The New Model of Artist Remuneration: Opportunities in the Fan-Powered Royalties Model

Almost overnight, Chukwuka Ekweani’s (better known by his stage name, CKay) “Love Nwantiti” became the soundtrack of a TikTok original dance craze.[i] The hit song and music video reigned as the “most-watched” music video on YouTube for two weeks in October 2021. [ii] The Nigerian-born sensation drew unprecedented attention to African pop, a genre largely influenced by African musicians who have never been catapulted to global audiences as CKay has. The worldwide popularity of Ekweani's song, and the genre of African pop in general, is the result of a significant increase in awareness and investments in the distribution of the continent's music. In fact, for the first time in 2021, the International Federation of the Phonographic Industry (IFPI) included Africa and the Middle East as key regions for the industry in their 2021 Global Music Report. African pop on the rise This growth is being powered by international music companies such as Warner Music Group, who are activating a global-local approach. This strategy establishes local teams and partnerships to drive holistic, grassroots relationships with local artists, distributors, and music firms. Warner President of Emerging Markets, Alfonso Perez-Soto, shared, "we think local, we are on the ground and we establish partnerships with companies that are embedded in the culture." [iii] CKay's commercial success began in 2015 when he signed with a local label, Chocolate City. [iv] As part of Warner Music Group's expansion in 2019, the company entered a long-term partnership with Chocolate City that included investment into distribution, label services, and access to Warner's network. This partnership and similar partnerships have helped build much-needed infrastructure in the region’s music business, particularly where online distribution is involved. The increased efforts and resources dedicated to digital commercialization led to Africa and the Middle East being the world’s fastest-growing regions in 2021, expanding by 37.8%, with streaming accounting for 36.4% of its USD 89.5 million overall revenue. The increase in streaming from the region generates critical data that gives labels insight into what music can be marketed to global audiences. Such statistics record the rising wave of artists like Tems, who took home the 2022 BET Award for Best International Act.[v] Another act, Omah Lay, is an Afro-fusion singer who quickly climbed the charts and landed global playlists with their hit song, "Lo Lo." With the expanded availability of this music, and more and more streams generated, Omah's track was picked up by Apple Music's algorithm and featured on their bi-monthly artist discovery program playlist, "Africa Rising," which further circulated his sound to Apple music listeners worldwide.[vi] Playlists and radio airwaves are becoming more inclusive of hits from across the globe. Nevertheless, national cultures are not dissolving: on the contrary, they are expanding. This is because more streams mean more context is being provided to help uncover inner-market segmentation and regional technological limitations. Even though CKay and Omah Lay hail from the same country, they each face unique individual challenges. Global music companies signing similar artists are investing in specific, regional infrastructure pertinent to elevating those local artists. Temi Adeniji, Managing Director of Warner Music South Africa and Senior Vice President of Strategy, Sub-Saharan Africa, shared, "...it's really important to also think about growth on the ground and about what is required to build a music ecosystem that is fit for purpose. That involves everything from backing governments in their efforts to enforce Intellectual Property (IP) rights, to working with Digital Service Providers (DSPs) to build domestic subscription numbers. We need to address the market holistically."[vii] Labels are actively working with artists and developing infrastructure to overcome the technological and legal barriers that impact their ability to connect to potential audiences, monetize their music, and engage with active listeners locally and globally. The success of scaling these barriers requires increasingly diverse means of distribution and production. [viii] Music today is overwhelmingly consumed through digital streaming platforms. However, as Temi of Warner Music South Africa stated, building a music ecosystem requires building domestic subscription numbers.