Forget live shows, real money is in streaming

“What most people don’t know is that right now, most money is in music streams,” Nikita Kering stated with assuredness.

The songstress was responding to a question during a Spotify-organised brunch in Nairobi early this year.

At the time, data from the Swedish streaming platform had ranked her amongst the top 10 most streamed artistes in Kenya in 2022.

That same year, her hit record ‘Ex’ had made it onto the list of top 100 most streamed songs in Apple Music streaming platform.

In a month, Saturday Nation understands that the 20-year-old collects an average of Sh300,000 worth of revenue from streams, and the purse gets even juicier when one has a record (s) on high rotation as was the case with ‘Ex’ in 2022.

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Diamond Platnumz, arguably the top East African artiste cashing in the most from streams, has in the past confessed to collecting more money from digital sales than from performances.

“There is money in streaming music. There are many (streaming) platforms but Apple Music is the one that has a bigger payout,” he said, responding to a question from Wasafi FM radio presenter Lil Ommy, who sought to know where the singer generates most of his income from.

The musician went on to illustrate.

“It’s not true (that YouTube pays the most). Let me give you an example, from my estimates, if you get one million views on YouTube, you get between Tsh600,000 and Tsh1 million (Sh35,00 - Sh58,000). However, when it comes to iTunes, a million downloads yield about Tsh2.5 billion (Sh145 million).” 

A month ago, Noriega Reginald,  who is former Otile Brown’s manager, ranked the artiste amongst the highest royalties earners in the country from streaming revenue.

“If you go to YouTube, who has more numbers? If you go to Spotify who has the most numbers? Go to Boomplay, who had the most numbers in a span of two years? Because the more the numbers, the more the business, the more the revenue. I don’t want to say he is the top artiste, but I’ll tell you if do your research, whoever has more numbers on their platform is the one making more money,” Norieaga argued.

It’s an open secret that Otile has been among the top five most streamed artists in the country across all platforms in the last five years or so.

It also needs no saying that for an artist to get these numbers, and money thereafter, one has to get their music out.

This is where the aspect of music distribution comes in. With over 200 streaming platforms in the world, an artiste can’t reach out to all of them, hence music distribution becomes key. To make money, one has to get their music out there to ensure the widest reach.

With physical distribution now phased out, where an artist had to walk to a radio studio with a vinyl or cassette to request for airplays or physically distribute compact discs to the masses, digital distribution has taken over.

These digital distribution platforms get an artist’s music to major streaming services such as Spotify, Apple’s iTunes, YouTube and others.

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Whereas there are digital platforms that an artiste can access, most streaming services do not allow uploads directly from artist(s), leaving one in need of a digital service provider/distributor (DSPs).

This is because the DSPs checks quality control and manages royalties payout. Most streaming platforms service high volumes of artistes’ content. For instance, Spotify alone has an estimated 11 million artists, additionally, 1.8 million songs are uploaded on the platform annually.

Part of DSPs’ job, other than quality control, is report all earnings every month and wire payments.

On a daily basis, other than formulating promotion and marketing strategies, this is what Camilla Owora does from her glass walled office in Parklands, Nairobi.

The 30-year-old was recently appointed Ziiki Media East Africa Regional Manager. This is the largest digital music distribution company in the region, and is part of Warner Music Group.

Warner Music, with a market cap of $15.4 billion, and one of the big three recording giants in the world alongside Universal and Sony, acquired Ziiki Media in 2020.

“In the region, we work with some of the biggest names, the likes of Otile Brown, Khaligraph Jones, Bahati, Arrowbowy, Prince Indah, Diamond and his entire Wasafi artistes, Harmonize and his entire Konde-gang signees as well, Rayvanny, Nandy, the whole of King’s Music, which is Alikiba and all those under his label. It’s quite a huge catalogue,” Camilla explains.

To distribute their music to the large catalogue of streaming services at its disposal, Ziiki gets into contracts with the artistes.

