Safaricom Music Streaming App - Songa

safaricom

#1

It’s interesting to see how they’re progressing from being a Telco to this. I often wonder if there is a reason why bigger global telcos have avoided the music streaming business - no real money, plenty of support headaches.

A few years ago a friend launched Waabeh with the aim of making it the ‘Spotify of Africa’. As a small player, getting artists on board was a challenge, together with adoption and scalability. Here comes a telco with more resources and a bigger footprint so those two are a non-issue.

I wonder why they wouldn’t just partner with existing businesses instead of just copy and paste? :thinking: If they are really trying to support the youth as their academy claims, then why launch exact services in niche markets to compete with the same startups they say they want to support?

Here’s how I see this could work:

  • Artists get a bigger platform to sell their music.
  • People get access to music they otherwise wouldn’t find. Kenyans are willing to support artists but it has to be in a way that’s convenient. Would people pay $1 - $4.99 (KES 100 - KES 500) a month to stream their favourite artists? Probably.
  • All your music in one place - Hybrid (Offline + Cloud) storage beats offline only.
  • Ad platform - More relevant ads tailored to your tastes. Better than radio
  • Digital Radio in Future - They’ll have enough data after users join to determine if a telco digital radio platform would work

What it needs to be successful:

  • Ad Supported & Subscription Tiers
  • Seamlessly built app - Experience should be at par with leading music streaming apps
  • Secure Tech - Proper DRM (WideVine) so no support for rooted users
  • D.A.S.H. Protocol - allow streaming at Normal (96 kbps), High (160 kbps), and Extreme (320 kbps), depending on the subscription model.
  • Zero Rated Option - Paid subscribers data isn’t counted towards their music streaming

The Zero rated option might be their biggest incentive to attract users. Even if it’s zero rated for a certain period it will let users test it out while simultaneously allowing the telco to test its infrastructure. This might mean the telco would pay artists for any royalties due from streaming over this period - Free trial period etc - similar to what apple music did. Safcon doesn’t believe in providing free service.

To increase adoption of FTTH, they could give 3 months free subscription of upto 5 devices for any household that signs up to their FTTH.


#2

I wish I could comment on this but safe to say most of your worries have been considered. I personally look forward to the music app


#3

I am trying to see sense in this but I just can’t.

Deezer ($4.99, 40 million songs, 1 month trial) and Apple Music ($4.99, 30 million songs, 3 months trial) are popular in Kenya.

Kenyan music is not the most popular music in Kenya.

Artists from Nigeria, South Africa, Ghana etc upload their songs to Deezer and Apple Music almost immediately after release. Very few kenyan artists have songs on Deezer and Apple Music. (Then we will hear them complaining that there is no money)

The most ‘profitable’ digital distribution for Kenyan artists has been Skiza. Safaricom has been robbing Kenyan artists for years.

Safaricom has announced a 36 per cent increase in the amount Kenyan artistes will earn for music sold through its Skiza platform. Musicians will now earn 30 per cent, up from the current 22 per cent they get per song. - Standard Media

He [Collymore] also assured the more than 14,000 artistes enrolled in the Skiza platform that they would be paid like their international counterparts. - Business Daily

30 percent is not what international artists are earning. As far as I am concerned, this is a new money grab from Safaricom.


#4

Not really. Skiza is not very profitable. If you factor in the platform costs (Huawei), maintenance costs, distribution costs, marketing costs and other overheads (most artists sell their content to content providers) there isn’t much left. The tax man also wants his dues (26%). There is always some business numbers behind everything. This time the company has tried to step in and empower the artists by asking them not to sell their rights cheaply. Remember “Skiza” is a platform which Safaricom owns but it does not own the content, the music.


#5

This is why I quoted the word profitable. When it comes to actual earnings from music sales, Skiza is by far the most profitable for the popular Kenyan artists.

However, it is not profitable compared to other platforms outside Kenya.

I still think paying 30% to an artist is absurd.


#6

Please give us a breakdown for revenue split for the platforms you are talking about.
I guess many things depend on the model. For Skiza below is the breakdown:
CPs (who in turn pay the artists) - 30%
Tax (on airtime) - 26%
Platform provider - 19%
Safaricom - 25%.

