By SINDA MATIKO

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“There is money in streaming music,” Bongo flava star Diamond Platinumz, whose real name is Naseeb Abdul Juma Issac, is quoted as saying in 2021, then added that he was making more money from international digital service providers than from his performances.

Over in Kenya, several artists say the same about the money in streaming. Among them is Nikita Kering, who is reported to have made thousands of dollars from streaming her music.

It has not always been the case, though. Since 2010, when digital service providers (DSPs) were introduced in Africa, with audio streaming platforms the likes of Simfy Africa launched in South Africa, Iroking in Nigeria, and Mdundo in Kenya, many digital music services have sprung up across the continent providing music lovers with access to thousands of both international and local music, digitally.

Already, global streaming giants are flocking to the African market. In April 2020, Apple Music, which had been available in only 13 African nations including South Africa, Nigeria, and Kenya, expanded to 25 more countries in the continent.

Apple Music, which launched in 2015, stated on its website that, the move was a response to the shifting tides in how media is consumed across the continent.

Read: African music rising on global charts, with help from TikTok

Swedish-founded Spotify, which launched in 2006 and is considered a pioneer in music streaming and arguably the best-known streaming platform in the world, decided to expand in 40 African countries, including Kenya, in 2021. Previously, Spotify only existed in South Africa, Tunisia, Morocco, and Egypt in Africa.

“We took our time with the expansion because entering a new market without what it takes to figure out a different audience would be remiss. We took time to make sure we knew how we would connect with Kenyan and other African music lovers and creators. Every market has different nuances and therefore customisation is key,” Phiona Okumu, Spotify's head of music in Sub-Saharan Africa told The EastAfrican.

Entry of these streaming giants has thus offered Africa’s predominantly young population an additional music streaming option.

A headset is seen in front of a screen projection of Spotify logo. PHOTO | REUTERS

This to many music stakeholders has also meant an increased revenue for local African artists. However, the move has not been without its fair share of challenges as mobile data costs are still prohibitive for most.

A report by the Alliance for Affordable Internet (A4AI) found that Sub-Saharan Africa is home to the world’s most expensive data. This has spurred a battle among the streaming companies as they compete to shift their strategy to fit these market dynamics.

But beyond data costs, artists all over the world continue to decry the stingy royalties payout model adopted by these streaming platforms as was the case with Spotify in October 2020 when the Union of Musicians in the UK and US launched a campaign dubbed Justice at Spotify calling out the platform for paying artists minuscule amounts while raking in billions for its executives and investors.

In April 2022, Spotify reacted by declaring it had paid out $7 billion in royalties to right holders in 2021 stating that the amount was an increase of $2 billion in 2020 and more than double the amount paid in 2017.

In 2023, Spotify paid $9 billion to the music industry which the company termed as "the highest annual payment to the music industry from any single retailer."

On April 1, Spotify introduced a new royalty model that is set to affect the lowest streaming artists as well as music distributors. Spotify had in October 2023 announced its intention to introduce the new royalty model that will now not pay artists, whose tracks don’t hit 1,000 streams in a year.

Read: Where the real battle for Africa lies

Better model

In a statement on its website, Spotify said the new streaming royalty model will ensure an increase in the royalty pool benefiting legitimate artists by deterring artificial streaming, enhancing distribution of small payments that haven’t been reaching artists, and also getting rid of bad actors who upload non-music noise tracks such as sleep, rain, and oceans sounds, targeting streams which Spotify terms as continuous “attempt to steal money from the royalty pool that should be delivered to honest hardworking artists”.

The announcement ignited mixed reactions.

Besides international DSPs, African-based audio streaming startups have also come under criticism of their royalty model payout from various music industry players as the DSP begins to challenge the likes of Spotify and Apple’s market dominance in the continent.

Boomplay which launched in August 2015 in Nigeria and Mdundo in 2012 in Kenya, are two platforms that have become formidable contenders with impressive growth over the last few years.

