Interview Yoel Kennan
Why the scramble for African music?
The reality is the recording business worldwide has never been in a better place in its history ever. The growth is close to double digit this year. The margins are higher than they were thanks to the digital development and that you don’t have to manufacture stock.
We see this not only in first world markets like US and UK, but also there is a strong digital transformation in Japan.This is the second biggest market in the world.Most interestingly, developing countries are showing some real growth. China is big.Over the last few years the real star has been Latin America, thanks to the growth of digital. Apple, Spotify and Deezer are all strong in the region.
When you see real growth across all markets, the last geographical area missing at the moment is Africa. We know the potential of the continent in terms of creativity and business and therefore the major players and investors are looking at making sure that they don’t miss on the potential of the continent.
We have seen in the last three months Apple, one of the top 3 biggest companies in the world, aggressively rolling out their music offering across the continent to 26 new markets over and above the11 they already had. That is a very strong signal. We know that Spotify is looking at the rest of the continent as well launching in SA and certain countries in North Africa.
Is there a difference in approach to the Lusophone, Francophone and Anglophone markets?
We have been focused on the Anglophone market. We have started to roll out the Francophone less than a year ago which is strange as I am French. We have hired people to cover those markets and have seen some interesting signs. Lusophone is very interesting one because Angola and Mozambique are actually different. They are two different markets. We see much more exports from Angola to Brazil and Portugal then we see from Mozambique. But there is definitely a link between Mozambique and Portugal and maybe a less of a link between Mozambique and Brazil then Angola and Brazil.
With the record label rush on Africa, will more people buy locally?
I set up Africori digital distribution 8 years ago in September. Our objective at the beginning was rolling out digital infrastructure to provide services for local artists to focus on the continent itself. It came from something simple.
Historically at the way music is consumed, isthe first biggest market is your local market. In Africa on average 70% of the music that is consumedis local. Of course in South Africa it is less - around 55 – 60%. In Angola it is 90%, in Ethiopia 90-95%, and in Nigeria 70%. On average across the continent it is 70%.
What we have seen in the last few years is the digital market growing much faster outside the continent. With the growth globally, our shares come from outside the continent. This is increasing every year quite drastically to the level where the majority of our revenue is coming from outside the continent.
And that is the beauty of this digital market where we have removed a number of historic gate keepers, where now independent artists can easily connect with fans on a global level. There has been a study from MERLIN (the association of independents) which shows how independents now generate more and more revenue outside of their borders which was much more difficult before.
Is it a competitive market or is their space for collaboration?
The market has become highly competitive. There is a huge number of distributers and there are the majors. The majors – EMI Sony and Polygram (Universal today)left Africa over 30 years ago, in the early 80s. They left Nigeria, Kenya and Ghana. They had offices in South Africa overlooking those markets, but there was never any focus.
To see them coming back now is very good. Any investment that is put into artists and the creative community is welcome. What is amazing now is artists have the choice to decide how they want to develop their career. They don’t have to sign with a major. They can access the global market with players like us. There are alternatives such as international distributers rolling out on the continent. All of them are here. Some in more markets then others. That is definitely welcome, although it is not collaborative. We are all competing with each other. We collaborate with different players across the value chain, but we don’t collaborate with the competition.And that is great. There is a lot of talent on the continent. One doesn’t have to work with all the talent. You need to just make sure that you work with the talent you believe in and you have a vision for, and that is how you grow your business.
Is it about looking for the hit song?
There are different models.
1. You have the label model. A lot of labels are artist labels to develop their careers.
2. Then you have the independent labels signing a few artists and with small catalogues.
3. And then you have the majors who tend to look at key artists.
4. Then you have the model of the distributers like us and other companies and within this you have different models.
4.1 You have distributors working with a huge number of clients where the service they are offering is to make sure your music is accessible to the stores. This is a low-end service.
4.2 Then you have companies like us.This is a hybrid which focusses on a much smaller number of releases and artists and try to accompany them on whatever cycle of development they are in. It is more than making sure the music is available on Apple, Spotify or Youtube and monetising. It is also to help them elaborate a digital strategy around their releases.
Are you expanding your signing of artists?
The deal with Warner and ADA (Alternative Distribution Alliance) allows us to develop our presence on the continent and be more supportive and invest more in the creative community on the continent.
The second thing is, we remain independent and have our own infrastructure but now we have access to a partner for our releases with international potential that can support us around the world.
It is like having the best of both worlds. We have the independent structure which brings flexibility and agility where we operate as a service. We don’t own any content – we provide a service to artists and label.
But, at the same time when we see that an artist or song shows potential internationally, which today we can see from data, we are able to leverage infrastructure in 60-70 countries around the world and are able to give added value to our client. This is unique.
Most of the time when you sign to global distributers and majors, you are lured and promised to have a global reach through their network. The problem in my experience is they can offer you this but often you get lost with the other releases from around the world.
In this project we are a dedicated team focused on African music. We have been focused on African music for years.What we do is we leverage infrastructure making sure that we drive the development on a global scale for the project that has the potential.
