48% Would Consider Subscribing To Spotify, But Strong Market Competition Could Affect Opportunities
Nigerians are adopting mobile phones at an impressive rate, which is also making a strong impact on digital streaming. In Africa, combined with the Middle East, it was about 15% – which places the continent as the world’s second-highest growth market after Latin America. In a Geopoll 2019 survey, Nigeria led with 46.67% music streaming users being premium subscribers, followed by Kenya at 27.2% and South Africa at 25%.
Last month, Spotify expanded into 85 new markets, including Nigeria. Collectively, these new markets represent more than a billion people – a massive untapped audience for Spotify. Given the well-documented numbers, which suggest that Africans pay more for internet service than any other region, music streaming is yet to be embraced by the mass market. The average Nigerian already spends 73% of their income on food and beverage products, so purchasing digital content drops low on the list of priorities. Even for those who live above the poverty line, other factors come to play.
Experts surveyed by Culture Intelligence from RED, a leading think tank on media, marketing, and the culture, explained that with Spotify’s investment in music curation, artificial intelligence and cross-platform effectiveness, the brand is already built on a strong presence among young urban consumers in Nigeria. But strong competition could still dent market opportunities for the brand.
“There is serious competition in streaming now, and that benefits Nigerian consumers,” said an expert who leads a technology company. “For every successful platform like Apple Music, YouTube Music, Spotify or Deezer, there are those trying to raise their heads above water – Spinlet, Orin, Playfre or maybe needs more marketing, for example, AudioMack, MTN Music+. More music streaming platforms are entering the Nigerian market with better payment methods and cheaper pricing, so many big players will undoubtedly slash their prices”.
Most countries affected by COVID-19 declared lockdowns to contain the spread of the virus, which massively increased users live streaming via Netflix, YouTube, and Instagram. According to the Tencent Music Entertainment, the revenue from online music subscriptions increased by 70% in Q’1 2020. Additionally, the number of online music paying users touched 42.7 million, a year-over-year rise of nearly 50%. Moreover, the growing popularity of live streaming and the availability of local content on online platforms are propelling the market growth.
“There is serious poverty in the country, but the content market has never had a better moment,” another expert said. “Africa’s music streaming revenue is expected to hit a 12% annual growth that will see the market reach a volume of $822 million by 2024. Spotify alone offers more than 35 million songs, and has one of the best algorithms for music curation and social interaction among the streaming apps. Still, it is not coming here to dominate – at least, not yet. Tecno, Itel and Infinix has a very strong presence on the Nigerian market, and with Transsion (Chinese mobile phone manufacturer) pre-installing Boomplay into phones in the country, it’s going to make a serious dent on opportunities for Spotify”.
According to the downloadable report released weekly by the consulting think-tank, 48% of the consumer panel would consider subscribing to Spotify.
Culture Intelligence from RED supports companies, governments, and change makers with data-backed insight for evidence-based decision-making. It aggregates consumers’ ideas, opinions, and behaviours to solve problems and identify growth opportunities.
