Abuchi Ugwu, CEO, Chocolate City, had an exclusive interview with BusinessDay’s SEYI JOHN SALAU, where he touched on the music industry in 2023 and what to expect from the label in 2024. Excerpt:
How would you describe the music industry in 2023?
I feel like it has been a great thing and when I say great I mean it has been a great time to be alive and to be in this industry. Why I say so is that I have been a fan of music from my growing up years and I remember my dad used to have from Ebenezer Obe, and those other records. I used to check out Diko Records and say ‘Oh Fela was signed to this’. Doing my research, I found out all those major record labels were Nigerian but during the military era for one thing or the other, they all packed up and left. So, there is this whole long span of nothing happening; but then with the help of people like Kennis Music and Co, they came back and PrimeTime was happening. They recreated the music industry again.
I have just been managing MI for a decade and half. Just being in the music space, I have seen that industry where at that time for you to even get music, you have to give them the music to pirate it. Then it got to a point where Alaba was paying a few people – oh, you are very hot, we have to pay you; but the rest of the people have to pay us to put their music on CD. At that time, I think the biggest artiste were 2face, PSquare or Timaya and I know the biggest money that people make per CD (project); a whole album is like N20 million. Alaba will give you N4 per CD they sell, that is even if they pay you royalty, and that N4, you don’t even know how many CDs they sell. Abu Obaino will tell you we sold 20,000 CDs, and you will feel like they did well. But when they go to Somolu, you don’t know how many they have printed because they could have printed in the morning and at night – you don’t know how many they printed overnight. When MP3 came out with those drivers going to the East – they would go with N200 and then they would give them a thousand songs. I have seen that happen. But now there is a new birth where people can stream. So, an artiste does not need to take his CD to be pirated. Once he drops a song, he streams the music from Nigeria and you make 2 cents to a dollar or so. If you stream in the UK or U.S it is higher than Nigeria. But now we are in a time where artistes can make money in real-time. I know some artistes that make in a day what 2face’s whole album has made. It is not that their music is better than that old music, it is just a time where technology has given people opportunities to earn from their living. So, for me I think it is a great feeling to see songs like CK make billions and you can make the money real time because you can see someone like Rema doing that number. You can see people like Burna Boy, you can see Wizkid. So, people now are making real time money. If we properly manage well in the next one year, sooner than we think we will be fighting with the oil people because money is made in real time. Before now, you have to meet people to say this is what I am selling. Now, once you have one master, you can copy the master into a billion and it is just there so I think it is a great time to be in the music industry and I feel like there is the low and there is the high and I think it is great. There is a trend I have observed at the end of the year, concerts are not as packed as they were last year. I feel like there is a sort of customer fatigue going on and with disposable income, people don’t just have a lot of money to spend so all those things are affecting us, but in general, I think it is a great time to be alive in this music business.
You have been quiet of late. What is happening?
It is not that we have been quiet. We took a different strategy. We had the first artiste on Chocolate City that was Jeremiah. He had one of the biggest albums then after that we had M I, then we had Ice Prince, then we had Jesse, then we had Dice and then we had Coker. So, what happened at a point was that Chocolate City took a backstep branding-wise and said we would put the artistes forward because a lot of people didn’t know that CK’s Love Nwantinti is a Chocolate City song and that it was one of the biggest songs in the world. So, when you say Chocolate City has been quiet; Chocolate City took a back seat. We became more like a big brother pushing more brands. We have always been in the conversation but for the past three years, we took a back seat to push the talents forward. Now, we are more present with the brand because things are changing now. Before, the goal of Chocolate City was to be like the majors. For example, people don’t know that Wizkid is signed to Sony Music. Davido signed to Sony Music but you don’t see Sony up there. And for us when you are talking about business in Nigeria you just have to start planning your succession like a 5-year plan, a 10-year plan. You have to understand because we are like older brothers apart from Kennis who have been here for a long time. I think we have to pay attention to trends; we have to pay attention to know that at this point, you can’t shout like the other people are shouting. Your strategy is different. Now you are like the big brother playing in this space and as much as you want to shout, you must make sure that you don’t lose the core of who you are. So, most of the time basically we are more about the strategy and now we are changing the strategy and now you can see that Chocolate City, Young John and Black Bone are on the forefront. It is just understanding of time and strategy and I think when you look at Chocolate City, we have been consistent over the years.
Can you retweak the strategy to support new signees like Noon Dave to grow in the industry?
