If the battle between copyright and piracy seems one-sided in the United States, consider what a music market looks like in Africa. Piracy is everywhere.
Yet Kenya provides a good example of how a legitimate market works, and attempts to grow, under difficult circumstances. Pirated music and movies are nearly ubiquitous in Nairobi. In the center of this city of 3.1 million people, piracy is standard business. CDs typically cost 100 Kenyan shillings ($1.20). Some CDs have a standard 10 or 12 audio tracks, while many CDs offer dozens, often more than 100, MP3 tracks for the same price.
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Kenya’s digital music marketplace is mostly illegal and unlike those of Western countries. Take the popularity of the USB drive, the tiny storage device also known as the thumb drive. Kenyans fill their USB drives by buying MP3s in bulk at cyber cafes or, sometimes, the small shops that also sell music and movies. The going price is 200 Kenyan shillings ($2.50) for one gigabyte of music or 300-350 MP3s.
With the help of widespread smartphone ownership in Kenya, piracy has gone viral. Almost as common as stores selling pirated entertainment are small shops — often nothing more than a couple of tiny display counters — selling mobile phones.
Portable music is popular in Kenya, but even with mobile-phone penetration at about 80% in 2012, downloading large amounts of music files is cost-prohibitive using prepaid mobile broadband plans.
This may not seem like the picture of a viable music market. Piracy is rampant and culturally acceptable. There are few legal digital services and retailers. But Kenya exhibits how legitimate marketplaces can take many different shapes.
Professionals at the annual Kenya Music Week conference recognize piracy can help make a song popular. Once popular, a song will generate radio royalties — for the recording artist, songwriter and producer — and encourage music sales, and result in TV placements. Safaricom, Kenya’s dominant mobile carrier, sells ringback tones and downloads. Most of an artist’s revenue will come from live performances. Kenyan music companies, such as Homeboyz Entertainment, convert popularity into brand sponsorships.
Although consumers are indifferent about copyright, Kenya actually has a sensible system for collecting and distributing royalties. DJs are widely believed to set the trends and help determine what eventually becomes popular at radio. Artists give their songs to DJs in hopes of being played at clubs or included in compilations or mixes. Those compilations or mixes are heard by the captive audiences of matatus — minivans that operate as public transportation throughout the country. So it makes sense that DJs and matatus — and other commercial vehicles that play music-pay licensing fees to societies representing sound recordings and producers. Royalties are also paid on the sale of blank media, such as recordable CDs and USB drives, and public venues.
Overcoming piracy requires legal services that trump illegal options. Green shoots of just such a digital music business are starting to appear. Operating in Kenya and Uganda, Mdundo — Swahili for “drum beat” — gives mobile phone owners one free download per artist and charges 100 Kenyan shillings per month for unlimited downloads. Artists get 30% of revenue, low by Western standards but better than the payouts by mobile carriers, says Mdundo CEO Martin Nielsen, a Danish national. Artists upload their own music to the service. Nielsen insists dealing with rights issues for licensing would be far too costly for the small startup.
Mdundo is wisely tailored to the local market. Its 64 kbps or 128 kbps MP3s are low quality compared with those available stateside but appropriate for the majority of local mobile phones and prepaid mobile Internet service. The subscription price is reasonable for local incomes, and users pay with M-Pesa, a world-leading local mobile payment system, rather than credit cards.
Nielsen doesn’t believe Kenyans care if music is illegal or legal. The typical person acquires music in the easiest fashion, and there seems to be little public debate about copyright and piracy. Those conditions create a small opening for legal digital services, built locally for local markets, to create favorable consumer behaviors.