In Nigeria, Battle for Music Streaming Space Goes to Unexpected Places
uduX has partnered with GTBank to make its streaming platform available inside the bank's Habari app.
To make money in Nigeria’s music industry, Chidi Okeke is chasing it at the source: the bank.
Last November, the entertainment and technology investor launched uduX, the first made-in Nigeria music streaming service, and partnered with one of the largest banks in the country for the platform to be available inside the bank’s app.
The streaming platform will be fully incorporated into the Nigerian music market as a stand-alone app in the coming weeks, Okeke said Monday at the Midem African Forum in Lagos.
Through GTBank’s Habari app, a platform for shopping and lifestyle content, uduX, whose name derives from a musical instrument played in Nigeria called udu, will gain access to a community of 16.8 million users.
In an interview, Okeke, CEO of Groove Platforms, which created uduX, said the deal partially fixes one of the significant challenges that numerous streaming platforms now face in Africa: how to make people pay for music.
Since consumers have already entered their banking information, they can subscribe to the streaming platform in a few clicks.
"I want to get people to pay for my service and for that, I just needed to be close to where the money is," Okeke said
The partnership with the bank also gives the company access to some customer data, including details on subscribers’ ages and location.
"We know how they spend their money, so it’s easier for us to target people," said Okeke, whose goal is to get one million subscribers by the end of 2019. A uduX subscription costs $1.40 per month.
UduX enters a market where African-made streaming apps are facing competition from the U.S., EU and China. Earlier this month Chinese-backed Boomplay Music said it had secured $20 million in Series A funding to continue its rapid expansion across Africa. Boomplay, with 5.6 million daily users, says it hosts an online African music catalog with 5 million tracks, aided by a multi-year licensings deal it signed with Warner Music Group in March and Universal Music Group last year.
Last week, uduX said it had signed a licensing agreement with Universal Music Group. UduX says it hosts a catalog of 2.4, million tracks, which includes African as well as global recording artists.
The fact that a bank has joined the streaming industry illustrates the specialized nature of the music market in Africa's most populous country. MTN, a South Africa-based multinational mobile telecommunications company, has over 60 million subscribers in Nigeria, and also has its own music service, music+.
Kelvin Orifa, a marketing expert and former consumer segments Manager for MTN Nigeria, said successful streaming platforms in Nigeria will leverage their subscriber bases . "The survivor of those platform depends on the community they can build," Orifa said. "MTN used to sell airtime. But we ended up being the biggest distributor of music, because he had a community."
More than 500 million African citizens will own smartphones by 2020, according to the GSM Association. No matter which platform succeeds in Nigeria and elsewhere on the continent, it will have to bend to the local reality, said MIDEM director Alexandre Deniot. Many platforms already offer both daily and weekly subscriptions.
"The way of thinking in Africa has to be different than other places," Deniot said. "Sometimes subscribers will pay one week and the one after they don’t have the money. You can’t just say: if you don’t pay I will cut the service. They need to be flexible."