Yeah I think it is hand in hand. To give you a good example, when I signed Noon Dave, I was trying a new strategy. For the past three years there has been an argument in the industry where they say talent alone doesn’t work anymore and for one to be in the industry, he or she must be loud. One of the reasons we signed Noon Dave was that he had about 1000 followers on Twitter or Instagram and we keep on growing. Now he has about 50,000 followers. So, the growth has been about 5000 times. But because of how most people use the pop measuring stick and they feel that he is not growing but he is growing at the rate in which we want him to grow and for him we are trying to build somebody that can be like Justin Bieber. If you hear him (Noon Dave), he plays guitar, keyboard, and he sings very well. He went to the same song writer school that Asa went to. He is a musician. So, by this year, what we do as part of our in-house is when we sign an artiste, it is not about music. We try to teach them the 360 of the music business. So, he is going through those classes. This year, you will see more of Noon Dave. You will see more of the younger ones, including two people we signed at the same time. We signed Noon Dave the same time as Young John with two different strategies. Young John is like giving them fire for fire and then we are grooming the other set. So, moving forward in this New Year, the goal will be Young John, Black Bone focus internationally more and then Noon Dave and the others would focus locally.
Apart from Afrobeats and pop, how are you paying attention to other genres?
I have been telling people for the past two years that Africa is more than Afrobeats. One of the drummers that play for Fela is a Jazz artist and is Nigerian. This is a Nigerian that has played across the world and that understands. When you come to rap, we are huge; I believe that MI or Black Bone can go head-to-head with any rapper in the world. I believe that when you talk about singing there are others. Tiwa that can go head to head with any singer but I feel like Afrobeats is a blessing and a curse because we are growing so far that they will be like hey everybody just come and box yourself here – fight yourself in these Afrobeats. But, we need to get to a point where we know that it is more than Afrobeats. Once we have the Afrobeats chart, we need to now start entering the Pop chart and say hey the hip pop chart link is there let’s have Black Bone there. That’s when we compete because when you think about it, when you think about technology, there is no App Store to say let us create an App Store for Nigerians because Nigerians are doing well so call it an Afro platform for tech. No. For us, we have to strive and say we just want to do good music. To be sincere, Afrobeats are great but we are bigger than Afrobeats. I was watching the Grammy the other day and I saw reggae or dancehall. The best dancehall artists are white and American and for me I don’t understand. So, let’s level the playing field and that’s what the internet has done.
Let’s get down to you being the CEO of Chocolate City; what will you say is your leadership and philosophy?
I travel on three pillars: people, technology, process. The number one is people. People are people. People are like the materials. Those are the key ingredients that you need. At the same time you have to understand people and the younger people are Gen Zs. When I was going to work growing up I should know I will work if I like or if I don’t like but these younger people don’t care. Then you have to create a means you can help them because sometimes they just want to work on their best. They believe they are better than you but it is like how do I create technology to help you and them and then how do I create the process so they understand that this is our goal and our goal is to create a creative haven for people. So if you are singing your rap, we want to be that creative haven for you to corporate to create value for you and every stakeholder. So, when I break down how I run, it is like I try to talk to every department. When I took over, I broke the departments down and I rebuilt and I always tell people that the first principle in Physics is to break down, how can I do this better? So, from the start, I broke it down and said how can I do this better. From the marketing side I broke it down and said, how can I rebuild, from the sales side broke it down and said how can I rebuild. Now people don’t sell CDs anymore. We have about 40 radio stations. How do I make sure I am on the 40 radio stations for marketing? Is it a billboard? What is my conversion rate? So, at the end of the year it is like you break down and say let’s get better at each department by one percent. When we get better at each department then you add the percentage and we have improved over 50. So, that is the strategy for me, mostly the people, the process and technology.
Have the three pillars helped Chocolate City’s adoption to digital and marketing strategies?
My tenure at Chocolate City has come with remarkable growth. Now you talk about Blaqbonez, he is head-on-head with some of the biggest names in the industry; then you talk about Young John, he is ahead. You talk about the back catalogues we have, all of them are spiking up, and with all the metrics you can see, we are making progress, and we just started. The first two years for me, based on the strategies I shared with the board, were to play defence and stabilise the field. Now, we are going into the next phase in which we are going to attack. So, the first phase of the second is we want to compete, and the next phase for me is that we want to control market share. So, in 2024, we are going for market share. Huge market share.
Do you think that you are positioned enough for that?
