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Leading streaming services around the world generate revenue by selling premium streaming subscriptions to their users. These platforms in turn pay artists royalties according to how much their music has been played over a period.
Others, like well-known service Spotify also use a freemium business model that is free to users — albeit with limited features — and is supported by third-party advertising placements.
Such paid services can cost between $4 to $10 a month, fees that might be out of reach for users in low-income countries in Africa.
It doesn’t help either that many music lovers on the continent don’t have a credit or debit card, which is often vital to make use of a streaming services.
Playfre was founded in May and has signed up over 3000 users
Inspired by an article by the UK’s Guardian newspaper on why subscription streaming is ignoring six billion potential customers in the developing world, Nigerian computer programmer and tech entrepreneur Chika Nwaogu (pictured above) believes that he may have figured out a streaming business model that works in Africa.
Nwaougu is the CEO of Lagos-based free music streaming platform Playfre which he founded in May with the help of his twin brother Chidi Nwaogu. The duo are also the founders of digital publishing startup Publiseer.
Chika says he founded the startup to provide a streaming service that offers a seamless music experience that is free for music lovers and also beneficial for artists.
Three months since its launch, the platform has signed up over 3000 users and claims to have a catalogue of 49 million songs from more than 1.9-million artists.
He explains that those Africans that can afford to pay have been waiting for services like Spotify and other big players to launch in their countries, but to no avail.
“Other existing music streaming platforms charge huge subscription fees which are not affordable to most Africans as data cost is still a big issue in these parts of the world,” he points out.
Lower fees, he explains, can lead to a significant reduction in revenue for content owners, something Chika says he didn’t want to do.
‘Curational cum music streaming service’
Chika describes his startup as a “curational cum music streaming service”. The platform itself does not store any songs on its servers, it instead matches songs to their corresponding YouTube videos.
He explains that when a user plays a song on the platform, they are actually doing so through a YouTube embed. As such, every time a song is played on the platform a view will be added to artist’s YouTube channel.
“So our over 600 000 streams in the past two months actually means we have helped artists achieve over 600 000 views on Youtube. So in essence, this actually leads to increased exposure for content owners,” he says.
In instances where the artists have monetised their content on YouTube, the increased exposure translates to revenue for the musicians.
Playfre generates revenue by promoting artists so that they get “maximum exposure” in a crowd of millions of songs.
“We do this by placing them in officially curated playlists and also in a carousel. Here the artist pays us for that. A good way to get their music noticed,” says Chika.
Generated $1000 in three months
He says the startup has made “a little above $1000” in the past three months this way.
“We hope that this figure grows exponentially as the music streaming service continues to grow,” he says.
When asked if the platform would consider adding advertising to support its freemium model, Chika says the startup is “looking towards this”.
“But again we really think that ads like Google Adsense can ruin the fun. Less obvious ads like the ones you currently see on Playfre, where a song by an artist is promoted by a banner placed at the top of the site is less annoying.
“Our users will not see this as actual advertisement, but in the broad sense, they are. They will see them as though it is just featured music, but on the other end, we are being paid for that — which makes it an ad,” he explains.
Chika says he is not worried about competition from the likes of Apple Music, Spotify and Deezer as the startup’s target market can’t afford the services its competitors offer. Playfre’s competitive advantage, he says, is that it is free.
Playlists for users
But why would a listener opt to use the service when they can play music directly off YouTube?
His response is that the startup helps users create playlists of their favourite songs.
“Our thousands of users tend to like this as they get to discover new music, find music by genres, create playlists of their favourite songs and follow other users playlists much like every other music streaming services out there, something they can’t do on YouTube.
“It’s a fun way of discovering YouTube videos,” says Chika.
Playfre automatically generates artist profiles including discographies, bios, album information and lyrics.
‘Looking to raise up to $1m’
The bootstrapped startup is yet to secure funding with its two founders having invested $5000 in the platform to date. Chika says Playfre is looking to raise between $500 000 and $1-million in the near future.
“It will be mainly used to promote Playfre across the continent, get more music editors to create localised playlists for their countries and genres, set up offices in these locations and actively help African artists monetise their creative contents,” he explains.
The platform, which has operations in Nairobi, hopes to expand to Egypt, Ghana and South Africa. In addition, Playfre is currently developing a desktop app for both Windos and MacOS platforms.
‘Music industry executives concerned’
Chika says he’s received messages from music industry executives and international and local record labels who have concerns about how the service can benefit artists.
These he says include Nigerian Copyright Commission director general John Asein and Universal Music’s legal representatives in Nigeria Punuka Attorney and Solicitors.
He adds that in a recent chat with Dragon Africa founder and chairman Asa Asika, who also founded the now defunct Storm Recors, he had to explain what Playfre is about and how the platform can benefit YouTube content owners.
“So initially it was a struggle explaining to them how a free music service like Playfre can benefit music owners in any way. But we are doing it!”
The startup is yet to sign any agreements or partnerships with record labels. However, Chika says it is working with music studios across Nigeria and Kenya to get up and coming artists on the platform.
In June the startup launched a music distribution subsidiary, SongRoute, to help African artists monetise their content on Playfre as well as in over 400 digital music stores in a 100 countries.
Says Chika: “Many budding and talented musicians in Africa live on a dollar per day, just as in any third-world nation, and thus cannot afford to publish and monetise their creative works by paying for it.
“Thus their breathtaking works remain undiscovered for years.”
Featured image: Playfre CEO and co-founder Chika Nwaogu (Supplied)