Music has the power to move us, but for artists, the question of "how does it pay?" can be unclear. Spotify's annual transparency report Loud & Clear sheds light on the economics of music streaming. It details how money flows, where it goes, and who benefits, offering valuable insights into the financial landscape behind your playlists. This unveils exciting trends in the global music industry. Notably, Nigeria's music scene is experiencing a boom, as evidenced by these impressive stats:
- Streaming royalties for Nigerian artists on Spotify alone doubled in 2023, exceeding 25 billion NGN. (This translates to a staggering 2,500% increase since 2017)
- The number of Nigerian artists earning over 10 million NGN in royalties quadrupled since 2018.
- Over half of these royalties went to independent artists or labels, showcasing the democratising power of streaming. Despite these impressive figures, South Africa currently holds the top spot in sub-Saharan Africa music revenue as they’ve contributed 77.0% of regional revenues after growth of 19.9% according to the IFPI 2024 report. The question on everyone’s lips remains “Why Isn't Nigeria Leading the Revenue Race?”
This can be attributed, in part, to Nigeria's weakening currency impacting subscription prices and artist payouts.
Here's a breakdown:
- A Spotify subscription in Nigeria costs just N900 ($0.61) compared to South Africa's $3.18.
- For context, when Spotify launched in Nigeria in 2021, N900 was $2.19.
This significant price difference hinders revenue generation for the industry.
While South Africa boasts a three-year head start with Spotify, Nigeria's progress is remarkable. Launched in 2021, Nigeria already ranks 25th globally, with a daily stream contribution of approximately 5.8 million. This rapid growth highlights Nigerians' love for music and their growing adoption of streaming services.
Here's a comparison of daily streams:
- Nigeria: 6.2 million (25th)
- South Africa: 3.54 million (37th)
- Egypt: 3.53 million (38th)
- Morocco: 1.5 million (55th)
This rapid growth emphasises Nigerians' love for music and their growing appetite for streaming services.
Nigerian artists are dominating the home turf. Over 80% of the tracks featured on Nigeria's daily top 50 chart are for us and by us.
With the homebase support, Spotify has increased its promotional support in the country via playlists like Afrobeats Hits and African Heat, exposing Nigerian artists to a global audience and boosting discoverability. This exposure translates to more streams and potentially higher revenue conversion in the future.
This has brought about an increase in non-Afropop genres like Highlife and Fuji. Strengthening the diversity of the Nigerian music scene. With continued growth, increased access to streaming services, global exposure, and Nigeria's undeniable influence in Afropop, the country is poised to become a leading force in the African music market.