MBW’s World Leaders is a new regular series in which we turn the spotlight towards some of the most influential industry figures outside the US and UK markets. In this feature, we speak to Sipho Dlamini, the newly-promoted CEO of Universal Music in both Sub-Saharan Africa and South Africa.
Six years ago, Universal publicly committed to investing in Africa as a priority global region. Ever since, barely a month has gone by without a major move by UMG on the continent.
In 2018 alone, for example, UMG launched a strategic division in French-speaking African markets, launched a new HQ under the Universal Music Nigeria brand in Lagos, and acquired a majority stake in Kenya’s AI Records.
Universal Music France also recently partnered with Nigeria-based Aristokrat Group, best known for discovering and developing breakout African talent Burna Boy.
Universal’s latest major move in Africa sees a significant strengthening of its team in the region, via two impressive hires: the former MD of ad giant Ogilvy in South Africa, Elouise Kelly, joins Universal Music Sub-Saharan Africa & South Africa as COO; and Universal Music Nigeria has hired respected live music entrepreneur Chin Okeke as Managing Director.
Heading up Universal’s activity in much of Africa is Sipho Dlamini, who was recently promoted to CEO of Sub Saharan & South Africa, and also oversees UMG’s activity in Kenya.
He credits UMG’s successful local expansion as the catalyst for this performance. UMG’s office in Nigeria, he says, has acted as a base for the company’s efforts across west Africa, while the AI Records acquisition and UMG’s subsequent investment in Kenya has been a springboard for growth in east Africa.
Dlamini started his career in the UK, having grown up between Zimbabwe and South East London, promoting club nights and concerts for African artists in England during the 1990s. He took over as head of Universal Music South Africa and Sub-Saharan Africa in 2016, following three years as the Chief Executive of SAMRO, Africa’s leading music rights organisation.
Here, Dlamini, who has orchestrated much of Universal’s rapid-growth strategy across Africa in recent years, gives his view on the hottest African markets right now, Universal’s position as an accelerator of the region’s growth – and why he’d love to see Spotify launch in multiple African countries sooner rather than later…
When you took the job at Universal in 2016, did you sense a commitment from UMG to not only South Africa but also Sub-Saharan Africa and beyond?
Yes; it was one of the things that excited me. You can’t be a music company that only has an office in South Africa and claim that you are looking after the whole [African] continent. South Africa is not a true representation of Kenya, Nigeria, Ghana or other markets. Each of these territories has its own nuances that you can only learn by operating there.
“South Africa is not a true representation of Kenya, Nigeria, Ghana or other markets. Each of these territories has its own nuances that you can only learn by operating there.”
The other big thing that excited me was that Universal is an entertainment company, not just a music company. My background leaned toward that, because I’ve done live work and [artist] management, and those were things I felt the major labels should be more involved with and doing better.
What’s been the most exciting progress or transformation you’ve seen since 2016? Is Nigeria the hotspot of Africa as a commercial market?
It would be fair to say that Nigeria – and Nigerian artists, Afrobeats especially – has received a lot more recognition and consumption globally than some of the other genres in Africa. But the beautiful thing is that each market is different, has different sounds and a different culture.
Almost every day of the week in Kenya, for example, you’ll find live venues hosting live performances, and it’s a multiracial experience. You’ll go to a bar on a Tuesday night and there’ll be a reggae band playing, you’ll bump into somebody from Australia, from China, from Australia, from London, from America, all in one space.
Is one of the elements holding Africa back as a commercial region for recorded music inaccessible and overly expensive mobile coverage?
Totally, and it has a big impact on how people consume music in different countries. For example, South Africa has what I believe are the fourth most expensive [mobile] data costs in the world. Most people in South Africa are reluctant to use their [telco] data to stream.
As a result, if you look at platforms like YouTube, the number of views that South African artists get for their music videos are considerably lower than the number of views that artists in Tanzania would get, where the data costs are significantly lower. Data costs in Nigeria are also comparatively lower compared to South Africa; that’s another reason why you also get more streaming [in Nigeria], although there’s also a bigger population.
“Data cost [in areas of Africa] is a barrier to people streaming more, and also to the availability of the global DSPs.”
Data cost [in areas of Africa] is a barrier to people streaming more, and also to the availability of the global DSPs. Up until a few months ago, when Apple expanded Apple Music, that service was only available in 16 or 17 countries in SubSaharan Africa. Spotify was only available in one country [South Africa, and still is].