Oh, yeah we are.
Are there other factors that contributed to the success story?
I think I will start by giving credit to people like Audu Maikori, Paul Okeugo, and Yahaya Maikori who started the business. They are the first CEOs. Then other people that ran it before me. Then MI was the CEO before Paul and Audu and then I took over. MI ran it for five years. I feel like everybody has their part to play. So, it is not my success alone. Everybody had their part to play. In business, timing is everything. You have to know the timing to know the right strategy to use because sometimes it is like you might have everything but without the right strategy it won’t work because in the same business, some people have lost billions in this same time that we are. Music business is high risk and high reward. It is one of those businesses that the structure is not fully developed. So, for example, the music business is more like tech where you invest 10 and just 2 might work while others will not work. So, we keep on building the system so hopefully one day we will create the structure and the system that would be easy.
How has government policy affected the music industry and what changes would you like to see going forward?
I feel like number one is knowledge and I keep on saying this and people laugh at me. I remember talking to my dad and he was asking me what do you do and I tried to explain to him why I do music. He was like, ‘do you sing?’ I was like ‘no’. ‘Do you play instruments’ I said no or do you print the CDs then I was like no and he did not understand. This is a problem because most people of that era don’t understand how music has transformed. Let me break it down to you. For example, like the laws that protect copyright, what is the law saying about copying? Nigerian music is one of the most indiscipline everywhere in the world. What is happening to those conversations? What is the system because once we monitor that, that’s a huge revenue Nigeria can generate. But they are not thinking about that here. I believe if people talk about it, there will be white papers and seminars; but people don’t understand how it works. The first step is just to understand how it works. Let’s learn then we can sell. Second is the will. Government needs to understand the will. How do I invest?
I know the new minister of creative economy and I knew some of her advisers; smart people, but at the same time how do we go to the real people that make things happen? In Nigeria we are about 200 and something million people 70 percent are below the age of 30 so we are a very young population. These young people have so much energy. Music is one thing that can tame energy down. Music is one thing that can make people calm. To give you a good example, I remember I was in a conference and Ambode was doing Lagos count down – the robbery and the crime rate was close to zero because everybody was there. So, everybody was having a good time and everybody was calm. People need to understand that we need to use music as a tool to sell our culture. Music is the best way. One of our greatest exports is our music. Have you seen the shows Wizkid has been doing? Have you seen Burna Boy? Imagine burna boy showed up on stage and he shows up with a Nigeria flag. Imagine how much that flag will be googled in time and I was telling people before I came of age that the the first thing I always wanted was to go to America. Why? It is because all their movies inspire me and the way they protect America. I believe that America is the best nation because of what Hollywood told me. How do we communicate? The first thing is the government has to learn and understand how this thing works. Then the second thing is saying how do we sell this culture. The third part is sometimes you don’t need to regulate an industry because you don’t understand the industry. When you don’t understand the industry, how do you want to use it? I’ll say that in America, even radio stations have log sheets. If they make it mandatory that every radio station in Nigeria must have a log sheet and just pay N1 per song you play. If you aggregate all the songs you play in a year that would change the industry. We can create a huge fund but we are not doing that. What happens is that during the election, every politician looks for the artist that is reigning to come and sing for them or when they want to talk to younger people they look for the artist and then they finish and go. For example, if I use House of Blues in America, they have about 21 venues. The smaller venue for 1000 to 3000 people. And what they use is concerts. Have you observed that we have never experienced this music we have because we don’t even have the infrastructure to support people to go on tour. We need to learn the process and try to let the industry run. In the learning for example I remember telling someone when we were having challenges that I reached out to a bank and said I need overdraft to fund music and they be like ‘do you have collateral? Do you have a house?’ But in America, with your intellectual property they can rent or invest billions on you but here they are not interested. Those are things that the government and those people in authority need to pay attention to and then understand that this is a business. We need revenue to solve our GDP problem. If you have time just do the maths and see how much Wizkid has generated, how much has Davido generated. Take time to check Afro beats artists to say how much they have generated in the past one year in dollars. The sad truth about it is that that money doesn’t even come to Nigeria; the money goes globally to their record label. By the time the money trickles down to the artist, the car companies in America even get money before the remaining ones come back to Nigeria. When it should come to Nigeria first; when it gets to Nigeria it adds to the GDP, it adds to the Central Bank.
Do you also see the appointment of ministers and commissioners as a challenge in the sector?