“Our main job is putting artist content on different streaming platforms, that is your Spotify, Apple Music, Boomplay, Angami, YouTube... we get into contracts with the artists, those contracts give us the rights to distribute their content across 200 plus platforms globally and then collect royalties on their behalf,” she further explains.

Every month Ziiki collects royalties from all the streaming platforms as well as from ring back tones such as Skiza and pays out a lump sum to the musicians.

“I won’t give names, but I can confidently state that artists are making a living out of streams. On average, from those we handle, an artist easily makes 20,000 USD (Sh3 million) in a month.”

The purse could hold more, but a number of factors come into play, Camilla points out.

“If an artiste has a hit that is high on rotation, then the streams will soar, impacting on the revenue generated. Also, if the streams are originating from countries with high CPM (cost per mille) then the returns would be great. I always like giving Rayvanny as an example. When we look at his Spotify numbers, among the top 10 countries that stream his music, Kenya and Tanzania fall at the very bottom, he gets most of his streams from Europe, Australia and USA, which have high CPM returns,” she says.

Camilla observes the same with the likes of Otile Brown and Khaligraph Jones.

For artistes who opt to distribute content on their own branding distributors middlemen,  Camilla equates this to a wild goose chase.

“No matter how big an artist is, they can never have a wider reach than that of a distributor. You may access platforms that are accessible within your market, but that limits your listenership. But with a distributor who has a lot more resources and a system, you then get more coverage and partnership globally exactly where you want your music to go. Besides, with the mechanism in place, distributors will easily collect royalties for an artistes from all these platforms.”

Every month, once the royalties have been collected, the distribution system automatically generates reports and artistes see how much they have earned from their backend logs, then send an invoice to the distributor for cash out.

“For transparency purposes, whenever you are signed to Ziiki, you are given credentials to access your back end from where you can download your report and invoice and also keep tabs with your streaming data and financials”

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Payments are only made when an artist sends a signed invoice.

“Even though the system is ours, we are putting in the best practices. This business involves a lot of money and confidentiality. There are situations where artistes might have either changed territory, bank details, signatory and things like that. This also absolves us from any blames,”

For their service, Ziiki gets a share from the artist’s revenues.

“Like any other business, we get into partnerships, of course I can’t get into percentages, but it varies from one artist to the other. Why so? As we are now part of Warner, we also come in with investment opportunities. This means we advance artistes’ money for projects and work on agreements of how to recover it.”

Camilla observes that a lot of challenges artistes face are financial constraints as there are not many financing institutions willing to lend artistes money.

“We do this to help them be consistent with content production, so we advance them and then recover that money on a monthly basis from their distribution revenues depending on percentages agreed. But that is on a case to case basis,” she explains.

There are also scenarios where Ziiki fully finances an artiste’s project and owns the Intellectual property (IP) but the artiste gets a pie of royalties collected.

“An example is Cedo’s, Ceduction album released last year, we fully invested in it 100 percent, meaning we own the IP. With this we can do remixes, get collaborations, what Cedo gets in this case is the distribution percentage we have agreed on.”

Other than investments, there are artistes who approach Ziiki for distribution services only or distribution, promotion and marketing. In this case, these factors will determine the kind of contract both parties get into.

Streaming numbers of an artist, their potentiality also dictates the kind of contracts both parties might settle on.

“We do this by requesting artistes to share a detailed plan with us on what project(s) they intend to work on and then we work with them on those plans based on given business decisions.

To ensure artistes don’t feel exploited by some of the deals offered, Camilla says they encourage the creatives to run the contracts by their lawyers before committing.

“Our business model is longevity, and with artistes being our main clients, we do our best to guide them. We try to be very transparent and that’s why besides giving them access to their back ends, we always encourage them to run any agreements by a lawyer who understands the business,”

Ziiki says it also doesn’t stop an artist from terminating the partnership with them.

“You cannot stop someone from exiting, but then when you sign a contract, there are also clauses one has to abide by. We make artistes understand the legal ramifications should a contract be breached.”

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