The revenue from recorded music in Nigeria has been projected to hit $50 million (N18 billion) by 2020, a 34 per cent increase from the $33 million revenue in 2015; N11.8 billion using the current exchange rate of 360. This growth was captured in the “Nigerian Recorded Music Industry Report (2015 – 2020)”, recently published by the Disruptive Creative Economy Meeting (DCEM) group, which describes it as the first detailed industry report.
According to the report, the Nigerian recorded music industry is poised to spike in growth significantly over the next 3-5 years. As mobile and internet penetration continues to deepen, coupled with a steady growth in the purchasing power of larger proportion of the population, consumption of entertainment products will only increase.
Also, as internet access becomes more pervasive – thereby increasing the proliferation of service providers – competition in service supply, as well as more “bundling”/zero-rating of entertainment products, will result in a decrease in the effective cost of data. This would mean subscribers having more money to spend on entertainment products such as music and video.
The report draws a direct nexus between a thriving telecommunication industry where costs of services are cheap, and the possibilities for increased revenue in the music industry. The Caller Ring Back Tone/Ringtone (CBRT/RT) service and Streaming both account for between 66 per cent and 85 per cent of revenue between 2015 and 2018. The contribution of both sources is projected to increase even further in the coming years, with digital sources considered to offer more data and transparency of how much has been earned by content producers.
Olumide Mustapha, lead researcher and founder of Technolawgical Partners, which authored the report, noted “Data, or a lack thereof, is one of the biggest criticisms against the Nigerian music industry. Its traditional sources of investment – being for the most part informal and unstructured – have meant that the industry has, for the most part, not been held to the same standards as other industries. However, such informal structures can only take the industry so far.”
According to Mustapha, increasing (domestic and foreign) recognition of, and interest in, the potentials for the Nigerian music business has necessitated the requirement for more data about same. This information is crucial for the industry to attract and secure the necessary investments to stimulate its next stage of growth.
The report also indicates that Nigeria’s recording music market has been showing steady growth over the last five years primarily driven by a boom in mobile Value-Added Service (VAS), sales of music as Caller Ring Back Tones/Ringtones (CRBT/RT) and downloads. This transformed the market both in terms of music consumption as well as how revenues are accounted for – due to the transparency afforded by such digital channels of distribution. This transparency (or lack thereof) is one of the primary hindrances preventing major growth in the industry as a result of the lack of verifiable means of accounting for collected revenues from sales.
In a market of around 30 million VAS subscribers across all networks spending an average of N300 each per year – which equates to a potential market value of circa N9 billion per year for this sub segment alone – the music VAS market is still a major source of revenues for content owners.
“For the longest time, we have operated as an industry from a place of floating knowledge about the data or statistics in the industry. The average entertainment practitioner gives you an estimate figure. DCEM seeks to change that narrative by ensuring a timely and robust report to service the industry,” said Fawehinmi Oyinkansola, contributory researcher and managing partner of Technolawgical Partners.
Fawehinmi described DCEM as an exciting social entrepreneurship project of Digital Music Commerce and Exchange Limited, positioned to professionally educate the public on the nitty gritty of the Entertainment business. The Disruptive Creative Economy Meeting group (DCEM), is a collective of specialized professionals in this sector (including lawyers, accountants and business advisors) that has been undergoing active research for the past 18 months in order to bridge the data gap.
The DCEM Nigerian Recorded Music Industry Report is intended to be an annual publication with data being reviewed and updated on a quarterly basis, according to Mustapha.
CALEB OJEWALE