People in Zimbabwe don’t have Spotify; people in Ghana don’t have Spotify; people in Nigeria don’t have Spotify – they only have access to Apple Music. And even Apple Music in Nigeria, for example, has had some challenges around its billing in US dollars versus the local currency. That all means that you don’t have a uniform streaming experience across different countries that people can subscribe to locally.
Why would you encourage a company like Spotify to look seriously at launching in some of Africa’s 50-plus nations as the next thing on its roadmap?
Even with these market conditions, the growth across the African continent in terms of streaming [volume] and revenue is very impressive. And that’s without the support of DSPs being present in all these markets.
The IFPI global report [for 2019] showed an overall global increase in revenue [for the record business] of 8.2%. But in Africa, combined with the Middle East, it was about 15% – which places [Africa] as the world’s second highest growth market after Latin America.
“Africa is the world’s second highest growth market after Latin America.”
So you have to think, if that’s happening in the absence of leading DSPs being available in all markets, what would happen if they were available – and if the data costs begin to drop?
One would assume, considering the vast population that the African continent holds, even just by [Spotify] focusing on launching in key markets, maybe starting with Nigeria, it would be a significant play [for that business].
Apple Music’s big expansion in Africa HAPPENED IN APRIL 2020 – increasing its availability to 25 additional countries on the continent. How significant could that announcement be for Universal and the music business?
Very significant. We recognise that it takes time to achieve the level of engagement on these platforms that we would ultimately want to see. But it’s definitely a step in the right direction.
That one announcement doubled [Apple Music’s] in presence in Africa. And the experience on this service is great. It’s stable, the music delivery works, the discovery works. So yeah, we hope they’ll get to all 54 markets soon – and we hope Spotify will also follow quickly behind.
Warner struck a JV with Chocolate City in Nigeria, while Sony has had a presence in that market for years. How does Universal’s strategy differ?
We’re very focused on developing local talent and trying to build out the ecosystem. So for us, A&R inside [Universal’s system] is very important – we’re building from the ground up.
That’s why in Nigeria we have recording studios and offices which allow us to do that. We don’t have to book a studio every time we need to record an artist, which allows us to spend more time developing talent. Also, the live space is important for us, because we know that artists very often end up depending on the live performances for their [economic] sustainability. So we can’t only participate on the recording side, [we have to] support the live side too.
“A&R inside [Universal’s system] is very important – we’re building from the ground up.”
We have two live divisions in Africa: one does talent bookings, UMG Live, and then the other actually produces and promotes our own concerts, events and festivals. So that, plus the brand [partnerships] business we offer artists, allows us to participate in the entire music ecosystem in Nigeria.
We do movie projects too, as you saw recently with [Nigerian producer] Larry Gaaga, releasing the first mainstream music soundtrack for a high-profile Nollywood film [Living In Bondage – Breaking Free].
You’ve struck these big global deals with African talent like Tiwa Savage and Nasty C. But the independent artist world is also thriving in Africa, via Mr. Eazi’s emPawa and other distribution/services offerings. How are you combating that with your major label offering?
With a range of opportunities depending on the artists. [Universal] artists have the option of being able to upscale and add in services as success kicks in. If an artist has infrastructure and a team around them – doing their own marketing, PR etc. – at the beginning then we can just provide distribution.
“We have proven to people that we can add a lot of value without forcing anyone to commit to a global deal in the first instance.”
But as their career takes off, we can very quickly kick in the digital marketing team, we can build promotion in other regions, we can handle brand [partnerships], sync, live bookings.
We have proven to people that we can add a lot of value without forcing anyone to commit to a global deal in the first instance. That’s the real power in what we do: we can upscale very quickly to add on services for artists, both locally and globally.
The introduction of Def Jam Africa is interesting – a legendary label name, differentiated from standard Universal Music deals. Why make that move?
Africa has a large youth population. And if I’m being totally honest, even when I first came into the major [label] business, hip-hop in South Africa was not taken as a serious genre. Even in the early 2000s, there were labels that wouldn’t sign hip-hop or R&B artists, this view that ‘hip-hop won’t sell’ or ‘R&B won’t sell’.
As a result, a lot of the hip-hop artists went and did their own things independently, and that created distrust and a negative relationship between major labels and the hip-hop community. We’ve worked hard re-building that relationship over time – it was important that we made a commitment to these youthful genres at a bigger level.
