Music streaming services have had some success in Sub-Saharan Africa but it has tended to be in the larger country markets. This week we talk to Vodafone Zambia's B2B Director Hassan Abbas about how it has tackled music streaming and how it might adopt the same approach with other upcoming services.
Afrimax - which runs Vodafone Zambia - was founded by mobile telephony entrepreneurs Jay Metcalfe (Chairman), Peter Langkilde (Chief Executive Officer) and Rob Philpott (Chief Financial Officer) who, for over twenty years, have been involved in telecoms start-ups, operations and financing in Africa and around the world including Millicom, Celtel and BellSouth.
In 2014 it signed a partner market agreement with Vodafone to use its branding and products and services. It has rolled out in four countries so far: Uganda (its first roll-out), Zambia, Cameroon and Ghana. In Zambia, it is primarily focused on offering an LTE data service.
The catalogue for Vodafone Zambia's app-based music products is 30 million songs and includes tracks from Warner, Sony and independent music distributors CD Baby and Tune Core. As Abbas told me: "We get content from an aggregator partner I worked with when I worked with Digicel in Jamaica".
"The way we're doing things here (in Zambia) is different to everywhere else, indeed it's different from how we did elsewhere.
Vodafone Zambia's main competitor on music streaming services is the MTN Play Zambia app which offers roughly 20,000 tracks. Zambia has an estimated population of 16.45 million, of which over 3 million are MTN subscribers. The Google Play site shows that MTN Play Zambia has been 1-5,000 downloads.
Abbas says that Vodafone Zambia has a very high active music subscriber base, which is "close to 5% of our subscriber base." Obviously Vodafone Zambia has a smaller and probably more up-market subscriber base than MTN.
Its music streaming service comes in two flavours: the Premium Unlimited service (30 million songs and offline playlists) and the Top 40 service offers users 40 songs for free. With the latter, users can download any 5 selected tunes from their own personal playlist: "If you like Taylor Swift, you can play it as your favorite album."
If the user is on a plan that doesn't have the premium data service, it costs US$5 a month but otherwise it is packaged with the data service: "You can listen to up to 15 hours' worth of music for free. But if you're on a premium data service (10GB for US$25), you don't pay for the service. The Top 40 service is free to any subscriber".
My Vodafone Zambia has between 100,000-500,000 downloads. The average music streaming session is 30 minutes: "It works and our customers are happy. They are consuming more data on the network even with free data included. It impacts by lowering churn and improving consumer satisfaction."
Who is using the service?:"The intuitive answer would be youth. The biggest segment is 24-34, young professionals. They use it both at work and coming from and going home. The most used time for listening is between 10-6pm".
What about international vs local content? The answer is not quite as you might expect: "We have had to have local content. If you don't have local content, you just won't cut it. (The users) recognize it. At the time of launch, we looked at top Zambian content and signed up 80% of that content. Use is tilted to local content but only a relatively small percentage of our Top 100 is Zambian. We would assume 30-40% local content listening from surveys so people don't listen so much to local. We do a Top 40 curated list of Zambian artists and that may be good enough for them."
The app is now being pre-installed on phones: "When it's on the phone, people will activate the app and I don't see why (that increased level of activations) will not sustain itself."
What do the Zambian artists get out of it?:"We don't deal directly with artists. The distributors we deal with - CD Baby and Tune Core - have their own terms and conditions that we follow when they sign up with the artists directly".
Vodafone Zambia is currently working on other services that will follow the same model as its music streaming service. Abbas believes in using targeted survey data followed by cojoint analysis approach to pinpoint consumer behavior and the best pricing models: "I think content driven services will work if there is capacity to deliver good content securely, particularly regional and international content including kids content. If we're able to add content into our data plans without more data costs, adoption will be high. The way to manage that will be to put content into our own data center. We'll then be able to give a very good all you can eat deals and create plans based on users' needs".