Africa

Cracking Digital Music in Nigeria

/ Scribe of the Tword / 4 Comments

One of the courses I treated with the greatest disdain in University was GES 101. I can’t  remember the official title of the course now but I do remember that one of the topics was language and how culture and technology affect language. This has been proved true and become more evident as we march forcefully on into the 21st century.  Until about 5 years ago, tablets were medicine, tweets were onomatopoeic sounds, swiping meant stealing and streaming was something only a river or estuary did. The secondary (?) meanings that all these words and many more have acquired, one could argue, are actually close to achieving primary status now.

 

The advances in technology have presented new challenges for distributors of entertainment content. The market is swinging firmly away from scheduled to content to “on demand” or “a la carte”, where the user/consumer merely pays for access and is thereafter able to determine the order in which he will watch or listen to the content.  The consumer could also decide to purchase the content outright, and with purchase comes the ability to move content between storage devices. Delivering content in this manner will require the consumer to have enough space to store his content library. Thus, advances in digital broadcast have also been accompanied by exponential growth in storage technology.

 

A result of all this progress is that while my dad still has a collection of vinyl records occupying roughly twenty cubic feet of space somewhere in my late grandmother’s house, I can carry infinitely larger amounts of music around on a device no larger than my palm. This is good for the honest consumer but it makes piracy a whole lot easier.

 

Forgive me for being Captain Obvious so far, but a context needed to be set.

 

Piracy – in this context, the unauthorised distribution or selling copies of music – has always been with us and will probably always be with us. The problem is worse in many African countries, including Nigeria, where the government’s anti-piracy efforts are extremely feeble where they exist at all. Today, anyone can be a pirate, as is evident with so-called “offline downloads” being the primary concern of many labels and artistes in Nigeria.

 

“Offline downloads” is the copying that goes on, frequently for paltry sums, from laptops or external hard drives to USB storage devices. It has been reported that the “content aggregators” (with sincere apologies to legitimate content aggregators) charge as little as one naira per track copied.  With more and more cars and even portable radios coming with auxiliary USB audio sockets, one can see why members of the Copyright Society of Nigeria (COSON) are alarmed.

 

The Nigerian industry is also peculiar in the way its revenue stream works. Piracy killed record sales decades ago. The industry tried to solve this problem by selling record masters to distributors at the major piracy centres (tragically ironic, right?). Even at that, many emerging artistes are willing to give their music away for free on popular blogs and websites in return, hopefully, for exposure and recognition, which ought to translate into touring and performing income.

 

Thus, music is largely freely available on both the supply and demand sides of the music equilibrium. How then can digital translate to money for the local, large-scale distributors?

 

The challenge before Iroking and Spinlet, Nigeria’s two main digital distributors – the companies adopting the Spotify/Deezer models of monetising content – is to convince a large enough number of people to agree that paying for music is worthwhile.  In a country of 160 million people with a median age of 19, the market is certainly there. Potentially.  However, even Spotify, with its 24 million users (6 million of whom are paying subscribers) is yet to turn a profit, in its 7th year of operation. iTunes, it is claimed, is running barely above break-even (another great infographic here for dataheads), though Deezer claims to be profitable.

 

These companies exist in countries with mature copyright enforcement systems, where music royalties have been a dependable source of livelihood since forever. This means that there already exists a culture for paying for music. In spite of this, however, musicians are complaining that the revenue from streaming isn’t anything to get excited about. According to Zoe Keating (crossover classical musician) these are the different streaming rates that various distributors offered her (very useful table, actually). So, if neither the streamers nor the streamed are making money (though this point is heavily disputed), what’s the point of this business model? What will the point of this business model be in Africa, in Nigeria?

 

To understand profitability in the business, one must first understand how the service is priced. Most digital music distributors, in addition to outright sales, have a free (advert-supported) service, a limited subscription service (ad-free, but limited number of streams), and a premium subscription service (ad-free, unlimited streams). Therefore, first of all, the difference between outright sales and streams must be taken into account.