I do agree because I remember we had a case in court one time and the judge was like, I think the case was against one of the artists like the artist wasn’t delivering. He didn’t keep to his commitment and the judge was like, “That is not what you guys do; you people just smoke and I was like,” No sir. This is an industry that is worth billions but because there is already a bias and in all fairness to him, there are a few bad eggs. In fairness to him, he doesn’t understand the business. Infact now, when I tell people that Young John and Shalli Popi make 15 million per show, they are like for what but they have the demand. For you, like a normal person, you have to say people have to sell advertisements but these people are making it per time. How do we enhance these guys to make more and then they pay more taxes? How do we enhance them to say okay let’s create a touring structure and say they will do more in Nigeria but they have to pay taxes? How do we bring them and fight this whole cause because invitation is the big issue because children care about success. How do we use them? First of all I think we have to appoint people that understand what this thing is about. In fairness to the government I always tell them and tell people that even as the first stakeholder, you people have to be involved. Most of us chose not to be involved and then when we are not involved and they give us, we complain. The first thing is that we have to get into the room and get into those places where they are making those decisions. We have to be like we are all stakeholders. We have to get involved and say this is our industry, this is what the policy is, and this is how we work -let’s join hands and make it work.
How do you see Chocolate City in another five years?
I always tell people I went to about a 7-storey building in Chicago and what they do is sell coffee. I remember the first day I went there I was in shock but then when I started doing research about it, I realised that Starbucks wallet has one of the biggest capital. It is bigger than a lot of banks but what they have is communities of people who just love coffee and when they buy they keep their change and when you add up their changes is more than the banks’ capital. So, for me the long term goal is that we want to create a creative haven where people can come and create value for themselves and create value for every stakeholder involved. When I look at Young John’s story, when I look at Black Bone’s story, when I see where they are coming from because in the normal world they can’t make it because they have to go to school and do this. When I see where they are coming from and what they are like, I want to scale this to such a way that we are doing that for 20, 40 artists. We want to be that company that can fund the creative industry project. We want to be those companies that in the next 10 years we own our own centers like if you go to New York. We want to invest in infrastructure. We want to be big. The mid-term plan, I have said that earlier, we want to compete this year, next year for market share and in doing so the goal for us ultimately is that we want to make the industry better than we met it. We want to create a very important place of value for the artist and people that invest there, from the song writer, the sound engineer to the producer, every day. We want to create value and then create the standards so the next generations when they come don’t go through what we have been through.
Are there ongoing talks on collaboration?
Oh, I think number one is legal. What we do is that we sell intellectual properties mainly so we and the legal need to be 5&6. We have been talking with the banks because I always tell people someone like Burna Boy’s last project talk of $5 million. That is about N5 billion for one project and that’s what we see and those people fund 40 projects a year or 100 projects. If you see what their inflow is like. For us to get to that level, the banks will be involved. We need people who understand finances to be able to take it to the next level. We need people that understand the risk involved. I think what we need is a general stakeholder involvement and having conversations with the CEOs of other majors, music business and even the younger ones. We are all having that conversation to say how do we build this. Very important for me, I always tell them, we are building this business not to be gatekeepers but to solidify this whole thing we have now so the next generation can benefit from it.
What should we expect from Chocolate City in the first quarter 2024?
Oh a lot. We are looking at new music. This year we are going to make at least 8 albums. We are going to do more tours. We are going to host a conference. We were 20 years old last year. This year, we are going to celebrate big. We are going to celebrate Afrobeat big. We have an Academy where we give back to people and out of what I’m really passionate about is how to grow people. I am not even talking about the artist himself. When you look at one artist, an artist should have a manager, an artist should have a lawyer, an artist should have a doctor that tells him what to do and what not to do, an artist should have an insurance broker to make plans for him in future, and an artist should have an investor. If you start up people like a general manager at a bank, it takes him 10 to 20 years to start making N10 million a month but as an artist, he could start marking 1k this week and next week start making N200,000 in a year you start making N5 million. So, the growth is so fast that what they start doing now is that they are buying jewellery worth a million dollars without thinking about a proper investment plan. Like the only industry that makes so much money and we don’t invest back in the industry. We invest instead in other industries. So, next year I am going to do an academy where we talk about that, we equip people. Where we have few grants we are going to give just to empower people in the creative sector because the creative sector needs it. You can have a million dollar plan but because most people don’t know how to communicate to get what they want. So, we are going to do more of that and the goal is just to make the industry better than we met it.
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