A Nigerian Startup on Path to Solving the Digital Music Distribution Problem(iafrikan.com)
iafrikan.com
A Nigerian Startup on Path to Solving the Digital Music Distribution Problem
http://www.iafrikan.com/2016/05/05/this-nigerian-startup-is-on-the-winning-path-to-solving-the-problem-of-digital-music-distribution-in-africa-2/
7 comments
You have to remember as well that cheapness matters, especially when piracy is actually the norm to the point that genuine copies are considered a frivolous luxury... which is true for the vast majority of people on this planet.
I'd easily take 10M units at 10c profit a piece over 50k units at 70c profit.
Imagine your lunch costs 5c instead of $5... not everywhere has the same economic values.
I'd easily take 10M units at 10c profit a piece over 50k units at 70c profit.
Imagine your lunch costs 5c instead of $5... not everywhere has the same economic values.
You can reduce your margin, but you can't really reduce the wholesale price. If the big labels expect to take $0.70 from you and your target audience is not willing to pay a dollar but rather something like $0.50, then you can only make negative profit.
You are assuming the music execs are rational, which evidently they are not.
>I can't tell from the article if the story has relevance to the USA market.
Unless the US market has suddenly grown an appetite for Nigerian artists, I don't think it does.
Their primary target is Nigerians. Yet, the site's only means of payment is paypal. Paypal won't work for this market as the class of people they are targeting wouldn't have a credit card. Not all debit cards issued in that country works on paypal.
The country's e-commerce is in its infancy. Therefore, trust - especially with their fellow countryman with debit cards is currently low.
>offers users the ability to download music for ₦30 ($0.50)
50 cents is not ₦30. It's ₦99.49 according to Google. At this price, it's hard to see them succeeding because a pirated mp3 disc containing as many songs as the disc can fit is priced at ₦200 and sometimes less. http://www.nairaland.com/125619/why-buy-pirated-cds-it
Additionally, they aren't really bringing anything new to the table apart from a fee and legality. There are lots of blogs where people can download songs in a single click at high quality and with cover art and some of the tags intact.
I just don't see this working. Even their target wouldn't mind paying ₦100 for a song, most would't be able to buy. If they really want to hit it big, they should solve the payment issue instead.
Unless the US market has suddenly grown an appetite for Nigerian artists, I don't think it does.
Their primary target is Nigerians. Yet, the site's only means of payment is paypal. Paypal won't work for this market as the class of people they are targeting wouldn't have a credit card. Not all debit cards issued in that country works on paypal.
The country's e-commerce is in its infancy. Therefore, trust - especially with their fellow countryman with debit cards is currently low.
>offers users the ability to download music for ₦30 ($0.50)
50 cents is not ₦30. It's ₦99.49 according to Google. At this price, it's hard to see them succeeding because a pirated mp3 disc containing as many songs as the disc can fit is priced at ₦200 and sometimes less. http://www.nairaland.com/125619/why-buy-pirated-cds-it
Additionally, they aren't really bringing anything new to the table apart from a fee and legality. There are lots of blogs where people can download songs in a single click at high quality and with cover art and some of the tags intact.
I just don't see this working. Even their target wouldn't mind paying ₦100 for a song, most would't be able to buy. If they really want to hit it big, they should solve the payment issue instead.
> At this price, it's hard to see them succeeding because a pirated mp3 disc containing as many songs as the disc can fit is priced at ₦200 and sometimes less.
A disc won't do you any good when all you have is a phone.
A disc won't do you any good when all you have is a phone.
Once you (or somebody you know) has obtained such a disc, it is trivial to get all the music you want over to that phone. You don't need to own a computer, any public place that offers computer service is enough and may even do the copying for you.
Sure, it's not as convenient as spotify, but just as in western world you can charge people a few bucks for extra convenience, in the developing world people will usually take awkward steps to avoid paying multiple dollars.
Sure, it's not as convenient as spotify, but just as in western world you can charge people a few bucks for extra convenience, in the developing world people will usually take awkward steps to avoid paying multiple dollars.
Also note this is already a saturated market.
