LT2014, Global Music & Media Distribution, In-Class Presentation, London Metropolitan University, London, UK (April 2011)
Topic: An Analysis of the South African Music Market
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LT2014N - The South African Music Market 2010
1. MUSIC MARKET ANALYSIS
LT2014N – Global Music & Media Distribution– London Metropolitan
University
By: Marian Zinn (09000016)
2. PRESENTATION AGENDA
1. SOUTH AFRICA - BACKGROUND
2. MUSIC SALES & DISTRIBUTION ENVIRONMENT
3. MUSIC MARKET STRUCTURE
4. INTERNATIONAL VS. DOMESTIC REPERTOIRE
5. LOCAL MUSIC SCENE
6. PIRACY
7. LIVE MUSIC SECTOR
3. SOUTH AFRICA - BACKGROUND
Population of 50 million people
11 official languages (Rainbow
Nation)
English → business language
Apartheid policies:
International
isolation until 1994
Sources: CIA, 2011; Informa UK, 2010
5. MUSIC RETAIL & DISTRIBUTION
94% of music sales → physical format
Physical music retailers dominate legal sales
MUSICA = 157 stores
Physical sales remain strong:
Low broadband penetration
Limits competition from digital music
retailers
Sources: Informa UK, 2010; Coetzer/Billboard, 2010
6. MOBILE & BROADBAND ACCESS
Digital music
market Mobile driven
South Africa, mobile penetration (%)
2009
Mobile subscriptions 49.576.240
Mobile penetration 101.5%
Mobile Broadband Market:
By 2013 → 80% have access to 3G technology
Potential for music promotion & download/streaming
services
Sources: Informa UK, 2010; Coetzer/Billboard, 2010
7. MOBILE & BROADBAND ACCESS
Only 9% of households have fixed broadband connection
South Africa, broadband penetration (%)
2009
Fixed Broadband subscriptions 817.720
Fixed Broadband penetration 9%
Fixed broadband market:
Limited bandwidth & high prices
Infrastructure is being upgraded
2010 MWeb → first unlimited DSL flatrate
Sources: Informa UK, 2010; Coetzer/Billboard, 2010
8. MUSIC INDUSTRY STRUCTURE
South Africa’s music industry → most developed in Africa
Established supply chain → record companies, manufacturing and retailing
4 Majors dominate the
music market 77% Market Share
South Africa, recorded music market shares
(%)
2009
EMI 18.0
Sony 23.8
Universa 20.0
l
Warner 15.3
Others 22.9
Sources: Informa UK, 2010; Pietilä, 2009
9. MUSIC INDUSTRY STRUCTURE
Independents represented by Association of Independent Record
Companies
South Africa, recorded music market
shares (%)
2009
Independents 22.9
Independent Recording Market:
Number of independent labels is growing
Entrepreneurs realize potential in local music
JUST MUSIC → biggest independent in SA
Sources: Informa UK, 2010; Pietilä, 2009
10. INTERNATIONAL VS. DOMESTIC
• in 2000, international music still dominated the market with
74%
South Africa, trade value of recorded-music sales by
repertoire
International Domestic
Trade Value (%)
26%
47%
74%
53%
2000 2009
• in 2009, domestic repertoire reached an all time high of 47%
Sources: Informa UK, 2010; Coetzer/Billboard, 2008; Clegg, 1995
11. LOCAL MUSIC SCENE
Local music is divided between different ethnic
groups
Music is released in various local languages & in English
Black
community: of hip-hop, R&B and reggae to gospel &
• local versions
traditional African music
• new genres combining African sounds with western
influences → afro-pop, afro-jazz and Kwaito
White
community: and rock music – very popular
• Afrikaans folk
• best selling local music product
Sources: Informa UK, 2010; Swink, 2003
12. SOUTH AFRICAN ARTISTS
THE
PARLOTONES
ZEBRA &
GIRAFFE
FRESHLYGROU
ND
FLASH
REPUBLIC
GOLDFIS
H
DJ BLACK
DIE COFFEE
ANTWOORD
13. PIRACY
Piracy is a significant problem:
40% of recorded music sales are illegal copies
Annual loss of around $70m
Organised crime syndicates
High demand for cheap pirate copies
ANTI-PIRACY UNIT set up 2006 by
RISA
Problem → Piracy not priority of SA Government
→ Growth of illegal sales & P2P file sharing predicted
