21 Aug 2015

Digital music landscape will be unrecognisable in a year’s time, says Spinlet’s Nkiru Balonwu ahead of Africacom

Nkiru Balonwu is CEO of the Spinlet Group, a digital media distribution company, focusing on Africa-centric content. She will be joining the digital music panel at AfricaCom on 17th November, alongside representatives of Orange, Millicom, Deezer, Africori, Unitel and Baziks Entertainment.
Here she shares with us some thoughts on Africa’s digital music market.

What is your Spinlet's position in Africa’s digital market?
Spinlet is a leading music distribution service in Africa. With over 1.7m app registrations to date and 10,000 daily unique visits to our website, our company’s reputation as the continent’s premier streaming and downloads platform continues to grow. Our service has always been a streaming and downloads hybrid and we are glad to see the model being adopted by some of the larger companies in our space.

Where do you see your company in 5 years’ time?
At Spinlet, we have always put a premium on research and looking at the things we can do to improve our product. We have also focused on developing relationships within the industry and expanding our rich and diverse music catalogue. In 5 years’ time, I fully expect our footprint to span the entire continent, hosting content from almost every country, being the go-to service for all things African.

What do you think will be this year’s most game-changing development in Africa’s digital market? The coming of Apple Music will certainly have an interesting ripple effect, especially after the Android version of the service goes live. Everyone else will be compelled to look at their product differentiation and value creation strategies. That level of competition typically results in high-level innovation and I expect the digital music landscape to be unrecognisable in a year’s time.
 
What are the best strategies to monetise content services in African markets?
I think the key to succesful monetisation is providing the easiest access and easiest payment method possible for the users in the target demographic. There is a slight balancing act to be done, however, because of the number of potential customers increases as you go towards the lower end of Africa’s social demographics. The content most likely to do well is content that can be consumed easily on lower end mobile devices and paid for without necessarily having a bank account. This is the reason that RBTs/CBTs have done so well. The challenge is to apply this to content that requires smartphones and bandwidth, like videos. Apart from infrastructure, I think the payments will be the lynchpin. Once we resolve that issue across the continent, monetisation will become more of a marketing function than a prodcut innovation one.

How can digital brands create more value for African consumers? For me, the best way to create value is by focusing on any one of more of the following three things - solving problems; affordability and usability, and improving outcomes.
  • Solving problems: What is the problem that a digital brand is trying to remedy? Digital intervention has to fill a gap or improve on the existing means of doing so. So taxi apps, for example, are increasingly popular because of the extra convenience they provide. Music apps are popular because they provide a ready distribution network and incentives not to support piracy.
  • Affordability and Usability: The product being sold by the brand must be easy to use and affordable by a large enough section of society. This means that apart from the average incomes in the regions being targeted by the brands, devices on which the product will be used are also an important consideration.
  • Outcomes: When consumers purchase a good or service, it’s not the actual commodity they are seeking, but an outcome that they believe will be derived from use of the commodity. The question to ask is “What is the consumer trying to achieve?” Taking Spinlet’s customers, for instance, they aren’t just interested in music. They aren’t just ‘music lovers.’ If that was all they were, or all they wanted was more music, they might as well use any download site. However, we believe that Spinlet users are looking for more than music. There’s a lifestyle they aspire to. They want to discover new artists, and connect and interact with the names they already know. The Spinlet website gives consumers access to artists all over the continent. For the artists that license their content on the Spinlet platform, the outcomes they are seeking are [1] guaranteed and documented revenue when their music is streamed or downloaded, [2] greater publicity, and [3] a further reach for their music and a bigger stage to perform on. Spinlet delivers all of the above.
What types of partnerships should telecom operators and content brands develop?
The answer to this question becomes a little more complex as more telecom operators are now also in the music distribution business. I suspect that this would ordinarily raise competition/antitrust issues outside Africa but that’s probably a different conversation. I think telcos have created value by providing alternative revenue streams for the artists. I think, however, that they erode most of this value with the revenue splits they offer. The ideal partnerships between telcos and content brands (which would include labels, artists and distributors like Spinlet) would be those that promote all parties concerned, support the local industry and leave the content owners with a much healthier share of the earnings than are currently obtainable.

In your opinion what are the most interesting debates to expect at AfricaCom this year?
I probably have a bias towards media distribution, so I’m particularly looking forward to the debate on business models for operators in digital entertainment, as well as the session on pricing and revenue strategies. Given the level of development of the infrastructure across the continent and the raging issue of taking payments conveniently, I expect these sessions to generate very robust engagement. I’m also keen to hear opinions on developing local content and the various conversations on the evolution of mobile money.

For more information of the digital music panel, part of the Digital Entertainment stream at AfricaCom, chech the brochure here.