Nigeria’s answer to spotify lures investors from MTN to Jay-Z

The mansion, the pool, the Bentley, the life-size portrait and the gold medallions are the spoils of a revolution in Nigeria and music superstar D’banj is enjoying them.

The 35-year-old used to have to bargain with street-market traders to sell his CDs because there were no formal distribution outlets. Today, MTN Group Ltd., Africa’s biggest mobile-phone operator, and Emirates Telecommunications Corp. sell songs by D’banj and other stars like Davido and 2Face as ringtones and downloads. Now Tidal music streaming service owned by U.S. rapper Jay-Z is interested in the Nigerian market.

“Our consumers can’t get enough of it; you only need to give them a way to get the music,” 35-year-old D’banj, whose real name is Oladapo Daniel Oyebanjo, said at his home in the up-market Lekki neighborhood of Lagos, dressed in a shiny fuchsia shirt. “The telecommunications companies are bridging the gap and they’re raking in billions and billions of naira every year, just from content.”

Thanks to Nigeria’s answer to Spotify and Apple Music, the music industry has seen sales triple in the past five years as mobile downloads surged despite rampant piracy. With at least 550 albums each year, revenue to artists from sales is now worth more than $150 million annually, according to Sam Onyemelukwe, chief executive officer of Lagos-based Entertainment Management Co., partner of Paris-based Trace TV.

Outside of his revenue from Apple Inc.’s iTunes, D’banj said that in the past 18 months he’s earned more than $200,000 from sales in Nigeria. “It’s close to buying me a Ferrari,” he said by the pool at his home, where he has his own recording studio.

More than two-thirds of MTN’s almost 63 million subscribers in Nigeria are using its ringtones service, for as little as 50 naira (25 cents) a song, with downloads on its Music Plus platform growing about 25 percent a year, said Richard Iweanoge, MTN Nigeria’s general manager for consumer marketing.

“We have become the largest distributor of music in Nigeria,” Iweanoge said. “It turned out that Nigerians actually wanted to buy music, they just didn’t have a legal way to acquire it.”

The boom has drawn the attention of Jay-Z, the rapper whose real name is Shawn Carter. “My cousin just moved to Nigeria to discover new talent,” he saidApril 26 on his Twitter account. It was part of his move to make his Tidal music-streaming business “a global company,” he said.

Boosted by satellite television outlets such as Trace TV and MTV Base Africa, a unit ofViacom Inc., many Nigerian musicians have won international acclaim.

“Trace and MTV Base have played a very good part in bringing the artists to the rest of the world,” Onyemelukwe said. “We pay royalties and it brings the viewers to whom we can advertise to gain revenue.”