Sources: RISA, 2009; Sapa/Times, 2011; Mkhitze/Times, 2008
14. LIVE MUSIC SECTOR
Live music is a vibrant industry in South Africa:
Growing number of music festivals
Local acts touring throughout the year
Concert activities centered around major cities
Number of international acts very limited:
Not financially feasible for most artists
Low ticket prices → less profit potential
Big brands often finance international concerts
Sources: Informa UK, 2010; Music Week, 2010; Coetzer/Billboard, 2008
15. LIVE MUSIC SECTOR
Largest South African concert promoter → BIG CONCERTS
Organises some of the biggest music festivals
Coca-Cola Zero Festival,
Woodstock Rock Festival
Cape Town International Jazz Festival
2009 Strategic Partnership with LIVE NATION
Sources: Informa UK, 2010; Music Week, 2010; Coetzer/Billboard, 2008
16. CONCLUSION
• South African Music Market
→ still based on traditional music supply chain
• Digital Communications are being upgraded
→ prices should fall – driving digital music consumption
• Mobile platform
→ revenue opportunities need to be further exploited
• Domestic Repertoire
→ emphasis on developing South African artists/music
• Piracy biggest threat
→ impacts will get worse with digital revolution
Sources: Informa UK, 2010; Music Week, 2010; Coetzer/Billboard, 2008
17. THE END
THANK YOU FOR YOUR
ATTENTION.
PLEASE FEEL FREE TO ASK
QUESTIONS.
18. REFERENCES
•IFPI (2010), "IFPI – Recording Industry in Numbers 2010", London : International Federation of the Phonographic
Industry, 2010
•Informa UK (2010), “The international business newsletter of global music copyright”, Music & Copyright Issue 404
(online) Available at: http://shop.informatm.com/pdf/Nov-2006/10/m_c331_110806.pdf [Accessed on 25.03.11]
•DACST (1998), “THE SOUTH AFRICAN MUSIC INDUSTRY”, Department of Arts, Culture, Science and Technology
(online) Available at: http://www.info.gov.za/view/DownloadFileAction?id=70494 [Accessed on 25.03.11]
•Advantage Magazine (2010), "Media, Marketing and Advertising Directory 2010" (p.3-6), Primedia Publishing:
Randburg, South Africa
•Anon (2009), “The show ain't over 'til South Africa sings”, The Sunday Independent (online) Available at: http://0-
www.lexisnexis.com.emu.londonmet.ac.uk/uk/nexis/results/docview/docview.do?docLinkInd=true&risb=21_T1157379388
6&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T11573793889&cisb=22_T11573793888&tree
Max=true&treeWidth=0&csi=312454&docNo=7 [Accessed on 25.03.11]
•Anon (2000), "SA music humming.", African Business; Dec2000, Issue 260, p23, 2p
•Clegg, J (1995), "S. African acts demand domestic radio play." Billboard; 1/7/95, Vol. 107 Issue 1, p8
•Coetzer, D (2010), "South Africa Set For Digital Music Expansion", Billboard (online) Available at:
http://www.billboard.biz/bbbiz/others/south-africa-set-for-digital-music-expansion-1004077331.story [Accessed on
25.03.11]
•Coetzer, D (2008), "BIGGER, BUT NOT BETTER?", Billboard; 4/19/2008, Vol. 120 Issue 16, p20-2
•Coetzer, D (2008), "South African Broadcaster Ups Domestic Music Quota", Billboard (online) Available at:
http://www.billboard.biz/bbbiz/others/south-african-broadcaster-ups-domestic-music-1003849252.story [Accessed on
25.03.11]
•MKHIZE, T (2008), “Piracy sinks local music sales”, The Times (online) Available at:
http://www.timeslive.co.za/thetimes/article13411.ece [Accessed on 25.03.11]
•Music Week (2010), “Music Week South African special” (online) Available at:
http://issuu.com/musicweek/docs/southafrica [Accessed on 25.03.11]
•Pietilä, T (2009), "WHOSE WORKS AND WHAT KINDS OF REWARDS.", Information, Communication & Society;
Apr2009, Vol. 12 Issue 2, p229-250
•Sapa (2011), “A hi-tech house of streams”, The Times (online) Available at:
http://www.timeslive.co.za/local/article934394.ece/Illicit-economy-threatens-regular-economy [Accessed on 25.03.11]