We can compare with other platforms. Remember the platform owner incurs the expenses.


#7

I am not sure who the platform provider is and I highly doubt Safaricom is using a middleman to host & distribute the music. Safaricom gets to keep 44%.

Last year, Safaricom paid out 152 million. At the time, that was only 15% of the revenue.

Anyway, here are some platforms I found.

African Platforms

  • Mdundo pays out 60-70% of the revenue.

  • MTN operates a service almost identical to Skiza Tunes. I was unable to find their exact figures but they have artists earning over $200,000 per year from ringback tones.

International platforms

  • iTunes - 70% to labels (or artists)

  • Bandcamp - 85-90% to artists.

  • Amazon Digital Sales - 70% to labels (or artists)


EDIT: I recommend doing some research on MTN in Nigeria. Their service is very similar to SKIZA.


#8

Suspicion is not knowledge. The platform provider is Huawei. Safaricom keeps 25%. From the above info the platform owners (iTunes, Amazon, Mdundo) keep up to 30%. And I had previously said it depends on the model. For iTunes and Amazon they can pay out more since they own the platform, I imagine that’s the case with Mdundo.
We are comparing totally different models.
If at some stage Safaricom develops it’s own platform then it can afford to cut costs and pay up to 70% to artists but most Telcos don’t own their own RBT platforms, same to billing and CRM platforms.


#9

Maybe that’s where Safaricom should be innovating, reduce costs of platform and make it better for the most important people, the content providers and even possibly the buyers.


#10

Maybe safaricom will include a streaming bundle, for the app, will it be audio only or will artists also have video?
A welcome move, especially for vernacular artists who are also the biggest share of the skiza platform.
I don’t think the monthly fee would work for many Kenyans, maybe a one time purchase for each song at a few shillings,
would work plus many Kenyan artists do singles and not albums, I will wait and see


#11

Do you have a link to an article about Huawei’s involvement in Skiza?

I can’t seem to find anything on Google.

I’d love to read more about it.

I’d imagine Safaricom can easily build their own platform.


#12

Yeah. I think it will be include streaming.

MTN has a similar service -> Music-plus. It is actually pretty cool.


#13

My assumption is that by the time they roll out they have studied various models, weighed in the pros and cons of each, then decided which approach works best. That’s the ideal way. Well find out which one their way is.

I assume that by now they have learnt from the kind of unforgiving feedback they get from Kenyans.


#14

You have so much faith in Safaricom.

I will be waiting for the music app, hopefully I will like it otherwise…


#15

@TeriWanderi greed 100% . Your opinion seems very well thought out. But (no offence) a large coprporate, being a large corporate, will probably screw it up in some way. it almost sems as if they never do thorough tests of products and end up having a bunch of half baked products. (how many voice and data products have they conjured in the past year or two none of which seem to have gained traction?) Internet is not as ubiquitous in kenya as it is in other more developed markets. I hear so many references to spotify, apple music, netflix e.t.c but these services are a hit in whichever markets in part due to the fact that there is fast, cheap internet which is simply throttled once the user surpasses their monhly data allocation. Most people have to deal with bundles!!! In a best case scenario supposing Safaricom plays by your script, fine. But if they don’t couple it with a free or heavily subsidised data package then it means most people will use it if they have access to a free wireless network. Alternatively, they will use broadband in limited quantities since they don’t want to finish their “bundles”. Let’s see what will happen anyway…


#16

I wish them all the best in this venture


#17

Normally building your own platform is expensive…that’s why even the M-PESA platform is built with Huawei expertise. Would be interesting to see which other Telcos globally have built their own RBT platforms. So far I don’t know of any.


#18

Do you have a source supporting Huawei’s involvement in Skiza?

M-Pesa is the only platform that is (was?) using Huawei’s G2 platform.

Some links would be appreciated.


#19

Huawei has done a lot of software for Safaricom. That includes current Mpesa platform.

This is the link you will use in the future.


#20

Not sure if there are links out there on the same. Btw even MTN’s RBT platform is also by Huawei, as well as their music app platform. Though in Safaricom’s case the music app is by a different vendor.