Nigeria’s economy loses as foreign labels secure Afrobeats rights

In June 2023, Burna Boy became the first African artist to headline a stadium show in the United Kingdom. The stadium was sold out with a crowd of 60,000 fans screaming in adulation to the Grammy award-winner’s Afrobeats lyrics. As the crowd chorused to some of the hit tracks of the artist, behind the curtain, the UK government, sponsors, and foreign labels representing the star of the show would be calculating the windfall from the concert.

It is estimated that Burna Boy added as much as N2 billion to the economy of the UK with ticket sales starting at $94.41 and going up to $327.25 each. This is aside from sponsorship from big companies such as American Express, which secured exclusive rights to ticket sales and many others whose deals would be taxed by the UK government.

On July 8, Burna Boy also packed out the US Citi Field stadium with a capacity of 41,000 people and became the first-ever African to sell out a stadium show in the United States. On average, City Field tickets cost $180 but prices may vary, depending on the event. At that average ticket cost, the event would have raked in an estimated N5.66 billion for the economy, again, aside from the sponsorship deals. Like the UK, the US government’s gains as tax from ticket sales would benefit the economy.

The Nigerian economy would get mostly crumbs in terms of Burna Boy’s revenue from the shows. The most that accrue to Nigeria include the fame and visibility that come with being the artist’s birthplace. Nigerian local music labels are also cut off from the windfall.

Ayodeji Balogun, known by his stage name Wizkid, is another Afrobeats artist packing out venues in London and the United States. He is scheduled to perform at the Tottenham Stadium on July 29, 2023. Ticket sales are going from $238.02 to $469. Music watchers are betting on the showing being sold out as well, adding a lot more to the UK economy.

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Burna Boy has several deals with mainly foreign music labels. He is signed to Atlantic Records in the US and Warner Music Group internationally. He signed a music publishing deal estimated at $1 million with Universal Music Group (UMG) in 2018. In 2021, he signed a royalty collection deal with Kobalt Neighbouring Rights, a subsidiary of Sony Music, offering him a full range of royalty collection rights as well as earnings maximisation services on a global scale.

“What if he sold out 40,000 (capacity) stadiums in Nigeria?” said Ayokunumi Isaac, a history and culture promoter. “Think about it for a second, you’ll realise we’re losing so much as a productive nation. In the early days, Afrobeats lacked institutional funding, now the world wants to explore our sound and we are not putting any guardrails in place.”

Afrobeats is fast becoming Nigeria’s number one biggest export, as artists from the country headline big stages and pack out some of the biggest venues around the world. According to data from PwC, the Nigerian music industry is currently estimated at $19 billion in valuation. Afrobeats contributes a sizeable chunk of this valuation.

As their songs become natural on the lips of millions of fans around the world, foreign collaborations are pouring in, further establishing their popularity in the global music scene. For example, Nigerian Afrobeats star, Rema’s ‘Calm Down’ remix with US star Selena Gomez, was ranked number one on the top 10 Afrobeats songs of all time on Spotify. At No.3 is CKay’s ‘Love Nwantiti’ remix with DJ Yo! and AX’EL.

Just as Burna Boy has secured his music future with foreign labels, so have nearly all the top Afrobeats stars in Nigeria. Wizkid in 2017 signed a multi-album worldwide deal with RCA Records/Sony Music International. Davido, who is also signed to Sony Music, was the first Nigerian to be signed to an international label. CKay is signed to Warner Music South African and Atlantic Records while Tiwa Savage is signed to Universal Music Group (UMG).

Chidi Okeke, founder and CEO of Groove Platforms, said the main challenge with having most of the A-list Afrobeats artists signed to foreign labels is the difficulty local labels and event companies have in curing their services. The artists become too expensive for the Nigerian market, not necessarily because the artists are demanding more money, but because the labels that manage them now set the price and determine where their music is heard.

Okeke highlights the cultural impact of the problem. According to him, the more Nigerian Afrobeat talents are pushed around global stages their stories begin to change and because they need to appeal to global audiences the content of their lyrics also changes. The African stories are depreciated.

“The biggest challenge I have now is that the biggest platforms think we don’t have the right to tell our story,” Okeke said.

His streaming platform uduX is one of the few surviving local streaming platforms still popular among the top Afrobeats artists. Davido’s concert at the O2 Arena, London, was streamed to a global audience from the uduX platform.

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Ayoola Sadare, CEO of Inspiro Production and Festival Director, Lagos International Jazz Festival and The Global Afrobeats Kulture Festival, describes it as a loss of diversity and authenticity as the artists may be pressured by the labels to conform to international trends, thus abandoning their uniqueness in cultural and musical styles.

“Furthermore, there may be a decrease in local promotion and their support may decrease as a local talent development initiative might receive less attention and investment limiting its growth and sustainability,” Sadare said. “In some cases, if due diligence is not properly done, artists may feel exploited to lose ownership of their music rights due to unfavourable contractual terms leading to them having less control over their artistic expression and financial well-being. It also becomes more challenging for local labels to sign and retain talented artists, as they may not be able to match the financial and promotional resources offered by foreign labels potentially limiting the growth and sustainability of local Nigerian labels.”

Sadare said the Nigerian economy can benefit from international exposure of these artists by the record labels. For example, there is the advantage of tapping into a global audience. This can translate into increased demand for more demand for Nigerian music, merchandise, and concert tours which in turn, generate revenue and create job opportunities within the local music ecosystem. It could also lead to an exchange of skills and expertise as these collaborations expose Nigerian artists to new production values that can help local talents improve their craft and enhance their professional capabilities, thereby strengthening the overall music industry in Nigeria.

“Another one of the major concerns associated with these artists signing with foreign labels is the potential brain drain effect that can result in a loss of creative resources and cultural capital for the local music scene. So, while signing with foreign labels can bring financial benefits to individual artists, it may not always lead to equitable distribution of wealth within the local music ecosystem with the argument that foreign labels may exploit Nigerian talents by taking a significant share of their earnings, leaving artists with a smaller portion of the revenue generated,” Sadare said.

Okeke said some of the artists will bill local music companies in foreign currencies, which often makes it difficult to leverage the popularity of the Afrobeats artists to grow the local industry.

“We have to find a smart way to innovate and get them to come on your platform. That led us to now start investing in growing the next big stars. We have so much talent here and our plan is to tell their stories,” Okeke said.