Kenya’s music streaming platform Songa looks to increase its subscriber numbers with its new billing platform and eyes East African expansion

1 February 2019

Digital Content

The local music streaming space is ripe for the taking. The larger international platforms will find it hard to focus at such a granular level in the medium term. Russell Southwood spoke to the General Manager of one contender, Songa in Kenya.

Radio Africa Group incudes a newspaper and radio and TV stations including: The Start, Kiss 100, Classic 105 FM, East FM, Gukana FM, X FM, Radio Jambo and Bamba TV. In February 2017 its CEO Patrick Quarcoo said it wanted to “redirect its investments into the digital space.” Its media assets give it a good marketing platform for entering the digital space.

One of the first fruits of this strategy was a music streaming app called Songa which it launched in February 2018 in partnership with mobile operator Safaricom. Nigerian Chinasa Udeala joined as General Manager from Tecno’s music platform Boomplay in June 2018. He has worked for a number of the new generation digital music businesses including 360 Music Publishing in Kenya, Africori and Spinlet.

As Udeala told me:”Patrick (Quarcoo) had a vision of where music was going and although there were barriers like the cost of data, lots of smartphones were being bought and so he decided to build the app”.

The content on the app includes local Kenyan music, wider African music from across the continent (including South Africa, Nigeria and Tanzania) and international music. It has already signed a deal with Sony and is in the process of signing with Warner Music Group and Universal. There are literally millions of songs on the app and it promises that:” Songa's music editors and smart technology help you discover new music and songs that match your personal taste and emotion”.

s almost everywhere on the continent, local music is most popular:”The really popular music is local Kenyan music, what we call vernacular in Swahili and gospel music; then it’s Bongo music from Tazania; and thirdly, Afrobeats from Nigeria. Anything else is international music like Chris Brown. Even though there is a demand for international music, people predominantly consume local music”.

As a pay-for service, subscribers can buy into it at three price levels: Daily: KS5 (US5 cents); Weekly KS30 (US29.5 cents); and monthly KS100 (US98.5 cents). 85% of users are on the daily level. “People pay for things ‘small, small’ here. Economic factors play a huge part in how the market is developing”.

So what does he think the monthly disposable income for this kind of service is?:”That’s a hard one. My typical subscribers are the youth, students, unemployed or newly employed. I would say that the average Songa user spends 2% of their income to stream music”.

Launched in February 2018, within a couple of months it had got 240,000 subscribers through targeting Safaricom’s users. However, up to June 2018 last year there were problems with payment:”We had to fix the billing platform because people don’t use credit cards here. Between June and November last year we had a group of talented tech guys (with help from Safaricom) fix it”.

“We’re launching a digital campaign this week to announce our new, optimized online billing platform that uses airtime billing. In other words, you pay out of the airtime you’ve got loaded on your phone”.

The other big barrier in Kenya is the high cost of data:”I’ll give you an example. I spent a lot of time in Tanzania. There you can buy 10GB for a week for the equivalent of US$5. In Kenya, the equivalent costs US$10/12. If prices could come down by 50% it would make a huge difference”.

What’s the main difference for you between working at Boomplay and Songa?:”At Boomplay I was selling a free product and that’s easy. It was a breeze in terms of user acquisition. With Songa everything is paid for so it’s uncharted territory for me.”

Competition for Songa falls into two categories: other pay-for services and the free services based on advertising. On the free service the oldest and probably largest competitor is Mdundo followed by his former employers Boomplay Music. On the pay for front the main competitor Beats by Spice (known as Mziiki elsewhere), which is probably smaller than Songa. At the higher income levels in Kenya, people use Apple Music and Deezer:”I wouldn’t know how to put a figure on how many are using it but it’s widely used among all the people I know”.

Unlike many music streaming services in Africa, he’s happy with the revenue streaming deal that he gets from Safaricom. It’s not the 70/30 you’d get on iTunes but neither is it the 30/70 or 20/80 deals that gave the mobile operators such a bad name. Udeala says that transaction fees and Government taxes eat into net revenues but that Safaricom is open to the idea of improving the deal.

And where will Songa be in 2-3 years time?:”Songa will have made big progress from an access and reach perspective. We will be in Tanzania and Uganda and taking over East Africa as a music streaming service”.

Source: Digital Content Africa