[ix] Streaming platforms generate the data assessed by music companies to analyze the performance of established and emerging artists alike. However, artists in regions where the barriers to streaming are upheld by high data costs for internet usage, poor quality cellular networks, or incompatible devices face a disadvantage. [x] From a lack of listeners on streaming platforms to those engaging in music piracy, there remains a significant gap in data insights, further fragmenting an artist's success metrics. These metrics inform record companies, brands, charts, and other key industry entities' decisions for investing in or promoting an artist. While music is subjective, success metrics are still deciding factors when assessing brand partnerships, playlists, or media coverage. Therefore, missing or incomplete data insights significantly impact opportunities available for artists and industry entities looking to get into those markets. Nneka Chika Mogbo is a Music Industry Masters student and founder of the Talent rep & music consulting agency, Úrú Music Collective! Piracy Music piracy in Africa is a significant challenge for artists seeking to protect and monetize their work. [xi] One solution to this is Boomplay, a popular DSP which started in Nigeria. Like Apple Music on iPhones, the Boomplay app comes preinstalled on Transsion-brand devices like Tecno, Infinix, and Itel. The company is headquartered in China with satellite offices in Nigeria, Ghana, Tanzania, Kenya, Cameroon, and Côte d'Ivoire. Since its launch seven years ago, they already hosted over 60 million active users, converting many from piracy to authorized streaming. Listeners can stream songs for free with ads or pay to listen ad-free, which has garnered a 56.4% increase in ad-supported streaming in Sub-Saharan Africa alone.[xii] Within the first few months of the pandemic, the company saw a 200% increase in streaming data. Besides bringing revenue back to the artists and away from piracy, this increase serves a greater purpose in relaying valuable information to labels, ad sponsors, and artists. For Boomplay, the increase in usage offered more data insights into rising music culture trends based on listener habits. For ad sponsors, the increase in Boomplay consumers and streaming yielded more opportunities for brand awareness in more territories. Finally, with a growing audience on the site and reliable data insights, artists were provided another avenue to interact with their fans and leverage their digital streaming data.[xiii] The company's growth led to the decision in October 2021 for Boomplay's data to be added to the data aggregated by Billboard and included in its most notable charts, such as Hot 100 and Billboard 200.[xiv] However, while Boomplay’s growth is increasingly pivotal in African music markets, the threat of piracy still requires government attention and formalized performance rights organizations. The IFPI Moves In In 2020, the IFPI established its first-ever Sub-Saharan Africa regional office in Kenya and worked across 46 countries. [xv] By 2021, the new office began administering International Standard Recording Codes (ISRC) in the region. As a result, any sound recording or music video can be uniquely and permanently identified. In addition, this administration is helping producers and artists avoid ambiguity by somewhat simplifying the management of rights, primarily when recordings are being licensed by different services and across borders. [xvi] Artists can apply for an ISRC without being a member of the IFPI or any other music industry body and assign their codes to their recordings. While ISRCs aid in identifying sound recordings and music videos, they do not specifically identify compositions, music products, or performers. The codes indicate the year of reference, designation code, and ISRC validity. IFPI across the continent appointed official ISRC managers to grant ISRCs and support artists in managing their ISRCs. [xvii] Spinlet, alongside newly appointed ISRC managers, is working to educate artists about ISRCs, as it is a valuable measure of legal protection still largely unknown by artists in the region. Conclusion The rise of African artists and sub-Saharan influence in music requires investment in the artists themselves. Investing in these artists means developing an ecosystem that allows creatives and music companies to thrive. These investments mean protecting rights and pioneering sustainable community developments, especially in technology. Organizations like WMG and IFPI establishing local offices are effective at centering the needs of artists and their audiences, which is key to unlocking the full extent of creative and commercial growth opportunities throughout the continent. IFPI's 2021 Global Music Report is evidence that Africa and the Middle East quickly become competitors to far and neighboring markets. The competition is an avenue for cross-market collaborations and further recognition of rising cultural trends in domestic and international music markets. At the same time, the commercialization of this music requires adequate protection of rights holders and educating them about their protections. Overall, this global-local approach to growing Africa’s music markets requires advancing legal protections, music monitoring, and providing more opportunities for artists to monetize their music while reaching their fans. Edited by Vincent Williams Endnotes [i] Shaw, Lucas. 2021. “How CKay's Hit Climbed to the Top of...

Author: Nneka Chika Mogbo

The New Model of Artist Remuneration: Opportunities in the Fan-Powered Royalties Model

The Global-Local Approach to Growth in Africa at Large