This article was contributed to TechCabal by Toye Sokunbi of Artish.
In 2016, weeks after charting on the Billboard 100 alongside Drake with “One Dance”, Wizkid was unable to make his set at Wireless Festival due to immigration issues. Back then, Afropop as we know it was only just taking off. Nobody talks about those years anymore. Rema, who is currently touring the world, has been recently spotted with Hollywood mega popstars Selena Gomez and Madonna. Tems has scored a first Billboard #1, and CKay received a platinum certification in France for the viral hit, Love Nwantiti. Any struggle before 2020 is ancient history these days.
The world is getting smaller for African creators. It has been doing that for a while. First due to globalization (pre-and post-transatlantic slavery), then high-speed internet and now post-capitalist protocols led by web3 solutions to trust and ownership problems that innovators couldn’t work around in web2. Central banks worldwide may still be sceptical of words like blockchain and cryptocurrency, but their scepticism hasn’t stopped capital from flowing into those industries. It also hasn’t slowed the pace of disruption led by ever-expanding virtual communities and the saturation of these communities’ accompanying digital economies and sub-cultures on and offline.
The scale of financing and size of any global region’s entertainment and media (E&M) industry is always a direct reflection of how well the region’s economy is doing. For many years, the biggest spenders for the arts have been corporations and private funders from either the US, China, or the UK. But while the concentration of capital in these ultra-prosperous economies hasn’t changed, what’s different these days is how the global E&M sector spends and generates revenue, resulting from the creator economy’s virtual gold rush.
Two interrelated factors have impacted E&M trends since 2020. First was COVID-19 grounding many traditional industries and accelerating the adoption of full-time remote work. The other factor was marketing budgets refocusing on digital ads, as online marketplaces and video streaming ripped apart old media and consumption habits.
To understand how these E&M industry changes affect the African creator economy and its adjacent arts industry, we must go to the beginning of new global history: 2020.
2020 played a critical role in shaping the arts industry we see unfolding today. As mass lay-offs and remote work rocked conventional office culture, people suddenly had more free time on their hands. According to the World Bank, in South Africa, 486,900 new businesses were registered in 2020, a 16% jump from 2019. In Nigeria, nearly 97,000+ new businesses were registered, up 7% from the previous year. The same trend was noticed in many developed and emerging markets around the world.
The distinctive flavour of these new businesses was that most of them were shipping their brands and products digitally. It seemed the creator economy utopia, which proponents of Web2, like Bill Gates, prophesied over twenty-five years ago, got into full swing because of the pandemic. Anyone could open a digital storefront at no cost at all, to either promote their creative work or sell merchandise. Having more businesses online translated to more advertising dollars being spent on the internet, which in turn meant digital creators could also make more, since social media is humanity’s collective window to the rest of the world. As social media usage soared to keep us connected and to provide entertainment and real-time information, its use also became more dynamic. More people took up content creation as a pastime. Platforms like TikTok became the birthplace of viral challenges. Instagram and YouTube became a mainstay for live streams, and traditional public forums like Facebook and Twitter were used to strike and sustain conversations. According to the Global Web Index, by March 2020, at least 3 in 10 persons were creating content of some sort.
The oversaturation of these virtual communities also thinned out the borders for creative work. Africa’s creator economy can now bypass immigration red-tape or the need to brown-nose Hollywood royalty that may have otherwise bogged down their mainstream crossovers. But while that really sums up Afropop since the lockdowns, it’s important not to get ahead of the trendline curve.
For certain art forms and mediums, there was already a foundation in pre-COVID media consumption habits that saw more non-western creators reaching global audiences. The global success of K-Pop supergroups like BTS, Latin-pop megastars like JBalvin and Maluma, and Afropop stars like Wizkid, Burna Boy and Davido came before the coronavirus. Their successes were early indications of how music streaming allowed artists reach new audiences. If anything, the lockdowns accelerated saturation and consumption fatigue for popular creators and art forms that global traditional media had marketed aggressively before the pandemic.
The biggest consequence of the pandemic on global media consumption is how corporate and independent creators and/or advertisers now have to meet consumers where they spend most of their time—on their phones, tablets or similarly smart devices—or risk going obsolete. This is the singular driving force behind the global film industry’s ongoing identity crisis as filmmakers now struggle to decide between traditional cinema releases or going straight to stream. On one hand, OTT (over-the-top) video revenue pushed towards $76 billion+ thanks to streaming. Yet, despite pushed-back cinema rollouts from 2020 like Tom Cruise’s Top Gun Maverick, PWC’s media outlook reports that global cinema won’t recoup its US$45.2bn revenues for 2019 until 2023.
If you think that was a weird analytic, it gets even more anticlimactic.
Streaming revenue is growing, but OTT providers will now have to spend more to potentially reach fewer people. YouTube and Netflix are great cases-in-point for the state of the OTT market in 2022. Alphabet Inc. (Google) first started pumping money into the creator economy via YouTube in 2009 when it pushed $500 million towards emphasising original content and its creators. Last year the tech megacorp boasted of paying out $30 billion to creators over three years from advertising sales, merchandising, and added services. Similarly, Netflix has spent $30.72 billion on original content in the last two years.