We have one at the moment which is phenomenal. It is a song that was number one in South Africa in December 2019, 6 months ago and is taking at the moment the world by storm. It was a song that was not expected to reach a global audience. The song is Jerusalema from Master KG. It is a gospel dance track and we are over 100M streams already. It is crazy. The lyric video is on 10M streams, the dancers are dancing around that music in Romania and Portugal. We are top 10 in Brazil and France. We were number one in many areas on Shazam in China. It is unbelievable to see a project in a local language in SA, not in English, connecting to a global audience.
I can guarantee that this is the biggest song coming from Africa this year. We can see how the growth is maintaining at this moment. And that is the perfect example of how with the Warner partnership we are able to pull out resources in key markets around the world to support the work which we and the label Open Mic an independent label from SA are doing.
Do streams add up to real money?
Yes if millions of Rands is real money. It is because of streaming which represents more than 50% of global revenues around the world that is why the music business has never been in such a good place. There will be challenges. Today’s business like any business has to reinvent itself all the time. It cannot just stay static. We have new platforms popping up. We had TikTok a year ago. We have Thriller from France, very big social media platform. The way people are connecting discovering and consuming music is changing so we need to make sure as an industry we change and not be as static as the industry was in the 90s.
Are genres also changing?
It is discussion happening as we speak. I think that some of the labels in the US have decided to drop the term urban music as a way to describe their black music division. A letter was sent yesterday to a number of executives of the music business in the UK to change.
We work with streaming services so we have got a whole genre mapping because there are a lot of sub-genres. It used to be that all African music was world music a few years ago. Thanks to key players like Apple in Africa and other key players around the world they were able to open up a number of different genres. We had gospel coming from Africa, deep house andhouse and all the sub-genres of dance music. We have maskandi. There is a maskandi playlist on Apple; where-ever you are in the world you can access it.
The people who navigate through this music, know what it is. When music crosses over in a genre - it reaches a wider audience.By nature the music will start to appear in cross-over sections of the music offerings. Today, besides what is happening on social media, a lot of the music discovery happens on playlists on those streaming services. There are different playlists curated by professionals and individuals on Apple. Some of them have big reach; some reaching 500 others reaching hundreds of thousands consumers.That is the way the music tends to be discovered or shared in the new eco-system.
We are about to launch the biggest gospel artist in Nigeria.
Is there still a space for live music?
This is changing in the short to mid-term because of the situation and also depending on the size of the venues. I don’t believe that live music is going to disappear or be reduced. People love it for obvious reasons. It is a great way to experience music across fans and people who share the same passion. I think what we are seeing are new opportunities that didn’t have the momentum before Covid. Those are about online live shows and how you can connect and interact online with a global audience as an artist. And, people are monetising it through different revenue streams.
The impact of Covid has been really about the fast tracking of how we consume digitally. The digital transformation has received a real boost. People who were not using video conferencing are now using it. People who were not working remotely are now working remotely and understanding how to interact. People who were not using Netflix or Showmax have now been subscribing. We have seen growth in digitalconsumption across the board from online delivery to the way we buy to the way we interact in the digital world. That is creating a number of opportunities and fast-tracking opportunities in the music business in terms of how to interact, discover music and operate in a digital world, from the business, art and creativity side. People are having more time to grasp new tools that existed before but it was not a priority before.
Where would you like take your business in the future?
We are behind the success of a number of artists across Africa and globally. The success of our client is our success. It is not always obvious.
For ten years I was working for the majors and one of my main tasks was to coordinate and implement marketing activities across the world for major artists and developing new artists. And with some success.
There is nothing that excites me more than to see artists coming from the continent having real global success – 100M streams – and shaping the creative community on a global level. Interacting with artists from South America, Asia and Europe. That is one goal.
The second goal is to see the real potential, digitally of the continent as a viable strong growing market.This will change forever the creative community on the continent. Not just in terms of artists, but the photographers, video directors and graphics. Once we see the market growing there will be more revenue being poured across the value chain and across all the different parties active in that space. That will really bring the much more professionalism. And I would love to see Africori being a major player in that space.
How will we resolve the issue of corruption in Africa?
There are movements in the market that might take time, but they will change and create a healthier environment. When we started, a lot of the local digital stores in Africa had this view that they had to sign artists exclusively.This created a real problem for us as we are a business to business service between a number of stores and artists. I can tell you that being in Nigeria and spending a lot of time there, this didn’t make sense. A year and half later they decided to stop. They realised it didn’t work.
There are movements that seem sometimes to be unique to our environment and time changes it. There is a reason why we operate. If you add value, then you have a reason to exist. If you don’t add value, there is a time limit. Especially now, the digital ecosystem which I have been part of for 23 years, allows people to compete.It shows that if you are not transparent, the system will disrupt you. If people see the other company gives live access and reporting that is transparent and you can see exactly where you made the money and exactly where the percentage goes, then it is less opaque and then there is less corruption and mismanagement.
Even the collecting societies, if there are issues in other places around the continent then it will be disrupted by players from Africa or international players because people have access to information.People are becoming more and more knowledgeable about the business. It is going to be much cleaner than it was because of the environment we live in today compared to 10-15 years ago.