Author: Botho Emerging Markets Group
Site of publication: Goethe
Type of publication: Report
Date of publication: July 2020
Breaking down barriers
Technology creates an unparalleled opportunity for musicians to expand beyond their geographical locations to reach different audiences across the globe. In doing so, it has revolutionized the music industry where, previously, content was recorded on CDs or distributed through radio channels. Reports now indicate that consumer habits are increasingly shifting to accessing content through digital platforms. According to a 2019 report by the International Federation of the Phonographic Industry (IFPI), people are increasingly shifting to accessing music through digital platforms, resulting in a 21.1% increase in digital revenues, while physical revenues – such as CD sales – dropped by 10.1% in 2018. Due to its young, digitally connected population (the average age on the continent is 19.4 years and 60% of the population is under 25 years, the youngest population of any region globally), Africa presents a massive opportunity for artists seeking to reach wider audiences. A recent report by PriceWaterhouseCoopers indicates that entertainment and media spending in the 10 youngest markets worldwide is growing three times as rapidly as in the 10 oldest markets. Streaming and the consumption of music through digital platforms grew consistently over the past four years, with a 32.9% rise in paid streaming in 2018. Given the growing preference for digital platforms, African musicians must be strategic about capitalizing on the limitless opportunities presented by the internet and the experiences they can create for their fans. The first step in exploiting this opportunity is obtaining proper licensing followed by the digitization of the songs.
Artists must also be proactive about using multiple platforms to increase the touchpoints between themselves and their fans, as consumer behavior is constantly changing. Closely monitoring and strategizing to accommodate consumer behavior in publishing music is particularly important now given the interruptions COVID-19 has created in the music industry. Tours, festivals, and live shows have been rescheduled or canceled and the pandemic creates a lot of uncertainty and indefinitely closed off some revenue streams for artists.
Similar to the music industry, technology has fundamentally changed both African film production and distribution. Five decades ago, cameras were operated by a full crew to get an aerial shot, which needed an aircraft-mounted camera that was so heavy it most likely weighed more than the plane itself! Once the film was captured, the editing was done by physically cutting and pasting the films together, which would take an average of three and a half months. Today, new, lighter cameras allow for clearer images and shots never thought possible, and with the incorporation of cloud technologies, editing films has never been easier. Teams recording films across the globe can now work on the same film remotely. Instead of going to the local theatre to catch the nightly showing of a movie, on-demand, streaming services, smartphones, the internet, and TV provide an opportunity to watch films anywhere instantaneously. That said, in-theatre experiences have also not been left behind – enhancements in sounds and visuals such as 3D enhance audience experiences and create more immersive experiences for users.
How do Subscription Video-on-Demand platforms work?
There are two key ways African content makers distribute their content on video-on-demand platforms: licensing and specialized agreements with production houses. When licensing, video-on-demand platforms obtain permissions (licensing agreements) from the content owners to display their films for a specified amount of time. On the other hand, specialized agreements are used when displaying original content where these platforms form agreements with production houses to transfer full ownership of the films.
Africans have quickly embraced video-on-demand services, and subscriber numbers across 35 Sub-Saharan African countries are forecasted to hit 10 million by 2023. Consumers across the region list flexibility, low cost, and convenience as some of the main reasons they would rather subscribe to a streaming platform as compared to cable TV. Additionally, increased internet and mobile penetration rates in Africa caused a surge in accessing films through the video-on-demand platforms.
- Netflix, the world’s largest streaming company, announced its investment in Nigeria’s film industry, Nollywood, and its plans to expand across Africa in March 2020. Netflix’s expansion plans include commissioning original content by partnering with local creatives, which offers African filmmakers global visibility.
Regionally, there are other video-on-demand platforms that focus on distributing African content, and these include:
- iROKO, launched in 2011 by Nigerian entrepreneur Jason Njoku, is a multimedia company that licenses, distributes, streams, and produces Nollywood content and offers both subscription video on demand (SVOD) service iROKO.tv and an Android app service.