There are companies that specialize in distribution (such as The Orchard and Isolation Network), and some of the big players like Sony and Warner have divisions within them that operate semi-autonomously, and even do distribution for smaller labels. A good example of this is BMG, who recently signed with Warner ADA[1].
Distribution is a solved problem. The value adds are really in the surrounding services, such as dashboards that show sales trends etc. These BI applications aren't traditionally startup friendly. I'd be very surprised if any startup were able to not only disrupt this industry, but make money doing it.
[1]: http://www.musicbusinessworldwide.com/warner-signs-bmg-deal-...
Distribution is a solved problem. The value adds are really in the surrounding services, such as dashboards that show sales trends etc. These BI applications aren't traditionally startup friendly. I'd be very surprised if any startup were able to not only disrupt this industry, but make money doing it.
[1]: http://www.musicbusinessworldwide.com/warner-signs-bmg-deal-...
The best way to do this is to legally stream people's personal libraries. The software would be a legal version of Napster. How, you may ask?
File locking.
Imagine a system that allows you to see a list of music available from your peers. If you stream a song from your peer, a file lock engages on their copy. That peer is unable to play the song. If they need to get to song, they could end the stream.
Such a system exactly mirrors sharing physical media. You are bereft of the item. You don't get the item back until the person to whom you lent the item returns it. Return occurs hen the file lock is relinquished. As such it should be perfectly legal to share.
The difficulty with such a system is that there is little place for profit. The software does provide a serivce: indexing and suggestions and playlists. You could do ads. People might not join because of it. You could charge a low flat fee. Just hard to monetize it.
File locking.
Imagine a system that allows you to see a list of music available from your peers. If you stream a song from your peer, a file lock engages on their copy. That peer is unable to play the song. If they need to get to song, they could end the stream.
Such a system exactly mirrors sharing physical media. You are bereft of the item. You don't get the item back until the person to whom you lent the item returns it. Return occurs hen the file lock is relinquished. As such it should be perfectly legal to share.
The difficulty with such a system is that there is little place for profit. The software does provide a serivce: indexing and suggestions and playlists. You could do ads. People might not join because of it. You could charge a low flat fee. Just hard to monetize it.
This file lock cannot exist outside of some intensely locked down binary blob which will be cracked in minutes. Your idea might make sense legally, but it doesn't make sense physically.
Actually Java NIO locks the file at the OS level, if the OS provides that feature. Windows does. I played with the idea a bit at IUPUI during a distributed systems class. You're correct that having to do the locking in userspace would be difficult.
Some one could crack it. That doesn't mean much legally. Look at DRM: it's crackable. The industry still uses it.
Some one could crack it. That doesn't mean much legally. Look at DRM: it's crackable. The industry still uses it.
"As such it should be perfectly legal to share." is not really how the current copyright system works. With your scheme, it "should" be ok according to fairness and such, but it would actually be legal only if the copyright owners would accept such a scheme. Which they won't, as it would only hurt their revenue.
That's kind of a cool idea. If it's p2p, it doesn't even need to turn a profit, it can be open source.
Unless it's proprietary hardware, it will be circumvented pretty quickly.
Kids under 12 have grown up in an era without physical formats, and with YouTube and Spotify etc as the main means of listening to music.
They could not care less for owing their music collection as digital files.
Of course some outliers will want it -- heck, some people even fell for Ogg Vorbis and FLAC, but those are never going to tip the scales.
(And for the majority, unlike in the 50s-to-80s era, music is that not big deal in their life anyway. They have tons of other diversions, mobile, chat, social, 24/7 internet, youtube, videogames, etc).
They could not care less for owing their music collection as digital files.
Of course some outliers will want it -- heck, some people even fell for Ogg Vorbis and FLAC, but those are never going to tip the scales.
(And for the majority, unlike in the 50s-to-80s era, music is that not big deal in their life anyway. They have tons of other diversions, mobile, chat, social, 24/7 internet, youtube, videogames, etc).
I was thinking last week how places like Nigeria will be the location of the next start up bubble as they pass through the threshold of punctuated equilibrium. They have unique problems that a bunch of tech geeks in the Bay Area and hipsters in Portland would never think of needing to be solved.
