Digital Potential In African Music Markets: What To Expect

Written by Staff

Jul 14, 2015

From Billboard. Story by Glenn Peoples.

Hopes are high for music sales in emerging markets. As smartphone ownership becomes commonplace and more legal options become available, a huge number of consumers from Africa to South Asia can tap into legal music services. But what can be reasonably expected of these emerging markets?

Take two of sub-Sahara Africa’s bigger economies, Nigeria and Kenya.

PricewaterhouseCoopers has forecast consumer spending on recorded music revenues to hit $43 million and $19 million for Nigeria and Kenya respectively this year. Both markets are undergoing shifts also seen elsewhere in the world, meaning digital gains will roughly offset physical losses. PwC expects Nigeria’s physical market to decline $3 million to $14 million by 2017, while its digital market is predicted to grow $2 million, to $28 million. In Kenya, a $2-million decline in the physical market in 2017 is expected to overshadow a $1-million increase in the digital market.

Just how much growth can be achieved in Nigeria and Kenya? For clues, one can look to the other African county in PwC’s report, South Africa.

South Africa, with a population of 53 million, is expected to generate $85.3 million in consumer spending on music this year, a figure multiples larger than expected spending in either Kenya or Nigeria. And on per-capita basis, South Africa’s music spending of $1.61 is far greater than $0.43 in Kenya and $0.25 in Nigeria. By this measure, Kenya and Nigeria have much room for improvement. However, under further analysis these numbers lead to different conclusions.

South Africa has the trio’s highest per-capita gross national income at $12,240 based on expected 2015 spending. Nigeria, owners of the trio’s largest population of 173.6 million, has a per-capita gross national income of $5,360. Kenya’s per-capita gross national income is $2,780. But while the three countries have very different per-capita gross national incomes, they’re more alike than they first appear.

A more accurate way to compare these countries’ music markets is to compare the countries’ per-capita gross national incomes relative to their music spending.