- Showmax, an SVOD service offering African and non-African content in 36 African countries as well as in several non-African countries such as Poland and the United Kingdom. Showmax was launched in 2015 from South Africa as a brand of multimedia company Naspers—arguably the largest and wealthiest media corporation based in Africa and the owner of South African pay-TV channel M-Net and digital satellite company DStv.
- Viusasa, an SVOD owned by Kenya’s Royal Media Services that is accessible via web and app. The service offers movies, videos, and live television channels. It has content available in nearly all of Kenya’s local languages.
Africans have quickly embraced video-on-demand services, and subscriber numbers across 35 Sub-Saharan African countries are forecasted to hit 10 million by 2023. Consumers across the region list flexibility, low cost, and convenience as some of the main reasons they would rather subscribe to a streaming platform as compared to cable TV. Additionally, increased internet and mobile penetration rates in Africa caused a surge in accessing films through the video-on-demand platforms
Benefits of technology in the film sector include:
Cost reduction: The high costs associated with recording on film, rather than digitally, hindered the growth of independent filmmakers. In the 1990s, the cost of movie production was at an all-time high due to higher costs for movie stars, agency fees, rising production costs, and advertising campaigns. In recent years, however, independent filmmaking is now on the rise due to falling costs of digital and advanced cameras and a reduction in the number of crew members required for a shoot. Improvements in camera technology have cut down on movie production time and lowered the cost through easier storage, preservation, and distribution.
Efficient and improved production processes: Technology has improved the efficiency of film production and post-production. At the production stage, for example, filmmakers now increasingly use digital cameras that can capture multiple angles of a scene simultaneously and capture visuals in high definition. These advances not only improve the quality of the finished product, but also allow actors to receive real-time feedback on their performances.
Increased access to finance: Growing popularity of crowdfunding—in which small contributions from individuals are gathered—now helps make up the budget shortfall of a growing number of films.
New ways to bring animations to life: In traditional animation, hand-drawn figures are digitally inked and colored by computers; however, today, nearly all animations are digital. With the help of computers, digital pens, tablets, and digital sculpting tools, production times and costs have decreased dramatically. Things that were previously only possible for major studios 20 years ago can now be done by one person or a small film crew
Fashion is regulated by rules and standards from both countries of origin and destination; technology alone cannot democratize fashion the same ways it can with African film or music. There is not yet a version of Spotify, Youtube, Apple Music, or even ViuSasa or iRoko for African fashion.
E-commerce, for example, can move African fashion around Africa and the world, but faces challenges in its uptake on the continent. For example, South African shoppers surveyed in February 2020 spent an average of $109 on online purchases. While this figure is the highest in Africa, it is $400 lower than the global average. In fact, the six African countries featured still ranked in the global bottom 10. However, in a world recovering from COVID-19, restrictions on movement and congregation will combine with changing consumer habits and business operations to create “a new normal” in how people access clothing. In addition, if wellutilized by creatives and business owners, e-commerce can break down barriers to access to African fashion for African diasporas and for the African middle and upper classes. In turn, it can create regional value chains and economies of scale that could ultimately make African fashion globally competitive.
E-commerce’s benefits may be limited to Africa’s diaspora and middle and upper classes due to affordability. Ultimately, most clothing produced, designed, and sold in Africa competes with imported used clothes, which sell at such a cheap cost that it is virtually impossible for locally made clothes to compete. Cheaper imported clothes pose a major barrier to growth that technology cannot fix and will have to be addressed through policy and protections for Africa’s domestic fashion industries instead.
Collective societies and regional representative bodies could play a key role in the music sector in Africa. Currently, the African market lacks proper systems of revenue collection, with many African artists earning much less than their global counterparts. Africa accounts for just 2% of global music revenues and 1% of royalty collection revenues. Africa has all the fundamentals for a thriving music industry – a diverse talent pool, a young population and increasing internet penetration – but has yet to achieve its full potential. Thabiso Khati highlighted the fact that apart from South Africa, other African markets lack sophisticated industries and ecosystems to monetize their music sector. More specifically, these markets lack collection houses that are necessary to create a system of tracing the revenue that has been collected in these markets. This is a big problem, not just for artists who may make fewer earnings, but also for driving investments into this sector as the actual market size and earning potential would be difficult to estimate.