>They have unique problems that a bunch of tech geeks in the Bay Area and hipsters in Portland would never think of needing to be solved
You're right about that. The tech scene in that country would remain paltry until two things are solved.
First, the internet. The telecos have only built dumb pipes to Europe. There is no peering agreement amongst local telecos. It's better to host a website in the US than locally because the roundtrip time would double rather than decrease.
Thus, that initial low cost barrier to building something that allowed the internet to blossom like a flower is absent. Remember how Google and Facebook leeched off their university computers and network for years? It can't happen because of this factor. And because usable Wifi simply doesn't exist. It's either passworded for University staff use or insanely slow. (I've visited at least 3 Nigerian universities and Two in Ghana.) I've spoken to several students and the situation is the same.
The second issue to be tackled would be payment. The major players are tied to the banks. Thus, they can't reorient their thoughts to what's required to make online payments smooth, easy and cheap for users.
You're right about that. The tech scene in that country would remain paltry until two things are solved.
First, the internet. The telecos have only built dumb pipes to Europe. There is no peering agreement amongst local telecos. It's better to host a website in the US than locally because the roundtrip time would double rather than decrease.
Thus, that initial low cost barrier to building something that allowed the internet to blossom like a flower is absent. Remember how Google and Facebook leeched off their university computers and network for years? It can't happen because of this factor. And because usable Wifi simply doesn't exist. It's either passworded for University staff use or insanely slow. (I've visited at least 3 Nigerian universities and Two in Ghana.) I've spoken to several students and the situation is the same.
The second issue to be tackled would be payment. The major players are tied to the banks. Thus, they can't reorient their thoughts to what's required to make online payments smooth, easy and cheap for users.
Thanks for your comments. I have visited so many universities in Nigeria and I think that the drive is not there at all. However, I heard that private universities are far better equipped and oriented(I have not visited such schools). I just noticed one thing among Nigerians, my people, they would prefer to blame the system instead of working to overcome obstacles.
I operate an online shop and my target market is universities.I only accept bank transfer(awkward you my say) and PayPal. I hope to network with you in the future.
My email is visible on my profile. If it isn't. It's my profile name @live.com
The only problem to the distribution of music /IS/ the legacy distribution industry. They refused to adapt and therefore the best thing for everyone else is that they die off.
The music industry is so large, nobody will be able to defeat them or their pack of lawyers in court. Napster was supposed to be a revolution, but all it did was put all of the indy artists out of business and create the environment we have now where music is virtually worthless and the only way to make a living as an artist is to sign with a big company and tour.
Music sharing took away all of the power we had to defeat the music industry. You need big money to make big changes, and now it's way too late.
The only real way to change the music industry is to start your own label, get the rights to all of the musicians' work, and then charge what you feel is right for the music and give them their fair share.
Nobody wants to do this because it will take years of sacrifice and money. I suspect that most people that start out with this intention, end up becoming the exact company they aimed to stop in the first place, because they didn't realize the cost and risks involved with the music industry.
Music sharing took away all of the power we had to defeat the music industry. You need big money to make big changes, and now it's way too late.
The only real way to change the music industry is to start your own label, get the rights to all of the musicians' work, and then charge what you feel is right for the music and give them their fair share.
Nobody wants to do this because it will take years of sacrifice and money. I suspect that most people that start out with this intention, end up becoming the exact company they aimed to stop in the first place, because they didn't realize the cost and risks involved with the music industry.
>The music industry is so large, nobody will be able to defeat them or their pack of lawyers in court. Napster was supposed to be a revolution, but all it did was put all of the indy artists out of business and create the environment we have now where music is virtually worthless and the only way to make a living as an artist is to sign with a big company and tour.
It also halved or even less the revenues of the music industry.
It was indeed a revolution, but not necessarily good for the indies. Plus, technology lowered both recording and distribution costs to nearly 0, and so everybody and his dog is an indie now and people just don't care. If you have 10.000 indie artist, each might have a following. If there are 200.000 of them, it's much more difficult.
