Revolutionizing The African Music Industry – Farouk Jivani

When we read about tech and internet companies reaching amazing new heights out of San Francisco, New York, or London their success is more often than not based on innovative disruption across mature markets and industries.

In contrast, African internet businesses are not only disrupting but doing much more. Companies are creating new markets, monetizing industries, and just starting to generate what will be a wave of monetary and social value across the continent.

Mdundo is one of Africa’s fastest growing music streaming and download services with over one million monthly active users and just one example of how the internet and innovation is creating opportunities for growth and value creation.

The African music industry is blossoming across the continent, but with fragmented regulatory bodies and distribution barriers across 56 countries musicians are looking for ways to hack growth and are determined to make their mark on this changing landscape. The majority of African musicians are independent; they play the role of songwriter, producer, performer, manager, and promoter.

These artists have been confined to building their names through radio and pirated content distributed through CDs and SD cards from consumer to consumer. Without the support of global music labels signing multi-album contracts and million-dollar marketing and distribution budgets artists have struggled to monetize content through anything other than caller ring back tunes and live performances.

In the three-and-a-half years since its founding, Mdundo has enabled over 25,000 artists to distribute and monetize content through its website and popular android application. Mdundo’s music team engages thousands of artists every month to get over 2000 new tracks uploaded onto the platform. Artists earn a fair revenue share from a new monetization channel that previously did not exist.

Consumers are able to download songs and stream unlimited music on their phones while being served with advertisements that help monetize content and compensate artists. Premium paid subscriptions allow users to consume ad-free content offline through a monthly subscription. By delivering a streaming service tailored to the African music industry and consumer Mdundo is allowing both artists and advertisers to leverage technology and leapfrog into the digital age.

Across a continent where over 50% of the population is under the age of 18 smartphones are making it easier than ever to reach a young dynamic African audience. In 2002 only 10% of Africans had mobile phones, today 80% have mobile phones and by 2020 there will be 950 million smartphones across Africa. Significant increases in 3G connectivity across rural areas, fast 4G connections in urban centers, and dropping data prices has allowed Mdundo to see rapid growth in markets like Tanzania where 600,000 monthly active users have started using the service in less than 18 months.

While radio remains the platform with the furthest reach, young African consumers are increasingly turning to their smartphones to download content they can consume on their own terms. This change in behavior has allowed artists to grow beyond their home markets and reach out to audiences across the region and continent. Mdundo has seen this cross-border growth first hand with Tanzanian and Kenyan new releases hitting the top 20 charts in neighboring countries without significant radio play, something that would be considered an impossible feat in the past.

Artists are capitalizing on these opportunities by promoting events and packing out shows in Kampala, Nairobi, and Dar es Salaam. Artists, both big and small are building regional and pan- African brands where they garner millions of followers and millions of downloads that allow them to generate revenue from multiple income streams.

Mdundo also provides brands and advertisers a unique opportunity to engage young dynamic audiences. With 80% of users on Mdundo aged 18 – 35 and 97% of users accessing content through a mobile internet connection advertisers are able to reach the fast-evolving African consumer who is not looking out the window during their weekly commute but instead at their smartphone.

Digital advertising platforms like Mdundo, Facebook, and Instagram allow brands to pair their communication to specific musical genres like gospel and hip hop and segment audiences that are more likely to be receptive to a particular message. These platforms provide advertisers tools to measure reach, conversions, and return on investment that traditional mass media platforms cannot.

Current valuations on various music platforms range in the hundreds of millions of dollars to billions. In fact, Spotify, currently holds a valuation of nearly $11 billion in total worth. Tidal and Soundcloud respective