E-commerce, for example, can move African fashion around Africa and the world, but faces challenges in its uptake on the continent. For example, South African shoppers surveyed in February 2020 spent an average of $109 on online purchases
Unfortunately, the current reporting of publishing rights and royalties collection across the continent is incoherent, which means that even as paid streaming grows, the same may not be reflected in income by artists across the continent. A 2019 report by the International Confederation of Societies of Authors and Composers revealed that Africa collected a total of €78 million (USD 86.54 million) in royalties in 2018, an increase of only 0.7% from 2017. The amount also represents less than 1% of the total contribution globally, compared to Europe’s 56.4%. At a national level, some countries are making strides to facilitate the monetization of music. For example, South African collecting society Capasso launched a licensing hub for Africa, which currently includes 17 collection houses in Algeria, Kenya, Ghana, and others. Global equivalents include hubs such as Ice and Armonia in Europe – by 2019 Ice had passed the €1bn (USD 1.11 billion) mark for digital royalties distributed to its societies on behalf of creators.
The advantage created by regional hubs is that they are able to collect royalties across multiple territories under a single agreement. The Pan African Licensing hub founded by Capasso signed deals with Apple Music, YouTube, Facebook and Spotify, and African streaming services like Boomplay, Udux, MusicTime, and Mdundo.
At the national level, many African countries have their own film associations and boards that play a significant role in regulating the sector and spurring its development. However, Africa’s film industry is highly fragmented and lacks regional and continent-wide collaborative frameworks that would go a long way in enhancing film production and distribution. The Africa Continental Free Trade Agreement provides a solid starting point to address this challenge. The agreement is expected to include a provision on intellectual property in its second phase, a move that could transform collaborations not only in film but other creative sectors across the continent as well.
So far, competitive co-production incentives are available in countries such as South Africa, Kenya, and Senegal. In South Africa, for instance, foreign filmmakers receive various tax reductions if a film is produced (filming and post-production) in South Africa. The AfCFTA has the ability to create a formalized platform that will encourage co-production not only among African countries but also with other countries globally. Some of the shared solutions needed for intra-African co-production to become effective include efforts such as increasing access to finance for African filmmakers, strengthening business and technical skills, and developing collective go-to-market strategies to attract continental and international audiences.
The fashion and textile and apparel industries in many African markets share a common denominator: fragmentation that inhibits growth and creates blind spots about potential investment opportunities. Workers in fashion are spread across cottage industries, small and medium enterprises (SMEs), multinational corporations, and even refugee camps. A lack of collective voice and platforms for national coordination means the industry lacks the channels to influence policy and practice that could significantly impact the sectors and its workers. In one given country, there may be multiple fashion councils all working towards different goals under the same guise of representation of the country’s designers. One the other end of the spectrum, there could be an absence of a council altogether, as is the case in Senegal. According to Antoinette Tesha, the Textiles & Apparel Industry Director at Msingi, an organization working to build dynamic and globally competitive industries in East Africa, Fashion and textile and apparel policy issues fall under different departments within governments that do not naturally intersect, which can lead to a lack of coordination and cohesion in national economic policy. Across the eastern coast of the continent, there are examples of conflicting policies as a result of separate ministries having oversight of different parts of the value chain, such as garments falling under manufacturing while training falls under ministries of education.
Global access v. Local appeal
The question of global access versus local appeal is a defining question facing African fashion industries today. Globally, many brands achieved domestic popularity before expanding abroad. American brands, for example, flourished after World War II because European brands that American consumers historically preferred were no longer available.10 American brands developed to cater to different markets and showcase different levels of luxury catering to more than one income group. The newfound global “sexiness” of Nigerian music serves as a good example of a similar phenomenon currently taking place in Africa in an analogous creative industry. Nigerian music was popular across Africa before Western artists started collaborating with Nigerian artists and before most people in other markets started adding it to their Spotify playlists. Many African fashion brands are luxury, made-to-measure, and geared toward export. While the approach may lead to success for some creatives, their clothing remains inaccessible to many Africans who end up sourcing for clothes from foreign-owned stores to find cheaper alternatives.