“Def Jam Africa is us saying, ‘If you want to do hip hop, if you want to do Afrobeats or trap, this is the label that you should aspire to sign to.’”
That’s what Def Jam Africa is, it’s us saying, ‘If you want to do hip hop, if you want to do Afrobeats or trap, this is the label that you should aspire to sign to.’ And there’s dedicated resources servicing those artists in terms of A&R and marketing that fully understand the culture and understand the consumption.
For example, you can’t measure success in South Africa for a hip-hop act, to a certain extent, by just looking at the radio charts. Hip-hop artists stream more than they might get played on radio; and other genres will get more play on radio but won’t stream as much. So it’s just understanding the nuances of where the culture lives, and how to talk to fans within that culture.
Do you have ambitions that maybe you can leverage some of the other label brands that Universal owns in Africa next – Island Records, Capitol, Interscope etc.? And tap into Vivendi’s media power too?
Watch this space! That’s the beauty of being in the world’s largest music-based entertainment company. There are so many exciting brands that we potentially have access to. Streaming’s growth in Africa is already exciting, but as a continent, there is so much more we can do here.
Look at the [Vivendi/Universal family of brands]: There’s Bravado, a merchandise business; there’s Canal+ and Canal Olympia – with [the latter] having launched multi-purpose venues in 13 or 14 African countries already.
The CEO of [Vivendi-owned mobile games company] Gameloft is based in South Africa, and we’re always talking about ideas for collaborations. It’s great to be having a gaming conversation in the morning, an advertising conversation in the afternoon, and then be back in the studio with artists in the evening.
There isn’t detailed information about market performances in IFPI figures for various African countries. Outside of Nigeria and Kenya, where do you think the global music industry should be paying particular attention to?
I’d definitely say Ghana, for one, partly because there is such a strong Ghanaian diaspora population in the UK and beyond – and they’re also very passionate and very dynamic in the music and in their sound. Fuse ODG has nearly 2 million monthly listeners on Spotify – that’s significant.
Other Ghanaian artists like Sarkodie and Stonebwoy are also doing amazing things and getting recognition and support in other markets. Ethiopia is also exciting for me; it’s got such a rich history and culture and the difference in the music coming from there versus anywhere else in the world makes it a market worth watching.
“Where will Nigeria sit in the next five years? Where will Kenya sit?”
There are so many: The Ivory Coast is amazing, Tanzania is a small, but very exciting market – Bongo Flava [from Tanzania] does extremely well.
Then you have countries like Zimbabwe that are becoming more prolific with the artists and new sounds that are emerging. But you’re right: out of the 61 countries that report in the IFPI’s [annual global] report, only one is from Africa – South Africa, which was ranked No.31 in the world [for annual recorded music revenues] in 2019.
That’s a very telling data point, because even South Africa has a lot of catching up to do with the global market in terms of revenue generation and streaming. So if South Africa can sit at No. 31, you start to wonder: Where will Nigeria sit in the next five years? Where will Kenya sit?
It’s great that IFPI has now opened a regional office in Africa, because hopefully some of this data will start to flow and give people a fuller picture.
If I could give you a magic wand, and you could change one thing about the music business, domestic or global, what would it be and why?
The visibility of African content on global streaming playlists. It’s getting better, but there are still many barriers. When we pitch to music DSPs in South Africa, they are only really looking at the top playlists in their own country, then maybe they’ll look at other countries in Africa.
That’s a totally separate team and process to the US or the UK, where the biggest playlists are [compiled]. That leaves our artists at the mercy of the gatekeepers in Africa, as to whether they can get their guys in the US to even have sight of the music or consider it for their playlists.
“A big help would be a commitment from these DSPs to have a percentage – even if it’s a tiny percentage – of music from the continent feature on their global playlists.”
It would be great if, when you pitch, every playlist [curator] globally linked to that platform gets it and they listen to it because there’s amazing music that’s coming out of Africa. How do you fix that? I mean, obviously one thing, and I’m not picking on them, would be if Spotify did open offices and have curators in many more different regions [in Africa] – that would obviously help.
Another big help, and it’s probably a bit controversial to say, would be a commitment from these DSPs to have a percentage – even if it’s a tiny percentage – of music from the continent feature on their global playlists. Literally just 5% on New Music Friday, so you knew that, every time you go to that playlist, they’ll at least be two or three tracks from Africa. That would be a move in the right direction.Music Business Worldwide