 

A physical CD in Nigeria is usually priced between N150 and N1,500 (not counting “deluxe” editions).  This pricing model can easily be adopted for digital sales. A stream, on the other hand, occurs when a track (not downloaded) is listened to for at least 30 seconds. The minimum listening period varies (some agreements say 45 seconds) but the first problem streaming has is how you quantify a listen. Do you randomly estimate how many listens can be extracted from a CD before it becomes unplayable? If a 9-track album costs N150, this equates to about N16 to “own” each track for life. How many times should a streamer be able to listen to a track before his use translates to N16 for the artist? Is this even the metric that distributors and artists/collecting societies use?

 

Speaking of collecting societies, one must commend COSON and the efforts they have made thus far in ensuring that music makers receive royalties for the use of their music. It is not clear however, whether they will function as an aggregator in respect of their dealings with digital distributors. Their primary revenue targets to date have been radio and tv stations, hotels, events venues, etc. and this category of people should rightly pay COSON a licence fee. However, should an Iroking or a Spinlet pay COSON a licence fee, given that each artist enters into a licensing agreement with the digital distributors? If yes, would that not effectively be double licensing, as the artists will collect under their individual licensing agreements, regardless of whatever fee COSON extracts. More importantly, was it the intention of the artists when joining COSON that the collecting society would take over all licensing activity? These are the issues that will need to be clarified as digital music expands in Nigeria.

 

The Value Added Service (VAS) companies that collaborate with telcos to sell ring-back and call-back tones are currently the silent winners in this quest to monetise digital music. Personally, I would never willingly activate a ring-back tone but I am a single subscriber in a pool expected to surpass 128million by 2014. The VAS market in Nigeria is currently valued at over N78.5bn and “may actually be moving towards $1bn in the next three years” .

 

In addition  to all that’s been said here, artists should consider ditching the “listen for free” model and start steering their fans towards platforms where listening generates them money. This may mean starving the blogs of some content and some blogs therefore going rogue and becoming pirate broadcasters (lawsuits, yaaay!!) but if physical sales are dead, then digital must reward maximally.

As for who will win the race to crack digital music in Nigeria, Iroking and Spinlet need to take on and subdue Deezer and Amazon first and hope that Spotify doesn’t decide to expand its operations to Nigeria before then. The catalogue is everything!

 

 

 

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(IL)LITERACY IN LEADERSHIP

/ Scribe of the Tword / 1 Comment

 

The Nigerian quest for leadership continues and, unfortunately for progressives, zoning and entitlement to others standing down so that a particular region can enjoy its turn to produce the next president is the current preoccupation of the ruling elite and the chasing pack. The pro-zoning argument is mostly that it corrects marginalisation and encourages “a feeling of belonging”. As there is a gaping lack of evidence that any region has benefitted from being the sitting president’s home-region, one must question what exactly those who protest it are being marginalised from?

 

The North (I use these geo-political groupings only very nominally) has produced the majority of the country’s heads of government post-Independence. The consensus is however that it is largely the region lacking the most in infrastructure, education and several other key development indices. The South-West had its own turn but no one can point to the exclusive benefit this conferred on the region during those eight years. The incumbent is from the South-South and it would also be hard to point to anything that has accrued to that region specifically. What then can the accusation of marginalisation be in reference to, if the regions do not enjoy special benefits for producing the president? This zoning argument also scales down to politics at the state level, where the governorship “must” be rotated between the different regions that comprise the states. Marginalisation apparently also exists at the state and local government levels too. The majority of the country must therefore be suffering from this malaise of marginalisation at every point in time.

 

My guess is that it is not the benefits that would accrue to the region that these marginalisation politicians refer to. It is more than likely to be the benefits that accrue to the members of the office-holder’s circle of trust and their hangers-on – the ability to influence appointments (and accumulate political capital), the potential to increase their own personal wealth and [in the tiniest of whispers] the opportunity to assist with how looted funds, if any, will be laundered.. If the President or Governor emerges from your region, you can expect a handsome personal reward depending on how close a friend you are or how prominent a role you played in his election. The cry of marginalisation cannot have very much to do with the progress of the officer-producing region.

