NET 2014 SPECIAL FEATURE: MTN BECOMES NIGERIA’S BIGGEST MUSIC DISTRIBUTOR
The music industry has, in recent times, expanded widely, with many corporate organisations actively participating in different ways. However, artistes still have several challenges, one of which is the problem of distribution.
The traditional means of music distribution, which involved hard copy sale and distribution of music materials in bulk, was rife with problems such as content piracy, so the artistes have slowly moved to other technologically advanced modes of distribution.
As the industry grows, telecommunications giant, MTN Nigeria, has achieved the feat of becoming the biggest distributor of Nigerian music in the country. The company achieved this through its highly subscribed ‘ring back tones’ (RBT) service, popularly referred to as caller tunes.
Launched in 2008 as a revenue stream for MTN, the Callertunez service has grown to become one of the safest and largest distribution platforms for music content in Nigeria.
Credit for MTN’s innovation goes to the company’s current Chief Marketing Officer (CMO), Larry Annets. He is the one championing MTN’s increased involvement with music and content, and insiders say he has personally supervised every music-related deal the network has entered into since he returned to Nigeria after a brief stint in the company’s Iranian branch. Annets took over from Bola Akingbade.
Since it is impossible for the songs on the service to be pirated or duplicated, Nigerian artistes are provided with a concrete means to monetise their content. The service currently offers Nigerians a library of over 12,000 Callertunez, offering subscribers the unique ability to personalise their ring back tones..
In the last two years, over 80 percent of Nigerian music industry earnings has come from MTN, Globacom, Etisalat, NB plc and other corporate giants who have made musicians wealthier through brand endorsements, shows and music downloads.
With just N50, the service enables subscribers to change the conventional ringing sound when he or she is called to a song of their choice, which entertains callers each time they call the subscriber’s phone.
According to MTN Nigeria’s assessment of the service, published on October 21, 2013, subscription to the service on MTN alone reached the 17-million-subscriber mark, a record yet to be beaten by any of the other networks.
Brands have often made it a point of priority to engage their customers through various initiatives and concepts, with the short and long term goals being to increase revenue.
Wale Oyegoke, Operations Manager of MTN, tells NET the purpose of the service goes beyond providing music.
‘Besides getting the music across to our subscribers, we were hoping to use this service to strengthen our relationship with our subscribers and we think that has worked out well’ he said.
Although solving distribution problems in the music industry wasn’t an initial objective for this service, it has afforded MTN the opportunity to effectively distribute music to a wide clientele.
Majority of the subscribers are young people who enjoy music and so it’s no wonder that this service has panned out well. Most young people prefer to listen to music on their phones and computers rather than the traditional ways, with CD and DVD players.
Another advantage that has made the ring back tune popular is the ease of accessibility: the music is just a click away. The time it would take to go to a store to buy a CD is saved.
The caller tune service has also helped artistes extend their music across Nigeria. A song may be a hit in one city, but is hardly known in another within the country. This service ensures that people from different parts of the country have access to a wider range of music.
The caller tune service is not exclusive to MTN. Other telecommunications companies: Etisalat, Globacom and Airtel, offer the same service with similar names at the same rate.
One good thing about the callertune service is that it isn’t affected by brand affiliation. An artiste affiliated with one network isn’t restricted from having his/her song as a caller tune on another network.
In 2013, MTN splashed N500m on signing on a handful of Nigerian celebrities as product ambassadors
For example, MTN ambassadors Iyanya and Wizkid also have their songs on other networks. In the same vein, Flavour, a Glo ambassador, has songs on the MTN service. So, subscribers can access their favourite songs no matter what network they may be on.
There are quite a number of technology firms that work hand-in-hand with the network to make this service available, including MTECH, Vas2net, GistMe and Betazoo.
Working with these firms, the artistes can accurately monitor the subscription to their music, thereby eliminating the possibility of piracy, unlike with the traditional means of distribution.
A source at MTECH told NET that this means of distribution of music may be the most transparent. There is a laid down process which is transparent to both the artiste and the company. ‘The remarkable thing about this is that there is nothing hidden about the process. All the parties involved can find out exactly how many downloads have been made and can account for how much value it transcends to financially’, the source said.
MTN scooped up Project Fame West Africa alumi Iyanya, Chidinma, Praiz and iMike in 2013
Some of the artistes that have enjoyed high rate of downloads on this service include Davido, Tiwa Savage, Wizkid, Chidinma, Flavour, and of course Iyanya. Records have it that Iyanya’s 2011 release ‘Kukere’ was the first song to cross the 3 million downloads mark. Released in December 2011, the song was one of the biggest singles of 2012.
A source who works closely with Iyanya reveals to NET that the singer’s total revenue from ring back tunes of all his songs was about N70 million.
Speaking to NET, Soso Soberekon, manager of MTN’s ambassador and A-list artiste KCEE, said that the callertunes has been advantageous in several ways. ‘Almost all of KCEE’s songs are on the album and they get downloads on a regular. Both Pull Over and Limpopo have gotten millions of downloads’, he said.
Another affiliate of KCEE’s Five Star Music, Harrysong, has become notable for making the Nelson Mandela tribute song that was announced the most downloaded caller tune in a single day, with over a million downloads on the day of its release.
In a recent interview with Punch, the singer said he has earned more than he could imagine. ‘The proceeds from the caller-back tune is actually worth more than N50m.Truth is, I was paid a lot of money…I can’t reveal the exact amount because we work as a team. So, all the money realised is shared among us’, he said.
Record labels are also happy with the means of distribution that the caller tunes provides. The CEO of Achievas Music (home to pop singer Solid Star) tells NET that the service is just another way of promoting music.
‘The main goal of a record label is to promote and grow your artistes while also making revenue from the music,’ Ossy Achievas said. ‘The caller tune service is helping in fulfilling those goals and that’s good enough for us’.
Who gains the most? Is it the artiste? Is it the telecoms company or the ICT firms that supply the service?
Bayo Adekola of Vas2Net says that it’s a mutually beneficial deal. ‘The artistes and Record labels need to get their music out there, and we are helping them do so in a more reliable means. The benefit is more than mutual if you ask me’ Adekola said.
Declining to reveal how the revenue from caller tune downloads is split, Solid Star said he is confident in the service. ‘I can’t really talk about the sharing formula but my label and the different telecoms company that use my songs have quite a workable agreement,’ he said.
All of the biggest artistes in Nigeria are exploring this service because of its advantages. Even upcoming artistes who are on platforms that have a little bit of push are also getting their singles on the caller tune service.
Jive, an upcoming singer, told NET that even without a video out yet, her song is enjoying significant downloads. ‘I don’t have a video yet, but I think I now have over a thousand caller tune downloads in just two months,’ she said.
Not only artistes and the telecoms companies are benefiting from this distribution platform, consumers are also doing so. Transactions are fast, as music is paid for and downloaded quickly and gratification is almost instant. Also, the payment systems are swift and safe.
More and more brands across different sectors are now using the power of creative content to embrace and engage customers, particularly young ones, but only a few, such as MTN and Etisalat have found ways to monetise such engagements.
Just like credible music distribution platforms like Spinlet, artists now have an additional and secure source of revenue in the caller tunes and are comfortably signing their new releases to the platform