Digital music downloads revenue hits $20m monthly

Digital music downloads in Nigeria have become the fastest and most resilient revenue source for local musicians, with revenues from the segment now estimated at between $US15 million and $US20 million monthly. This amounts to between US$180 million and US$240 million annually, according to Sam Onyemelukwe, managing director, Trace EMC Limited.

This comes to between N54.9billion and N73.2 billion annually, based on an average official exchange rate of N305 to the US$.
Top artistes and earners from music downloads and streaming include Tecno, Olamide, Wizkid and Davido, Onyemelukwe said.
Though digital music downloads is still a small part of Nigeria entertainment industry, which a 2015 Pricewaterhouse Coopers (PwC) report estimates as worth $US4 billion in 2014 it is expected to double in size to US$8.1 billion by 2019.
In an exclusive interview at The Brook, BuisnessDay’s corporate office in GRA, Apapa, Lagos, on Tuesday, Onyemelukwe, said that about 80 percent of music downloads in the country are the works of Nigerian artistes and are done primarily on mobile networks.
Onyemelukwe disclosed that telecommunication companies lead others in the music download and streaming business in the country, with MTN controlling about 35 percent of total market share with its MTN Music Plus, while Apples iTunes leads other non-telecommunication platforms.
Besides the telecommunication companies, Onyemelukwe said that music by Nigerian artiste is also downloaded and streamed on other platforms, such as iTunes, Spinlet, Spotify and Apple Music among others, though the market share of these other platforms is comparatively small.
Onyemelukwe, who used the interview platform to announce the launching of Trace Naija, a new Nigerian music channel, to be broadcast in 26 countries, said that the music downloads and streaming space is opening up new streams of income for Nigerian artistes who hitherto were frustrated by piracy.
He expressed confidence in the growth of the music downloads segment and observed that the entertainment industry is a little bit recession-proof.
Also speaking on the importance of music downloads and streaming as a growing revenue segment for telecommunication companies, Richard Iweanoge, general manager, Consumer Marketing, MTN Nigeria, observed that MTN became the largest distributor of music in Nigeria through its highly subscribed ring back tones (RBT) popularly known as “caller tunes” which was launched in 2008 as a revenue stream for the company.
Iweanoge said technology has taken the place of traditional modes of music distribution, which involved bulk sales of CD’s followed by huge complaints of piracy. MTN’s ringtone download service is used by more than two-thirds of MTN’s 63 million subscribers, as estimated by Bloomberg, and has met the needs of Nigerians who love to buy music.
Nigerians find it cheap to download songs of their favourite artiste for as low as N50 and the company has recorded 25 percent growth every year, said Iweanoge.
Discovering the new and secure source of income, the music download space has become, some Nigerian artistes are selling their songs to major digital music distributors, especially MTN, iTunes and Spinlet and making huge revenue from it.
Popular musician, Dbanj, is estimated to have earned more than $200,000 in the last 18 months, outside his revenue from Apple Inc.’s iTunes.
Ademola Ogundele, co-owner and CEO, NotJustOk.com, a popular Nigerian music site, said Nigerian artistes are now more informed on how the growing digital environment can curb piracy, positively impact their earnings and boost their popularity.
But Mark Okeji, an entertainment promoter, explained that the evolution and widespread use of smartphones and access to broadband, 3G and 4G have fueled the migration from the traditional distribution platforms to the new landscape provided by digital space for easy and cheap downloads and streaming. Okeji forecasts that music downloads would keep growing, as long as it is an easy, cheaper and sustainable way to distribute music.
“With digital downloads, you do not need to fight the pirates at Alaba International Market. All that musicians need to do, is to sell the rights to digital distributors and make their money without stress. I look forward to a day that Nollywood will migrate to such a digital distribution space which would finally nail piracy in Nigeria”, Okeji said.
Experts say the growth of smartphones and access to broadband would result in digital’s share of total spending on recorded music in Africa rising to 67 percent by 2017 with over 80 percent of the music bought in Africa expected to be African music.