>Music sharing took away all of the power we had to defeat the music industry. You need big money to make big changes, and now it's way too late.
Only if the idea of "defeating the music industry" was "and get to make a living as indie artists".
If it was "fuck the industry part, let's just have music from people who don't do it for profit" then it was a wild success. We now have more music from people who couldn't give a rats arse for profits than ever before -- all over Bandcamp, CD Baby, personal sites, small vanity pressings and more.
It also halved or even less the revenues of the music industry.
It was indeed a revolution, but not necessarily good for the indies. Plus, technology lowered both recording and distribution costs to nearly 0, and so everybody and his dog is an indie now and people just don't care. If you have 10.000 indie artist, each might have a following. If there are 200.000 of them, it's much more difficult.
>Music sharing took away all of the power we had to defeat the music industry. You need big money to make big changes, and now it's way too late.
Only if the idea of "defeating the music industry" was "and get to make a living as indie artists".
If it was "fuck the industry part, let's just have music from people who don't do it for profit" then it was a wild success. We now have more music from people who couldn't give a rats arse for profits than ever before -- all over Bandcamp, CD Baby, personal sites, small vanity pressings and more.
> Napster was supposed to be a revolution, but all it did was put all of the indy artists out of business and create the environment we have now where music is virtually worthless and the only way to make a living as an artist is to sign with a big company and tour.
Maybe that's fair. Maybe digital music is virtually worthless, because software is virtually worthless. When music came pressed onto a plastic disc or magnetic tape, paying for it made sense. Why should anyone pay more than a few pennies, or anything at all, for arbitrary bits downloaded from the internet - the way most people consume music now?
>charge what you feel is right for the music and give them their fair share.
As coldtea mentions elsewhere, the cost of production is approaching zero, the cost of distribution is zero, and the market is flooded with far more mediocre products than anyone can consume in a lifetime. Charging what "you feel is right" will bankrupt you if the market disagrees with you as to the actual value of your product. You don't have to worry about fighting the music industry because its collapse is inevitable. Fortunately for indie artists, there are already alternatives to the old media models and it is easier to directly reach an audience and be directly compensated for your work.
Maybe that's fair. Maybe digital music is virtually worthless, because software is virtually worthless. When music came pressed onto a plastic disc or magnetic tape, paying for it made sense. Why should anyone pay more than a few pennies, or anything at all, for arbitrary bits downloaded from the internet - the way most people consume music now?
>charge what you feel is right for the music and give them their fair share.
As coldtea mentions elsewhere, the cost of production is approaching zero, the cost of distribution is zero, and the market is flooded with far more mediocre products than anyone can consume in a lifetime. Charging what "you feel is right" will bankrupt you if the market disagrees with you as to the actual value of your product. You don't have to worry about fighting the music industry because its collapse is inevitable. Fortunately for indie artists, there are already alternatives to the old media models and it is easier to directly reach an audience and be directly compensated for your work.
edit: well, I'm out. I realized that on HN, after you go against the main liberal narrative enough, all of your comments are down voted by bots from then on...even when you are trying to have a conversation with adults.
Time to create a new account. rinse and repeat.
Time to create a new account. rinse and repeat.
I can't tell from the article if the story has relevance to the USA market. If record companies today can get $0.70 cut from Apple for a $0.99 song on iTunes, it doesn't look like they'd take less than $0.50 from a startup.
Last I checked, Amazon Music downloads is also 70/30 split for 99 cent songs.
>The team invested a lot of time [...], while mending those with record labels and artist management companies.
My notes to any programmer that's interested in selling music for 50 cents or less:
Before investing a ton of time writing any code, get on the phone with the Big 3 record labels Universal+Warner+Sony. See if you can get favorable licensing terms so that they'll take $0.35 and let you keep $0.15. I'm skeptical you'll get such terms because Spotify/Pandora tried to get better terms so they could turn a profit. They couldn't make it happen. Maybe you have better negotiation skills and charm than the Spotify executives. Napster's Shawn Fanning & Sean Parker didn't have the business chops to wheel & deal with record labels but Apple's Steve Jobs did.