MTN reveals earnings of $70m from African music this year
African mobile phone company MTN has in recent years staked a claim in the continent's growing mobile music industry.
According to recent figures, distributing music digitally in Africa has earned MTN Music over R944 million ($70 million) in revenues during the first six months of 2016 alone.
In a recent interview with South African news website Techfinancials.co.za, MTN Group chief digital officer Herman Singh explained that MTN has developed the capability to offer music to its customers in eight different formats: MP3 (full tracks), ringtones (true tones), caller ring back tones, streaming (music on demand), radio streaming, IVR radio, music subscriptions and music videos. MTN does not produce music, but instead earns income from music distribution via these various formats.
Africa’s biggest mobile phone operator has built a reputation in the African music space, said Singh, confirming that the company had hit $70 million in revenues for the first half of 2016. In the past few years, the Johannesburg-based mobile giant has grown into Africa’s biggest digital music distributor. Singh said MTN Music now has about 70 million customers in Africa, who download an average of 50 million songs across all of MTN’s music offerings every month. Many of these users come from West Africa.
MTN’s growth in the music sector has not always been smooth sailing, however. In February the company came under fire for not paying out royalties to musicians in South Africa, although this was quickly cleared up following an outcry from the Composers, Authors and Publishers Association (CAPASSO) and MTN soon signed a deal with Sony to expand their musical offering. In May this year, the Copyright Society of Nigeria (COSON) took MTN Nigeria to court for 16 billion naira ($80 million) - also over the alleged failure of the company to pay royalties to deserving parties - in what was dubbed 'the biggest copyright lawsuit ever in Africa'
The company is meanwhile also active in sponsoring music events across the continent. Among MTN's numerous musical sponsorships are the South African Music Awards (SAMAs), the Bushfire festival in Swaziland, the Project Fame talent search in West Africa and the CallerTunez Online Awards in Uganda. In October 2015 the company signed South Africa rapper Cassper Nyovest as a brand ambassador.
MTN was able to capitalize on having exclusive rights (for caller ring back tones) to British singer Adele’s hit ‘Hello’ (a major hit in Africa, judging by the number of cover versions), which was downloaded 24 million times by MTN users. But according to Singh, users of MTN’s music platform are increasingly downloading local music rather than international songs.
Source: Music in Africa 16 August 2016