With 60 million active users, the Chinese-owned, Africa-focused Boomplay is the most popular music streaming service on the continent.

Leading the pack, it is one of a bevy of Afroacs music streaming and audio content platforms that are offering alternatives to in-demand global streaming.

Whereas it enjoys dominance in Africa, with “70 percent of music consumption on Boomplay is local (within Africa),” once stated Tosin Sorinola who was Boomplay's director of artist and media relations until 2023 when she left the company, many artists are still of the view that it can do better in terms of royalties payment.

Kenyan singer Vivian Wambui agrees.

“Boomplay is a growing platform. The returns are not the best, not entirely but they add value to the artists by helping you with marketing. There’s something, but of course, music monetizing is never perfect. To me, show performances are still the top money-making space for the local artiste.” Ms Wambui states.

Boomplay does not reveal the cost per stream or how it remunerates artists on its platform as it is confidential but claims it has the best revenue-sharing model in Africa.

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“Such information is hard to come by. I worked there for about three years and pay per streaming is a safeguarded piece of information; very secretive. However, what I know is that there is an advertisement revenue sharing between an artist and Boomplay. The company is investor-funded and also generates money through advertisements. Different artists have different contracts with Boomplay depending on one’s negotiation but there is always a cap to how much an artiste can ask for. Depending on an artiste's negotiation one can get a split of 70-30 percent or 60-40 percent with the highest percentage going to the artiste,” a former Boomplay employee, who requested anonymity, told The EastAfrican.

Besides ad revenue sharing, Boomplay also pays royalties to artists based on targets.

“Here is where, pay per stream comes into play. But that is based on an artist's streaming numbers and how often the artist's music is being streamed. Payments are made quarterly (three months) a year but one will have to meet a given target threshold for that quarter. If you don’t hit the target it's carried forward to the next quarter,” the source adds.

Boomplay’s model is slightly different from that of Mdundo, which in 2023 announced its highest payout to artists and distributors of Ksh100 million ($775,000) to rights holders, its all-time high royalties since its inception 11 years ago.

Tanzanian musician Nasibu Abdul Juma, popularly known by his stage name Diamond Platnumz. PHOTO | POOL

With 20.3 million active users by June 2022 across Africa with 4.9 million from Kenya, Mdundo, which is a free audio downloading and streaming service, increased its revenue from advertisement. It is also investor-funded having listed on the Danish stock exchange (the Nasdaq First North Stock Exchange) to help it accelerate its growth in sub-Saharan Africa.

Its primary source of revenue is advertisement through display banners and audio advertisements embedded into its music tracks.

Martin Nielsen, co-founder and CEO attributed the growth to Mdundo’s capability to tap into the mass market as it aims to clock 50 million monthly active users as well as positive earnings before taxes, depreciation, and amortization by 2025.

Mdundo has an artist-centred financial model. The 100,000 artists who have signed to the platform split in half all the revenue made by Mdundo with fifty percent of it being paid out to artists as royalties.

The payout made in January and July of each financial year is weighted with the highest share of downloads having a similar share in royalties. During payment, an artist's download share is calculated and then multiplied by the total royalties to determine how much one is going to receive. Due to changes in the total download and the amount of money that Mdundo makes, there is a fluctuation in the payouts.

Read (from the Archives): Musicians bank on online platform to sell their art

Numbers game

“We look at how much the music is being consumed. As an artist, if you calculate one percent of all the downloads on Mdundo you get one percent of the Ksh100 million ($775,000) . We are paying per download and artists have a backend where they can see the number of downloads and their earnings. It’s purely based on numbers,” Nielsen said.

But even with a back-end for an artist to know how much to expect, the majority of musicians who spoke East African, feel short-changed.

