Having been promoted as the iTunes of Africa, Nigerian music platform Spinlet ran into the realities of being early into a market where paying for music was still barely accepted. It changed CEO in 2015 and has begun to generate revenues and change its positioning. Russell Southwood asks the big questions to CEO, John Ajah
Q: What state was Spinlet in when you took over?
A: Interesting question! I joined Spinlet in 2015, the business was under the leadership of Dr. Nkiru Balonwu, who started the efforts to transition the business into an entertainment technology firm positioned to deliver value across different verticals with the African entertainment and media industry. The business was still in transition when I was appointed CEO in 2016, so I continued the good work Nkiru started during her time as CEO.
Q: What changes have you made and what has been the impact?
A: Spinlet Value-Added Service (VAS) operations was one of the key components of our transition plan, it provided us with a good opportunity to grow revenue for the business. Working with my team, we intensified our content distribution through our VAS channels and we also concentrated on development efforts into transitioning our streaming platform from a customer-facing service into a business-service that will provide streaming-platform-as-a-service for businesses across Africa looking to create and manage streaming platforms.
Before the end of 2016, we started recording significant growth in our revenue from the VAS operations. By the end of last year, the business had generated over US$1.2 million in revenue from both the VAS and streaming operations, with an outstanding 500% year-over-year growth from the streaming service.
Q: What's the transition plan?
A: Between 2011 and 2015, our business invested significantly in growing our customer base and consumer interaction on the platform, and we reached a peak of 2 million users interacting on our platform through our freemium service offering, but the paying user base never grew beyond 10% of freemium users. We launched our first B2B business in 2015, and four years down the line, the company has recorded significant growth in revenue.
So, our goal is to create technology solutions for businesses who are looking for ways to use entertainment to engage with their customers; for example, in the last 12 months two of the leading banks in Nigeria have launched streaming services. MTN has acquired Simfy Africa. These are non-entertainment businesses diving into entertainment technology. Our value offering is designed for companies like this, who want to use entertainment to improve network effect. With Spinlet, these businesses can launch streaming services or any other entertainment-centered service within 1-3 months of ideation at a reasonable cost, with reduced risks.
Q: How many active users (at least once per month) have you got? Are these all paying users?
A: Over the last three years, we have maintained an average of 300,000 active users on the platform, with just about 10% of the active users paying for a subscription or content on the platform. Since part of our transition plan was to move away from the customer-facing business, we focused most of our efforts in developing the technologies that would enable this transition, rather than growing the user base.
Q: Which countries are they in and what percentage are Nigerian users?
A: Over 60% of our users are from Nigeria, with the remaining 40% scattered around with world - where USA, UK, Ghana and Germany are at the top of the list for the other countries where users engage with the afro-centric content on our platform.
Q: What percentage of users stream vs download?
A: It's 90:10 in favor of streaming, as with most of the other players in this space, most users are more comfortable with streaming content than downloading them, especially where platforms like ours provide offline streaming.
Q: How do users mainly access the service? On mobile, laptop, tablet or PC?
A: Most users access the Spinlet plaform using their mobile devices. It is a 75:25 split in favor of mobile devices, and this isn't surprising with the massive growth in mobile device usage across Africa in recent time.
Q: How many tracks are available on the platform? Give me some highlights
A: At the moment, we have over 2 million tracks, of which over 60% are of African origin and the rest from independent artists from around the world. When you want to find the up and coming talents looking to be heard around the world, I recommend Spinlet. Our editors routinely go through newly released content to showcase unique content on the platform at no cost to the artists.
Q: What do users tend to listen to most by genre? Give me some examples of very popular tracks.
A: The top streamed or downloaded content are usually the Afro-centric once from legends like P-Square, 2Baba, M.I, etc. So, all things Afro will take the day for users on Spinlet. They enjoy albums like Double Trouble by P-Square, or Empire Mates State Of Mind by the E.M.E and tracks like Gbona by Burna Boy or Finding Efe by Johnny Drille.
Q: What do you know about your users?
A: We respect the privacy of our users, so we take only the information that would allow us give them an amazing experience on our platform, so we want to know which generation they belong to and their gender, as it helps us to deliver the best music experience possible for each user. We also want to stay in touch with users by mail or telephone, so we hold these details too. Outside these, we do not collect any other information on our users.
Q: Who are your main competitors?
A: BoomPlay is chief among our competitors, as well as Simfy, Songa, UduX, and Mdundo, these are direct competitors across Africa, then you have the global platforms that everyone knows about.
Q: What plans have you got in the next 18 months to 2 years?
A: Over the next few months, we will be launching a few streaming services using the Spinlet streaming-platform-as-a-service offering, as well as other entertainment technologies, I cannot reveal now, but the next 18-24 months are going to be very exciting for the Spinlet team and the African entertainment industry. Our goal is to continue to support the work of all African creatives by providing technologies that allow their voices and their creativity to be seen and appreciated around the world.