually assesses the performance of the recorded music business globally. It consequently plays an important role in highlighting the growth and performance of key recorded music revenue streams, the IFPI regional director for Sub-Saharan Africa (SSA), Ms Angela Ndambuki, told Sunday Monitor.
“While other formats, including public performance, were negatively affected by the Covid-19 pandemic lockdowns and curfews, which interrupted a decade of continuous growth, there was a rise in consumption of recorded music in the digital environment,” Ms Ndambuki said, adding: “Covid-19 pandemic, in a way, boosted the digital consumption of recorded music as people sought alternative entertainment following closure of entertainment spots.”
Mr Cecil, however, does not believe that Covid-19-related lockdowns played a part in this growth.
“I think this growth was inevitable, driven by the digital revolution and concurrent proliferation of smartphones. Now, tens of millions of East Africans have a monetised music player in their hands. If anything, Covid-19 may have slightly retarded this growth by limiting purchasing power as the relative slowness of the 2021 growth shows.”
Asked if streaming is really picking up in Kenya, Tabu replied affirmatively: “…this is evident with the number of live streaming studios where performers book sessions to perform and stream their concerts springing up in Nairobi. These studios directly stream shows to mobile devices and computers of audiences wherever they may be.”
“With the prevailing situation, online streaming is here to stay. Most performers will keep on relying on streaming, but of course that will depend on how accessible Internet connectivity will be in Africa,” he added.
Ms Ndambuki reckons streaming has helped Sub-Saharan Africa appreciate “our different music genres.”
She adds: “The fact that major digital service providers (Spotify, YouTube Music, iTunes, BoomPlay, Deezer) have expanded into Sub-Saharan Africa the past few years means the streaming format isn’t only picking up but also has great growth potential.”
Piracy, however, remains a clear and present danger. Ms Ndambuki says it “not only denies artistes their revenue, but also steals from the government in the form of unpaid tax.”
She further reveals: “For instance, in Kenya, between June 2018 and June 2019, there were 62 million visits to piracy sites. And between June 2019 and June 2020, the number went up by 22.1 percent to 75.7 million visits”
Most of these visits resulted in, Ms Ndambuki adds, “web downloading, stream ripping and illegal streaming.” Thankfully, there is some light at the end of the tunnel.
“IFPI is currently partnering with governments in respective Sub-Saharan Africa countries to enhance online content protection and enforcement in a bid to curb online piracy,” Ms Ndambuki reveals.
According to the report, Asia grew by 16.1 percent, with its largest market—Japan—seeing growth of 9.3 percent. Excluding Japan, the region experienced a 24.6 percent climb in revenues. In a continuing trend, Asia also accounted for a significant share of the global physical revenues (49.6 percent).
Australasia experienced growth of 4.1 percent. Australia (+3.4 percent) remained a top 10 market globally, and New Zealand saw a rise in streaming revenues push the overall market to growth of 8.2 percent.
Revenues in Europe—the second-largest recorded music region in the world—grew by 15.4 percent, a steep increase on the prior year’s growth rate of 3.2 percent.
The region’s biggest markets all saw double digit percentage growth: UK (+13.2 percent), Germany (+12.6 percent) and France (+11.8 percent).
Latin America saw growth of 31.2 percent—one of the highest growth rates globally. Streaming accounted for 85.9 percent of the market, one of the highest proportions in any region.
But there was no denying that the pandemic brought with it strong headwinds. In Kenya, Tabu says “by mid-2020 [it] had almost forced the creative and performing arts industry to grind to a halt.”
He adds: “Social distancing and health protocol guidelines saw the closure of most of the performing venues, thus cutting off the main revenue-generating activities of many artistes.”
“Covid-19 was devastating for the live scene, and this impacted all other sectors of the music industry, as artistes’ main source of income dried up,” Cecil reveals, adding: “Some people managed to keep up momentum through regular releases and social media. So Covid definitely helped accelerate the migration to the online marketplace.”
The road ahead…
Ms Ndambuki says thus: “Covid-related social restrictions and lockdowns imposed by most governments in Sub-Saharan Africa and globally resulted in the closure of entertainment joints and restricted sale of alcohol, as well as suspension of in-person events. This meant that artistes couldn’t perform or attend physical events hence loss of income from live, as well as recorded music revenue streams.”
Responses to pandemic-enforced restrictions were unsurprisingly varied.
“In response to the restrictions, performances generally moved to the virtual platforms, including YouTube and social media platforms in the form of virtual festivals and concerts,” Ms Ndambuki reveals, hastening to add: “But these virtual events are dependent on good Internet infrastructure if they are to meet the expectations of fans, and this varies from one context to another. Further, pricing models for online concerts proved tricky in Sub-Saharan Africa.”
As to whether the live music performances in Kenya are picking up now that the Covid-19 restrictions have been eased, Tabu remains circumspect.
“Live performances are slowly picking up, but most venues don’t operate on full capacity since most patrons are still uncomfortable going to spaces that hosts too many people,” he notes.
The picture is vastly different in Uganda as per Cecil. He says of the night economy: “Of course! It’s already started, with tonnes of live shows every weekend again, plus DJs and clubs in Kampala. ...”
Ms Ndambuki remains cautiously optimistic. She says: “I’m optimistic that with the lifting of lockdowns and restrictions, live music performances will gradually return. Early this year Uganda, for instance, lifted Covid-19 restrictions after two years of lockdowns and curfews, and a return to normalcy can already be witnessed. We witness the same in Kenya, and other East African countries – and of course, the larger Sub-Saharan Africa region.”
“More importantly, I do believe that with a sound Covid-19 recovery plan, and due to the glaring fact that we could be witnessing a prolonged period of the pandemic, governments can proactively support the music industry as they’ve done to other sectors,” Ms Ndambuki adds.
“A sustainable solution will be useful for the industry in the long term; one such would be the building of a strong partnership between the government and the industry, as well as with other stakeholders, especially broadcasters, who have continuously consumed music during the pandemic without proper compensation of right holders.
“At a time when right holders are facing a threat from Covid-19, such acts as unlicensed use of their works must be dealt with decisively. Music must be seen; not only as a cultural artefact, but as a business. The investment in music-making must, therefore, be respected and compensated accordingly.”
As to how the high cost of the Internet is affecting the growth of streaming in Kenya, Tabu, says: “The streaming solution only works well for urban-based performers where the infrastructure exists, and is relatively easy to access, but does not apply to those based in peri-urban areas and villages with limited or no access due to the high cost Internet.”
Cecil says were data free, “people would be streaming a lot more.” He believes if “the less affluent people’’ stream more, local artistes would be impacted positively.
“…the high cost of data not only reduces the quantity of streams, but also makes the digital music industry less democratic,” he further notes.
Ndambuki believes “the cost of Internet and mobile data are key to unlocking the potential of the streaming platform in the [sub-Saharan Afria].”
She is, however, disheartened to confess that “Internet access is still expensive in most Sub-Saharan Africa territories” and most importantly that “this means fewer people can consistently access the Internet.”
She adds: “Besides that, Internet speed seems to be far below the global threshold of 10 Mbps, making it difficult to fully realise the benefits of the Internet.”
An improvement in infrastructure that translates to improved Internet access and affordability would, in Ms Ndambuki’s assessment, help actualise and concretise the Africa Continental Free Trade Area.
“Three common cross-cutting challenges to consider in achieving universal Internet access and its benefits which governments in Africa can work towards achieving are Internet and power infrastructure, device and Internet affordability and digital education and awareness,” she notes, concluding: “If governments can leverage on these with clear cut solutions, then digital industries, including music, will experience exponential growth in the coming years.”