Music: Out of Africa, the Sound of Pop's Future

-Billboard

UMG's acquisition of a majority stake in Kenya's AI Records is the latest deal this year that indicate the music industry is beginning to recognize Africa's potential as a music mecca and profit center.

For longtime followers of African music, the March 5 announcement that Universal Music Group had acquired, through its Dutch subsidiary, a 70 percent stake in Kenya's AI Records, brought the continent a step closer to joining the global marketplace for music -- and eventually minting international pop stars of its own.

The deal gives UMG access to one of the world's largest catalogs of East African music and, for the Kenyan label, partially solves one of several major obstacles keeping its artists from reaching a global audience. Through UMG, AI will be able to digitally distribute its artists' music to major streaming platforms, a boon for a label operating in a continent where Apple Music is not widely available and Spotify is not available at all. (Spotify is expected to announce its plans for launching in Africa later in 2018).

UMG's acquisition is the latest of a number of deals this year that indicate the music industry is beginning to recognize Africa's potential as a music mecca and profit center, with more than half of the continent under the age of 30. In January, global investment firm TPG Growth acquired a majority stake in TRACE, a leading Afro-urban music and entertainment brand in sub-Saharan Africa that owns and operates 30 digital and mobile services and seven FM radio stations. In mid-February, Kenya's Safaricom launched the subscription streaming service Songa, which reportedly houses a catalog of over 2 million tracks by local and international acts, and on Feb. 24, Play Africa Music, a Ghana-based online store that exclusively sells and streams African music, went live.

What the Universal-AI deal brings into tighter focus is access to an international audience. "Right now, you have some very localized services, but none that operate across borders and certainly none that are global," says Adam Granite, executive vp market development at UMG.

"The [African music] industry is still waking up to its full potential," says Sean Watson, managing director at Sony Music Entertainment Africa. "If you look at some of the African artists that have broken through to an extent, they have done so [through] European markets or the U.S., because we're not fully connected to the ecosystem. Once we are plugged into the global network that digital services provide," he says, "it's only a matter of time before we break our own superstar."

But before that can occur, streaming services will have to adapt to the idiosyncrasies of African markets, such as, says Watson, consumers' preference for buying prepaid phone and data credit as opposed to long-term subscriptions. There's also the sheer size and diversity of the place. "Sub-Saharan Africa, where we operate, comprises 900 million people and over 1,000 different languages," says Watson. "It's not as simple as [duplicating] what you do in South Africa in Nigeria."

Efe Ogbeni, a member of Davido's management team, predicts that African music will ultimately mirror Latin music's explosive success in the wake of "Despacito." "It's a lot of work," he says, "but it's going to happen."