Music in Emerging Markets Part 2

And how has “the New Music Industry” affected SA? With lower Internet connectivity, the biggest winner in the new game is the cell phone. There are only around 6 million Internet users out of a population of 45 million, and only 700,000 of those with high-speed broadband connections, thus P2P file sharing is limited to the tech-savvy few, while paying for music content online is rarer still. Where there is more access to high-speed connections at work, companies tend to block sites which may cause a drop in productivity (such as Facebook).

The general consensus is that the ratios between the developed world and the developing world (the term “Third World” is so passé) are reversed in terms of mobile download vs online download (the extent to which people use mobile devices to connect to the Net and download to cell phones is still in its infancy). Thus, in the US it would be 9:1 (for every 9 Net downloads there is 1 mobile download), while in SA it would be 1:9 (the exact opposite). SA therefore exhibits the same trend as Asia – a very sophisticated mobile phone network with use of premium content sms/mms downloads for music, and/or illegal file sharing using Bluetooth capabilities, with the cell phone doubling as an MP3 player.

To this end, MTN, the second-largest cell operator which has now also moved into Africa (Nigeria, for example), is the content aggregator which is becoming a de facto new record label. MTN has teamed up with a local company to source new talent and plug it using the cell operator as an interface, in much the same way some have suggested that Apple may become the biggest record company in the world by 2015. Ironically, Apple has enjoyed only moderate success in SA with the iPod, iPhone and Mac, mostly because the country is used to PC and because of Apple’s prohibitively expensive price. It is thus viewed as an aspirational product.

The use of podcasts, vodcasts, blogs and RSS feeds to create, promote and share content is all but non-existent and in this area the market demonstrates a relative lack of sophistication. In terms of 360º deals, some music managers and booking agents are starting to combine resources to offer the “one-stop-shop” for clients and act as funnels for musicians, but this is also relatively new and small-scale. Unfortunately, the artist mentality of “a major label is gonna come rescue me” persists, with a few music entrepreneurs making a whack of money.

And what of the future? While it’s difficult to predict, US and UK mainstream music will continue to dominate radio airplay (Amy Winehouse selling 30,000 copies of her album in SA was considered a successful release), with quotas enforced to provide local artists with a voice. SA looks more like the US every day, tempered by local cultural conditions. It will be an interesting ride!

Rob Rodell is a singer-songwriter based in Johannesburg. He is currently doing his PhD on trends in music marketing and branding and is one of the partners of the Music Business Academy, a school aimed at addressing the skills shortage in the music industry in Africa while also empowering artists with music business skills. For details check out www.mbac.co.za or www.robrodell.com.