LT2014N - The South African Music Market 2010

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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. 1. MUSIC MARKET ANALYSIS LT2014N – Global Music & Media Distribution– London Metropolitan UniversityBy: Marian Zinn (09000016)
  2. 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. 3. SOUTH AFRICA - BACKGROUNDPopulation of 50 million people 11 official languages (Rainbow Nation)English → business language Apartheid policies: International isolation until 1994 Sources: CIA, 2011; Informa UK, 2010
  4. 4. RECORDED MUSIC SALES Sources: IFPI, 2010; Informa UK, 2010
  5. 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. 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. 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. 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. 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. 10. INTERNATIONAL VS. DOMESTIC• in 2000, international music still dominated the market with74% 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. 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. 12. SOUTH AFRICAN ARTISTS THE PARLOTONES ZEBRA & GIRAFFE FRESHLYGROU ND FLASH REPUBLIC GOLDFIS H DJ BLACK DIE COFFEE ANTWOORD
  13. 13. PIRACYPiracy is a significant problem: 40% of recorded music sales are illegal copiesAnnual loss of around $70mOrganised crime syndicatesHigh demand for cheap pirate copies ANTI-PIRACY UNIT set up 2006 by RISAProblem → Piracy not priority of SA Government→ Growth of illegal sales & P2P file sharing predicted Sources: RISA, 2009; Sapa/Times, 2011; Mkhitze/Times, 2008
  14. 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. 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. 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. 17. THE END THANK YOU FOR YOUR ATTENTION.PLEASE FEEL FREE TO ASK QUESTIONS.
  18. 18. REFERENCES•IFPI (2010), "IFPI – Recording Industry in Numbers 2010", London : International Federation of the PhonographicIndustry, 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 aint 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_T11573793886&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T11573793889&cisb=22_T11573793888&treeMax=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 on25.03.11]•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 on25.03.11]•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]

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