Here is why Apple Music’s deal with Cool FM is an interesting third step in a long play [Pulse Editor’s Comment]
In Nigeria, around 60-70 million Nigerians download music, but over 75% of Nigeria listens to and consumes music via radio.
A report by Pulse Nigeria reveals that the shows will be broadcast every Saturday and Sunday at 6pm starting on January 16 and 17, 2020 respectively. Already, Rap Life Radio is broadcast every Saturday while Africa Now Radio is broadcast every Sunday. Cuppy’s latest guest would be Marlian Music artist, Zinoleesky.
Why is this interesting?
Once again, that move underlined Apple’s intention and awareness of where the world is headed. The future is tech-led and key to that is data and data can only be easily managed by the internet. Also key to that dynamic is market share and control - as rapped by AQ on ‘No Pensions.’
In Nigeria, Apple Music reportedly rose to a neck-in-neck battle with Boomplay by the end of 2020, with both companies boasting around 140,000 subscribers each. In Q2 2020, Apple Music made a clear statement of intent by expanding to 37 African countries while offering a six-month trial period, upon registration.
However, only the company with a core understanding of consumer behaviour, demographics and consumer interaction will control the future of the Nigerian - and the larger African - dysfunctional music/entertainment markets.
Transsion already laid down the gauntlet by controlling the phone market in Africa with phones that offer important features like better battery life, great processors and relative durability at cheaper rates. In 2018, the company sold over 120 million phones in Africa where 90% of the smartphone market is Android users.
This helped the company to have a manufacturing plant in Ethiopia and launch Boomplay, a music streaming service. Apple looks quite far behind Transsion and Boomplay on brand equity, but the war is far from over.
Nigeria is the most populous African country and therein lies potential. This deal with Cool FM will likely be the first in a larger play at understanding consumer behaviour, demographics and consumer interaction.
How will this work?
Cool FM, a subsidiary of Steam Broadcasting Communications is one of the largest radio networks in Nigeria. It broadcasts in four states, across demographics and languages with different consumer behaviour and different types of interaction. Cool FM’s parent company also runs the internet original content platform, Clout.
In 2017, Geopoll reported that Cool FM controlled a whopping 8% of the Nigerian radio audience.
On August 18, 2020, Apple Music announced an online radio entity called Apple Music Radio. During the announcement, Beats 1 became Apple Music 1 while other channels like Apple Music Hits, Apple Music Country and a number channels were introduced.
Apple Music 1 is led by cornerstone presenters Zane Lowe, Ebro Darden, Brooke Reese, Dotty, Hanuman Welch, Matt Wilkinson, Nadeska, Rebecca Judd, Cuppy and Travis Mills.
Interestingly, the new Apple Music Radio also came with direct listening interfaces to Nigerian radio stations like Cool FM and Beat FM as well as other stations across the world. It was Apple’s first major announcement of its intentions for radio.
This is important because as much as the internet is now pivotal to humanity, offline entities like radio still have as much power.
In Nigeria, around 60-70 million Nigerians download music, but over 75% of Nigeria listens to radio. Radio also remains the major ground for music consumption in Nigeria. You can check analysis on TurnTable Charts for more info. A lot of reports make it known that radio remains the primary source of music consumption in Nigeria.
During a 2019 conversation with The Breakfast Club, Label Exec and UnitedMasters Founder, Steve Stoute said, “Radio will never be obsolete, radio will just need to be consumed in different formats” and he was telling the truth.
Apple knows that. Internet radio like Apple Music Radio, which is integrated into the Apple Music app is some years of genuine acceptance. Apple Music itself is struggling to gain subscribers in Africa’s most populous nation due to poverty, high internet access costs and a habit of avoiding payment for online service.
Yet, radio culture is imperative to Apple’s quest to control the music market in Africa and the world at large. If you can understand and interpret the Nigerian interaction with radio, it could do wonders for Apple Music and its pricing strategy, its UI/UX, algorithm - which is average at the moment and so forth. It could also help the company to create better Africa-centric products.
Is there a precedent for this?
Yes. On April 28, 2003, Apple launched iTunes Store and a little later, it struck a deal with Best Buy. Best Buy, then a high flier, was the first third-party retail seller of Apple's iPhone.
On February 26, 2008, the iTunes Store surpassed Best Buy to become the second-largest music vendor in the US behind Walmart. It then became number one on April 3, 2008.
By March 2012, Nigam Arora reported for Forbes that, “Apple is sucking profits out of Best Buy. Best Buy does not talk about the subject because it needs its contract with Apple to drive traffic to its stores even though margins on Apple products are slim…
“For years, Best Buy relied on music CDs and DVDs to drive traffic to its stores. The most prominent and the largest amount of floor space used to be dedicated to CDs. Not only were CDs profitable, they helped Best Buy sell all kinds of other electronics to routine CD buyers.
