Nigerian films were once considered the country’s most important cultural export. But ask anyone these days, and they’ll tell you it’s Afrobeats. It has birthed world stars from Nigeria and a Netflix documentary. The genre is gaining worldwide appeal, with a Grammy Award for Burna Boy and Grammy Awards considering an Afrobeats category. So there is a lot of money to be made if you find and finance the next big Afrobeats star. That argument has led to many failed record labels. Still, some argue that the real problem is that the record labels are restrictive. They believe that a newer, more democratic way of funding artists is a viable model.
But let’s step back and see how much money is on the table. Nigeria’s “Big Three” are Burna Boy, Davido and Wizkid. This article estimates Davido’s performance fee to be $300,000, while Burna has a $500,000 filing fee. These rates are exclusive to “passengers,” an industry term that refers to a variety of requests artists make for private jets or booze-filled lavish rooms.
Ready to bet on the next big star?
The idea that listeners and fans should fund the creators and artists they believe in is a familiar one; Platforms like Patron, Indiegogo, and Kickstarter allow musicians to quickly raise money. In a competitive music industry, artists need more than talent and a great team to succeed. Finances are essential if you hope to break through the noise, and this is where platforms come in. Patreon, for example, allows the artist to provide exclusive content in exchange for the money raised. Amanda Palmer, a musician on Patreon, has eight fan membership levels, ranging from $1 to $250 per month.
In Africa, these platforms have yet to find popularity. It’s tempting to say that disposable income in Africa is low and cite that this is a continent where we’re still struggling to get people on Spotify. What is closer to the truth is that Africa is a different market. Knowing the quirks can be the key to the success of these “finance an artist to earn royalties” models.
Will you fund artists for a chance to earn part of their royalties??
This week, Artsplit, the art investment company, announced the launch of MusicSplit. It’s a product that allows fans to buy shares of songs by Afrobeat artists, starting with KingPerry. The company says: “It’s a win for everyone; your favorite gets the funds needed to create great music for your enjoyment, and you get passive income and high-yield returns from the project’s streaming revenue.”
This idea of funding songs or artists for profit is familiar in Africa. In 2021, TechCabal wrote about Mr. Eazi after the musician tweeted that for his next album, he would allow his fans to buy stock for the songs. According to his tweet: “Imagine you have a % of my latest song with Nicki or my new single “SLOW” with Jbalvin! As you stream, make it a hit, some of the $ comes to you! But most importantly, you are a true part of the Global Smash Hit that you helped create.”
The complex mathematics of royalties
Mr. Eazi’s proposal was for his fans to buy “shares” in his songs and then split the proceeds from the royalties with them (here’s a short article on the types of royalties in music). Although it is unclear if Mr. Eazi went through with his experiment, this could have been a good deal for fans of him, given his popularity. And this is where it gets tricky for lesser known artists. And this is where it gets tricky for lesser known artists.
Edwin Madu, a musician and now a label owner, tells TechCabal that “streaming royalties are not the money-making game that a lot of people think they are. You’ll need to get into the million stream region to earn anything decent.” The exact math of streaming royalties also differs depending on where the streams come from or whether users are on paid or free plans.
What is clear is that ROI is tied to the ability of artists to grow a community of loyal listeners and channel that into increasing their streaming numbers. According to Oyinkansola “Foza” Fawehinmi, a lawyer and entertainment business executive, this business model will work for performers ready to do the job. She argues that these artists have something else on their side: the emotion that art evokes.
Throw out the math; art is emotional
According to Foza, Nigerians have supported and financed offline artists and creators. “Native Magazine grew thanks to its community; people signed up and they were able to grow over the years. The alternative music movement is another example: funding or supporting artists you love has always been one thing, technology and platforms are just putting a name to it.”
But she points out that while technology provides the platform, ensures accountability and solves the math of projecting each artist’s future earning capacity, there is an intangible element. “The artist appeals to the emotion of the people so that they come and support her art, and art is emotional.”
The range of emotions displayed at concerts makes his point easy to understand. Beyond being good at music or discussing the division’s business model, success will come down to artists’ ability to turn those screams and tears of excitement at concerts into hands willing to open their wallets for finance the next big Afrobeats star.