The challenges of doing business in Nigeria are not insurmountable despite the huddles they constitute for businesses and investors, says Jocelyne Muhutu-Remy, Spotify’s managing director, Sub-Saharan Africa.

Ms Muhutu-Remy made this known during an exclusive interview with PREMIUM TIMES in Lagos, Nigeria’s commercial hub. The top official visited Nigeria this month alongside other top executives of the company as part of efforts to immerse themselves in the Nigerian market, which has been identified as one of Spotify’s priority markets.

“We are still relatively new in Africa and the Nigerian market, having only expanded here slightly over two years ago but the challenges are not insurmountable,” she said.

“Piracy is still the most common challenge in the music industry in African markets. Low internet connectivity and storage issues are challenges across Africa. In addition to bandwidth challenges in less urban areas, Nigeria also has a vast low-end Android market. Therefore, data consumption, network instability and the use of older mobile devices, also contribute to the prevalence of piracy.”

To counter these challenges, Ms Muhutu-Remy noted that Spotify offers the Freemium business model in Nigeria and its ad-supported freemium service removes the financial burden from the users and allows them to enjoy the music of their favourite artists without any cost.

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“This free service still allows us to pay the artists and creators on our platform. Our goal is to lead in the narrative that informs music enthusiasts in Nigeria about the menace that piracy poses to the growth of the music industry; and ultimately steer the shift from piracy to our legitimate free music platform and subsequently, transition to paid subscriptions.

“In Nigeria, product education becomes a key driver. It is important for us to work with partners in the music industry, podcast creators and local communities to educate users on the benefits of audio streaming services such as Spotify – the benefits of audio entertainment, legally streaming music and the impact on creators,” she said.

She disclosed that there are top genres fusing with Nigeria’s Afrobeats, and this also presents opportunities for the future. Afrobeats, for instance, was streamed more than 13 billion times on Spotify in 2022 and has already been streamed 15.3 billion times in 2023.

In 2022, revenues generated by Nigerian artists from Spotify alone reached over 27 million U.S. dollars. Although the overall revenues of the Nigerian music industry experienced a remarkable 63% growth from 2021 to 2022, revenues exclusively generated by Nigerian artists through Spotify witnessed an even more impressive growth of 74% during the same time frame, the company says.

Podcast

Spotify data shows that when it comes to podcast listening on the platform, Nigeria is rated second after South Africa, followed by Kenya, Ghana then Angola. On Spotify, podcast listenership in Nigeria has grown by 222% between 2021 and 2022, with the majority of these listeners aged between 18-24 years accounting for 50% of all streams, a trend similar across SSA where 39% of all podcasts streams come from this age group.

Since entering the Nigerian market, Ms Muhutu-Remy noted that the company has made significant strides in its operations.

“Our Sub-Saharan African markets are all on unique growth journeys. In Africa, there’s no one-size-fits-all approach. We’ve tailored growth strategies to suit our global business, spanning over 180 markets,” she said.

“Nigeria, for example, offers one of the largest total addressable music markets globally, and we’re thrilled about the journey ahead. We’re just beginning, and already, Nigerian artists are connecting with our global audience.

“In Nigeria, we’ve made significant strides in streamlining our operations by processing local card transactions through a Payment Service Provider (PSP). This strategic move has fueled our growth story in this market. Our partnership with DLocal exemplifies how local collaborations can help us address unique market challenges. Our collaboration with Airtel Nigeria, initiated in January 2022, enables Airtel users to enjoy music streaming without data consumption.”

As part of efforts to contribute to the development of the local economy, Spotify says it is committed to nurturing the growth of the music ecosystem in Nigeria.

“Spotify is dedicated to empowering local creators, assisting them in expanding and monetizing their music. Music is a prominent export, and our extensive local knowledge, connections, and market-specific focus position us to help artists and creators establish and grow their businesses through Spotify,” she said.