By Lucy Ilado
Kenya’s music revenue is expected to accelerate faster than Tanzania’s in the next five years.
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| Kenyan artists are expected to reap from ringback tones. |
This is according to a new report by PricewaterhouseCoopers (PwC). The report presents historical data for 2013-16 and annual forecasts for the 2017-22 period in 14 entertainment and media segments for South Africa, Nigeria, Ghana, Tanzania and Kenya.
PwC predicts that Kenya’s music revenue will continue to grow over the next five years with the bulk of growth coming from recorded music revenue as well as mobile and ringback tones (RBTs). This is despite the fact that the country’s royalty collection system is not yet fully formalised. The presence of international music labels is expected to propel the market to surpass $35m in 2022, at a 9.8% compound annual growth rate (CAGR).
“Safaricom has a licensing agreement with Sony Music Entertainment for its Songa app and Mdundo is doing the same with Warner Music Group to add an international repertoire to its offering, which revolves around a catalogue of 40 000 artists from 37 African countries,” the report says.
Tanzania’s music revenue growth is also led by RBTs but the lack of music industry structures such as adequate content licensing systems and various challenges such as piracy and a reluctance to pay for digital music will add to a dampened revenue environment.
“Mobile revenue, overwhelmingly derived from RBTs, has rescued Tanzania’s legal music sector from decimation as physical sales decline, fast dwindling to a projected $700 000 in 2022,” PwC says.
Physical music sales in Kenya are set to decrease by 8.1% CAGR in 2022 from $6.9 million in 2016, whereas digital sales will increase by 16.3% CAGR to $27m in 2022 from $11m in 2016.
This growth is largely attributed to an expected improvement in Internet access, which will rise at 14.8% CAGR to more than $1.9 billion in 2022, ahead of Tanzania’s $793m in 2022.
Both countries will experience 0% CAGR sponsorship for live music during the forecast period. However, Kenya will see a 2.5% growth in live music ticket sales reaching $1.7m in 2022.
PwC says both countries will experience a boost growth in Internet advertising for the next five years due to more consumer spending through mobile devices, especially smartphones. Kenya will lead with total advertising revenue at $57m in 2022, at 11.2% CAGR against Tanzania’s $18m in 2022, at 10.5% CAGR.
Within the forecast period, mobile will remain the dominant music channel in both countries. However, Kenya will lead with a revenue of $27m at 16.7% CAGR ahead of Tanzania’s $5.3m at 16.2% CAGR, which is an improvement from $2.1m in 2016.
A further thriving source of revenue for both countries over the coming years will be TV advertising. Kenya’s TV market will grow at a 6.1% CAGR to reach $385m in 2022 ahead of Tanzania's, which will reach $183m in 2022 from $117m in 2017.
These figures make the TV market the largest contributor to total advertising revenue, followed by radio advertising and video games.
Source:https://www.musicinafrica.net/magazine/kenya-tanzania-expect-boost-digital-music-revenue
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