The advantage created by regional hubs is that they are able to collect royalties across multiple territories under a single agreement. The Pan African Licensing hub founded by Capasso signed deals with Apple Music, YouTube, Facebook and Spotify, and African streaming services like Boomplay, Udux, MusicTime, and Mdundo
The African fashion sector must chart a path of domestic and regional popularity to pre-empt global access. One potential strategy is for African designers and manufacturers to adopt a “house of brands” approach to create a variety of products under one parent brand that appeal to the mass market.
Although there are many initiatives by Africans to support the continent’s music industry, foreign entities have traditionally dominated Africa’s music landscape with companies such as Universal Music Group and SONY Entertainment expanding across the continent. Universal has made strategic moves across the continent since its launch in Johannesburg in 2017. Universal has a branch in Abidjan to manage the West African region, and in 2018 it bought AI Records, one of East Africa’s biggest labels.
In the same year, the group launched the label Universal Music Nigeria, which has recently signed deals with musicians such as Banku singer Mr. Eazi, Tekno, and Vanessa Mdee, Universal Music Nigeria has also indicated that it intends to build its second fully functional studio in Nigeria to support the growth of the music industry in West Africa. Just recently, in January 2020, the group signed a deal with Kenya’s largest music band, Sauti Sol, further expanding its footprint on the continent. SONY is at the forefront of expansion and partnerships in Africa. Adopting a unique approach, the company has capitalized on partnerships with telcos and mobile carriers to appeal to consumers in pre-paid markets with limited disposable income. SONY entered the African market by opening its first offices in South Africa before expanding into Kenya and Nigeria. SONY has also signed Nigerian artists D’banj and Davido and Tanzania’s Rose Muhando, among others.
African filmmakers often find it challenging to effectively reach audiences at scale, yet the region’s population is a highly under-tapped market for filmmakers. Africa currently has a population of 1.22 billion people, which is expected to increase to 1.68 billion people by 2030. Successfully developing consumer demand for African-produced film can drive future economic growth and generate jobs while accelerating the visibility of African stories on the global stage.
India’s film industry, considered one of the most prolific globally, has only 10% of the content being consumed in English or other non-Indian languages. Now, movies from India’s Bollywood are consumed globally, with some countries adapting them to their own local languages. African filmmakers and other stakeholders should work together on the quality and scale of distribution and marketing resources to bridge the gap between creatives and their local consumers.
As Senegalese designer Safietou Seck stated, “You cannot develop a country out of copying and pasting whatever is happening outside. We [Africans] have to specialize in what we do best.” Technology to break down barriers to access, collaboration to promote upskilling of current and potential creatives, and striking a balance between global access and local appeal will be the defining factors that empower Africa’s music, film, and fashion industries to specialize in what they each do best.
The time is now for governments, investors, non-profits, and creatives alike to co-create and drive forward collective, aspirational visions of what these industries across the continent can become, especially in a post-COVID-19 world: sources of national pride, global hubs for events and tourism, and a driver of Africa’s growing global cultural influence.
Les Wathinotes sont soit des résumés de publications sélectionnées par WATHI, conformes aux résumés originaux, soit des versions modifiées des résumés originaux, soit des extraits choisis par WATHI compte tenu de leur pertinence par rapport au thème du Débat. Lorsque les publications et leurs résumés ne sont disponibles qu’en français ou en anglais, WATHI se charge de la traduction des extraits choisis dans l’autre langue. Toutes les Wathinotes renvoient aux publications originales et intégrales qui ne sont pas hébergées par le site de WATHI, et sont destinées à promouvoir la lecture de ces documents, fruit du travail de recherche d’universitaires et d’experts.
The Wathinotes are either original abstracts of publications selected by WATHI, modified original summaries or publication quotes selected for their relevance for the theme of the Debate. When publications and abstracts are only available either in French or in English, the translation is done by WATHI. All the Wathinotes link to the original and integral publications that are not hosted on the WATHI website. WATHI participates to the promotion of these documents that have been written by university professors and experts.