 

It is extremely idealistic but I am hopeful that one day, marginalisation will cease to be the motivation or justification for a candidate’s eligibility, and the most important factor in our choices at the ballot will be the quality of the candidate’s learning and the strength of his character. I have often wondered whether the prosperity of the world’s richest nations has anything to do with how well-educated their leaders are. I finally did some digging this week and the results are in the table that follows. The table tries as much as is possible to either go as far back into time as 1980 or, where the information was not readily available, to list the last four heads of government. The table omits schools outside the US and the UK, as most of us (Nigerian readers) are unlikely to be familiar with their pedigree.

 

Name of Head of Government

Profession/Education

  
UNITED KINGDOM  

David Cameron

 Oxford University, 1st Class in Philosophy Politics & Economics  

Gordon Brown

 1st class History

University of Edinburgh, PhD History

  

Tony Blair

 Oxford, 2nd Class BA Arts, later became a barrister  

John Major

 O-Levels, Correspondence course in banking  

Margaret Thatcher

 Oxford, 2nd Class Honours BSc Chemistry, later became a barrister

 

  
UNITED STATES OF AMERICA  

Barack Obama

Columbia University (Political Science, International Relations); Harvard Law School

  

George W. Bush

Yale University (History), Harvard Business School (MBA)

  

Bill Clinton

Georgetown University (BSc Foreign Service); Oxford (Philosophy, Politics & Economics); Yale Law School

  

George H. W. Bush

Yale University, BA Economics

  

Ronald Reagan

Eureka College, BA Economics

  
GERMANY  

Angela Merkel

PhD, Physical Chemistry

  

Gerhardt Schroeder

Law

  

Helmut Kohl

History & Political Science

  

Helmut Schmidt

Army conscript

  
FRANCE  

Francois Hollande

Political Studies

  

Nicolas Sarkozy

Law

  

Jacques Chiraq

Political Studies

  

Francois Mitterand

Political Science

  
JAPAN  
Shinzo Abe Political Science, Public policy  
Yoshihiko Noda Political Sciences & Economics  
Naoto Kan Patent Attorney  
Yukio Hatoyama PhD, Industrial Engineering  
Junichiro Koizumi Economics  
SWEDEN  
Fredrik Reinfeldt Business & Economics  
Göran Persson Social & Political Sciences (didn’t graduate)  
Ingvar Carlsson

 

 Diploma in Business Economics, BSc in political science  
AUSTRALIA  
Julia Gillard BA, Law
Kevin Rudd BA Arts, Asian Studies
John Howard BA, Law
Paul Keating (No higher education)
Bob Hawke BA Arts, Oxford
SINGAPORE
Tony Tan BSc Physics (1st Class)

MSc, MIT

PhD Applied Mathematics

  
S R Nathan Social Studies  
Ong Teng Cheong Architecture  
Wee Kim Wee Journalist (Political Features)  

 

There is a preponderance of degrees in political science, law, business, economics and arts (with Singapore throwing its own unique party). Leaders educated in the science of statehood, jurisprudence, commerce and humanities. Of course, this is incomplete, almost half-arsed, data and not much can be gleaned from it. For instance, we do not know from this table if the citizens of these countries prefer leaders with this sort of education or whether it is each country’s political infrastructure that ensures that the cream rises to the top. The table does not examine the presidents’ cabinets and the quality of the team they are surrounded with. We cannot tell if the countries are rich because their leaders are well-educated or whether the leaders are well-educated because the countries are rich.

Regardless, there does appear to be a correlation between the level to which a country’s leaders over time have been educated and how prosperous the country is. This is more so when Sub-Saharan Africa (in which a huge number of the world’s poorest countries are located) is examined in a similar vein and we see several countries that have been pillaged [mostly] by soldiers in the period under review. The soldiers that have usurped civilian rule have also mostly not been of the senior ilk – coups are rarely planned by generals. Many of these countries have also endured long stretches during with the same head of government. Imagine a first-year medical student performing heart surgeries, and answerable to no one for the inevitable cock-ups.

Going forward, while I realise that the “masses” probably do not care much for what university the president went to nor, indeed, if he even went at all, the nature of candidates’ education must be taken into greater consideration. It should come as no surprise, for instance, when people who know nothing of the theories of state get onto our television screens and spout heresies. How can we expect such people to be aware of their own responsibilities in the social contract? When merit is perpetually sacrificed on the altar of marginalisation, how can we expect progress or growth? Perhaps our change advocacy needs to make much more of an issue of this.