LT2014, Global Music & Media Distribution, In-Class Presentation, London Metropolitan University, London, UK (April 2011) Topic: An Analysis of the South African Music Market http://uk.linkedin.com/in/marianzinn http://about.me/marianzinn

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

4. RECORDED MUSIC SALES
Sources: IFPI, 2010; 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
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(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
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•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
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http://issuu.com/musicweek/docs/southafrica [Accessed on 25.03.11]
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