For many an artist the mention of Mdundo might lead to a frowned face, for the music fans, its an avenue to get to download free music. However, according to the company, “Mdundo is an online music distribution platform aiming at making music distribution easy, transparent and beneficial for both musicians and fans“. They go ahead to say. ..”when you consume music from our service, either free or paid for, Mdundo will pay the content owner of that music“. Rarely do fans complain about the service probably because, for those who want quality content, there is a paid subscription option. It is the artists who feel they are being robbed..but wait a bit, if your are enthusiastic about music business, you must have realized that globally, content owners are complaining too, especially on the low rates offered by Youtube and Spotify. So can Mdundo strive to offer musicians better pay? To answer that, lets put things into perspective.
How much does the service pay an artist for each song downloaded on their platform? The rates have been reducing… as it was 54 cents in the 1st half of 2015; 42 cents in the 2nd half of 2015 and now its 34 cents in the 1st half of 2016 (all the amounts quoted are in Kenyan shillings and are based on our calculations from a sample Mdundo account).
Some factors must have come to play:
- There is an exponential increase in number of song downloads per revenue period.
- There has also been an increase in earning in the same period.
- However, the rate of increase in revenue is lower than the rate of increase in number of downloads hence the reduced royalty payable per music download.
Mdundo’s revenue streams come mostly come from in-content advertisements, premium content, ads they run on their platforms. Since most consumers go for low-quality but free downloads, it means most of the revenue must come from ads.
2015 download, Revenue and Royalty figures
According to Mdundo annual report, 2.3 million users downloaded 8 million songs. Out of the 15,000 musicians from 36 countries on the the platform, only 8775 (61% fro Kenya and 29% from Tanzania) earned royalties in 2015. Only 237 musicians earned more than Ksh. 1000.
The company earned $53,000 (about Ksh. 5.3 million) and distributed $ 32500 (about 3.25 million to artists) representing 61.3% of total earnings.
The number of music consumers are increasing and so 2016 may record close to 20 million downloads. How would artists smile more?
An ideal situation would look like:
Lets assume that there are 25 million downloads in a year, e.g 2017, and Mdundo is to pay Ksh. 2 per download (about a 5 times increase!!!!!!), then the company should aim to collect…about Ksh. 83 million, since Ksh. 50 million (about 60%) shall have been paid as artist royalties.
To hit 83 million in a year, Mdundo must woo more advertisers and and increase their advertisement charge. Whether or not that is possible remains to the inguinity of Mdundo executives.
One thing am sure, Ksh. 2 per download would be better for artists, better than this 34 cents.
N/B: To react to the figures, you can comment below or reach the author at email@example.com
The writer is an artist manager and marketer and is the founder of Grosspool Music.