“Previously I never used to earn anything because I was under a label (EMBRecords) which was the right holder. I began earning from them when I became an independent artist. They paid me Ksh4,000 ($31) for 14,000 downloads. I wouldn’t dare compare them to Boomplay where I have over 800,000 streams over the same period. Boomplay does a lot of marketing for an artist. I am not saying Boomplay is paying much, but they are definitely better than Mdundo,” gospel singer David Wonder, one of the top artists on Mdundo currently, argues.

Ohangla musician Prince Indah who is a top performer on both Mdundo and Boomplay concurs.

“I’m a little bit impressed by Boomplay, they are trying to compete with YouTube but they aren’t there yet. As for Mdundo, i you may have millions of downloads and still earn some petty cash. In general, gigs remain our main source. We are not there yet where we can live comfortably out of revenue generated from streams like our counterparts abroad.”

“Mdundo’s structure and model doesn’t work. The platform has been growing since 2013, it's now 10 years later but still, there is nothing to write home about otherwise I would have remained on the platform. Boomplay is a growing platform. It’s clear, not Mdundo,” Vivian adds.

But even as local artists vent over the poor pay offered by the African streaming platforms, Camilla Owora who worked for Boomplay as an artiste and repertoire manager before crossing over to music distribution company Ziiki Media as regional marketing head East Africa, has observed a rather peculiar trend among the musicians.

“What’s unfortunate is that a majority of East African musicians are not on international streaming platforms like Spotify and Apple Music, which are the streaming platforms that pay better yet they are now available here in Africa,” Ms Owora, who has since left Zikki but keeps tabs on the music industry, and insists artists can make enough money from DSPs, especially the well-established international ones.

''I won't mention names but I can confidently state that artists are making a living out of streams. From my time in Ziiki on average from the artists we handled in East Africa including all the big names you know, artists would easily make $20,000 in a month,”’ Ms Owora states.

According to her, the purse could be even heavier depending on several factors.

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“If an artiste has a hit that is high on rotation, then the streams will soar impacting on the revenue generated. Also if the streams originate from countries with high CPM (cost per millie) then the returns would be great. A good example I would like to give is Tanzanian Rayvanny. When we used to look at his Spotify numbers, among the top 10 countries streaming his music interestingly Tanzania and Kenya always fell at the very bottom. Most of his streams came from Europe, Australia, and US. These countries have higher CPM and that means some good amount,” she adds.

Kenyan sensation Nikita Kering would agree.

“What most people don’t know is that right now most money is in music streams.”

Nikita made the remarks last year at a musical event in Nairobi. At the time data from Spotify had ranked her amongst the top 10 most streamed artists in Kenya in the previous year 2022. Her hit record ‘Ex’ had been on high rotation in 2022 making it onto the list of top 100 most streamed songs in Apple Music that year.

The EastAfrican understands for that year, Nikita averaged a royalty payout of Ksh300,000 ($2,330) worth of revenue streams every month. Spotify pays artists every month while some DSPs pay quarterly.

Bongo flava star Diamond Platnumz, who is arguably the top East African artiste cashing in the most from streaming revenue, has in the past confessed to collecting more money from international digital service providers than from his performance fee which currently stands at $100,000 for shows outside Tanzania.

“There is money in streaming music. There are many platforms but Apple Music is the one that has a bigger payout in my view.” Diamond said, responding to a question on stream revenue from Wasafi FM radio presenter Lil Ommy.

Diamond went on to illustrate.

“There has always been a perception that YouTube pays the most. That’s not true, I will give an example. From my estimates, if you get one million views on YouTube, you get between Tsh600,000 – Tsh1 million ($220-$370). However, when it comes to(Apple’s) iTunes a million download streams will get you about Tsh2.5 billion ($920). Now that’s a fair amount of money,” he added.

Spotify pays between US cents 0.33 and US cents $0.54 as of 2021 according to Insider while competitor Apple paid an average of one US cent per stream in 2021, according to the Wall Street Journal.

However, Spotify noted it does not pay per stream, instead, it pays based on the share of overall streams on the platform and doesn’t believe the rate per stream is a meaningful number to analyse.