“Then iPods and iTunes killed the CD business.For a while, Best Buy was driving significant profits from high-end phones. Then along came the iPhone. Best Buy had lower margins on iPhone. iPhone also killed momentum at Research In Motion (RIMM), whose products were helpful to Best Buy.
“Further battering Best Buy was the spread of Apple stores. Apple stores were a thing of beauty, more fun and the staff was knowledgeable in comparison to Best Buy stores.”
In September 2014, Apple also acquired Beats Electronics for $3 billion. While it felt like a glamorous acquisition at the time, it was about the Beats Music Subscription Service. Around a year after acquisition, Beats morphed into Apple Music.
In April 2020, Michael Simon argued that, “Over the years, Apple Music has basically extinguished any trace of the soul of Beats Music…
"Apple Music is most definitely a product for Apple users. Yes, there’s an Android version, but Apple doesn’t market Apple Music to buyers of the original Beats in any way. In fact, you won’t even find a single mention of it on the Beats by Dre site.”
In his spectacular article, which offers a relatively veritable addition to the foregoing, Simon breaks down Apple’s continued quest to ‘erase’ Beats.
Bottomline is that Apple offers mutually beneficial situations and deals before moving to dominate. It definitely looks like radio is key to dominating the African music/entertainment market.
Apple isn’t the monster. In fact, Apple is brilliant for the way it goes about things. These acts might seem ethically disturbing, but they are more than fair in the business world.
Why is the Nigerian music market important?
As noted earlier, Nigeria is Africa’s most populous country with 200 million people, and that is currency. Statistica reports that over half of the Nigerian population is under 19 years old. That's a lot of tech-savvy people, with a strong attraction to social media. Their relationship with payment is also projected to be different.
While Nigerian music is currently faced with a lot of structural problems, internet entities will be key to solving a lot of those problems. From the look of things, Apple Music wants to be at the forefront of that battle.
In 2020, Apple Music surpassed Spotify in terms of paid subscribers in the US and its subscriber base keeps growing. Platoon is helping Apple to gather catalogue - a front which currently makes the company subservient to major labels, who own the extensive discographies.
Apple Music also continues to make strides on the publishing and licensing frontiers with deals with artists like Chance The Rapper. In 2019, it hired Lindsay Rothschild, the former head of songwriter and publisher relations at YouTube as Head of Creative Services and Music Publishing for North America.
At this time, the aim is for internet entities to be a one-stop shop for production, recording, publishing, distribution, sale, aggregation and broadcast of the music as well as integrated consumer interaction and payment points. In essence, Apple Music - and Spotify - aim to become record labels and then some.
In a 2020 article about the global state of music, this writer enthused that, “In the old days, record labels had a lot of power. To get music out, they indirectly controlled all the four fronts of music - records, publishing, distribution channels and points of sale.
"The records were coming from them, so they had a leverage on what goes where and how it gets there - down to the trucking companies that used to transport records in the 70’s.
"With the advent of the internet, those powers have been slashed. They still very much have the power in catalogue and the origin of records because most artists are signed to majors or their affiliates, but they now split those powers with streaming platforms who are now a one-stop shop for records, publishing, distribution - to a little extent - and points of sale.”
When Apple Music Radio launched, one thing that really stood out was the influencer-led strategy to certain shows.
Public figures like Aitch, Kerwin Frost, HAIM, Lady Gaga, Nile Rodgers, Travis Scott, Young M.A and many more joined old shows by public figures like Action Bronson, Billie Eilish, Elton John, Joe Kay, Lil Wayne, Frank Ocean, Vince Staples, and The Weeknd.
This marked the maturation of shows like the Drake-branded OVO Radio and Nicki Minaj-led Queen Radio. After what Tory Lanez achieved with Quarantine Radio during the lockdown became a reality, this model became more imperative. It showed how easily public figures transition into influencers - powerful figures in today’s tech-led world.
In the current world, 70% of teenage YouTube subscribers say they relate to YouTube creators more than traditional celebrities and 40% of millennials believe their favorite creators understand them better than their friends. Tory Lanez proved that celebrities can move like creator’s and it means a jackpot for Apple Music.
In five to 10 years, Nigeria and the rest of Africa will likely see internet radio in a more attractive form. It’s a long game, but it has definitely started. Within the next five years alone, Apple will poach a number of popular Nigerian OAPs.
However, this doesn’t mean that radio will simply turn over and die. Traditional radio stations will just have to create veritable internet alternatives like internet stations and podcasts to compete in the longterm.
Send the word out; Apple - Music - is coming for Nigeria/Africa… big time!
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