334.2% - Africa as an Emerging Market

With increased smartphone penetration and the advent of streaming, major entertainment companies are looking at Africa like the gold mine that it is. Adam Granite, President of Northern & Eastern Europe and Africa at Sony Music Entertainment, says: I think what really excites us is the fact that we’ve not really turned on the emerging markets when it comes to paid streaming, and when you start to do the math, when you look at some of those countries with mass populations, that’s very exciting.” South Africa streaming revenue increased an amazing 334.2% last year. Although the physical market remains important in the country, there are already over 250,000 paying subscribers on streaming services and it is expected to grow.

“With Nigeria and West Africa, we think there’s a huge opportunity for our catalogue there. We also firmly believe there’s going to be a global star that emerges from Africa. There’s huge potential for our catalogue to sell there, of course, but we believe there is repertoire, specifically from Nigeria, that can break internationally,” Says Granite. Nigerian artist WizKid was featured on the biggest selling track of 2016, Drake’s ‘One Dance’ and currently has a single called ‘Come Closer’ featuring Drake that has been circulating the airwaves, streaming sites, etc. Many artists have been releasing music independently and it is grabbing the attention of A&R’s worldwide. So expect to hear more of those new beats and rhythms, they’ll be controlling the summer.

Kobalt Goes Big

On Monday, Kobalt, a music services and technology company, received $75 million dollars in funding. Hearts Entertainment and existing investors Balderton Capital and MSD Capital have invested $75 million in Kobalt after it achieved a $700 million valuation.

Kobalt intends to be a company that stands out from the traditional record label models while still fulfilling artists needs and putting the artists first. The mission as displayed on its site reads "Making the music industry more fair and rewarding for creators. [He] wanted to give artists, songwriters, musicians, labels and publishers the freedom and transparency they needed to build their careers. 

CEO Williard Ahdritz said in a statement to Billboard, "With the high growth of streaming and the billions of micro transactions that take place per song, the music industry is more complex than ever. Guided by core principles of transparency, technology and putting creators first, I have never been more sure that our platform, combined with our global creative team, is the right one to serve creators and rights owners in the rapidly evolving digital music environment." 

Kobalt data shows that a typical hit song currently has 4 billion micro-transactions and typically hit songs are expected to grow to 10 billion micro transactions within 18 months. With that said the company wants to insure its systems can handle the exponential growth in volume and that is where the $75 million in new funding comes into play. 

Streaming data is changing the game. 

Billboard & Pandora Streaming Data

Billboard announced earlier this year that it now has an exclusive agreement with Pandora to include the service’s streaming data to the Billboard Hot 100 songs chart. When initially implemented the data positively impacted several songs. Among them were Rihanna’s ‘Sex With Me’, Bebe Rexha’s ‘I Got You’, and Rob $tone’s ‘Chill Bill’ that featured J.Davi$ and Spooks.

Pandora currently is the number 1 radio station in 87 of the U.S. markets. It represents about 10 percent of all radio listening. Because of this, the data gives an even greater insight into what listeners love and don’t love in respective genres. As Pandora has grown they realized the data collected would be extremely beneficial for the industry. They have shared data with music industry professionals and artists, direct-deal label partners and of course now Billboard. “With the inclusion of Pandora data, the Billboard charts that have guided listeners and been so central to the music industry for decades now reflect a truer measure of a song's popularity today. I'm thrilled that the 'Pandora effect' will now be formally recognized in the industry's gold standard for measurement,” says Pandora founder and CEO Tim Westergren.

Billboard also has been utilizing data from Next Big Sound since 2010 which we know was acquired by Pandora. It almost sounds like these 3 are trying to corner the market.