The problem, though, is that both YouTube and Netflix are now contending with fierce competition from platforms that appear to be more in tune with the demands of today’s audiences. TikTok is giving YouTube a run for their audience share, while new entrants into the OTT market like Disney+ and HBO Max are forcing Netflix to constantly keep churning the wheels of their subscriber acquisition strategy. Stakeholders are now doubting if throwing more and more money at creators to create original content will convert to growth in subscriptions. For example in India, Disney+ Hotstar, Amazon Prime, Netflix and Zee account for most OTT revenues. But even these corporate giants have to struggle for subscription dollars with nearly 40 other streamers, who may be better positioned to serve localised niche audiences.
To put things in perspective, back in February of 2020 when Netflix quietly launched its services in Nigeria—four years after setting up shop in South Africa—the streaming giant had just announced a year-on-year subscriber-base decline in its biggest market, the US. In April of this year, Netflix announced another fresh loss of 200,000 subscribers globally. The company was also expected to shed nearly $55 billion off its market valuation by the end of Q2 due to a projected 2 million subscriber loss from its over 200 million customer base. Now Netflix is looking at potentially adding commercials and ad-based subscription tiers.
YouTube is also fighting to covet more eyeballs and grow revenues with YouTubeTV (YTTV), a live-TV streaming service it launched five years ago. The company announced $15 billion in annual revenue for the first time in 2020, under the leadership of Alphabet Inc’s CEO, Sundar Pichai. And last year, Google reported YTV had reached 5 million subscribers. However, they did not reveal what percentage of that number were trial accounts or paid, so it’s still too early to say how well the new product is doing. At the moment, Disney’s Hulu + Live TV currently peaks at 4.1 million paying subscribers, and is most likely the market leader.
Despite these odds, there is no reason to believe either Netflix or YouTube will stop shelling out money to African creators. Mid-budget Netflix Originals set in modern Africa, like Blood Sisters, How To Ruin A Christmas, King Of Boys, and most recently Kenya’s original series debut, Country Queen, indicate a tilt towards a long-desired refinement because filmmakers now have a little more leg-room to experiment and tell better stories. Despite these gains, the promise of virtual communities towards ensuring equal distribution of wealth across race, creed or gender globally may still not be a reality until actor-network effects start to impact the long tail of African arts.
The long tail power law, an economic idea for the digital age theorised by former WIRED editor-in-chief, Chris Anderson, suggests small consistent sales of creative work could potentially outsize comparatively big-budget seasonal rollouts, as a result of actor-network effects like word of mouth and recommendation algorithms. Anderson’s theory was further popularised by Kevin Kelly, another founding WIRED executive, as the 1000 True Fans business model for monetising creative work by generating revenue from 1000 consistent subscribers. Anderson and Kelly’s vision was of a truly democratic internet where niche creators could make a living off pockets of small but dedicated fan bases.
But this was over a decade and a half ago, before platforms like Facebook, Instagram and Twitter began aggregating user activity using metrics like likes, follows and retweets to make content easier to monetise. Critics have since questioned the validity of the long tail theory of a 1000 True Fans, especially since the end result of Web2 has been more similar to the old-fashioned mass market superstar effect, where few creators at the top of the pile chunk out nearly all of revenue for millions of other mid- to lower-level creators in the ecosystem.
In African music for example, while new Afropop success stories from the lockdowns like Rema, FireboyDML, Tems, and others have taken the world by storm, they have also widened the gap it would take for a new artist trying to break into the industry, to reach the same heights. It’s no surprise that mid-tier independent artists like BNXN (formerly known as Buju) have started cornering the NFT market not only for alternative sources of revenue but also to connect with fans outside of music. Last year, the singer dropped the HeadsByBNXN NFT collection, a set of jpegs consisting of different colours and stylisations of portraits in BNXN’s animated likeness. HeadsByBNXN also promises holders perks like free events, merch drops, and a creator fund, which points towards new ways artists are thinking about fan engagement.
The latent superstar effect of Web2 is no different for the rest of the art world either. The biggest and most popular digital artists in Africa today are Osinachi and Anthony Azekwoh, and between them, the combined value of their highest selling work is just under $130,000, which pales in comparison to Beeple’s landmark sale of $69.3 million at Christie’s, the same auction house that sold Osinachi’s most valued work till date for $80,000.
The biggest problems that will result from how the superstar effect is eating up virtual communities could be problems we have to contend with today, or for many years to come. Immediate issues could be limitations a handful of algorithmic influencer hubs would pose on the discovery of new talent. Future problems—as the world heads into the metaverse, surely and eventually—could be the suffocation of the innovative niche voices that serve critical actor-network functions in the adoption of new technology.
In one of the more grounded viral clips from Kendrick Lamar’s recent trip to Ghana as part of promotions for his new album, Mr Morale and The Big Steppers, the rapper is casually on a Playstation console in a street gaming booth. He’s flanked by his opponent and crowded by other kids waiting their turn. Gaming in the streets is a universal story, and its relatability is only amplified by a rare moment like a notoriously reclusive world-famous rapper playing FIFA somewhere in the trenches of Accra. The scenery not only highlighted how big gaming is as an African grassroots subculture, it also begged the question of why gaming hasn’t found a bigger niche in our start-up culture.
Metaverse Magna, an Africa-focused gaming guild, recently announced a $3.2 million raise to build “Africa’s largest gaming DAO and provide gamers with access to world-class opportunities.” Back in August, Skrmiish, a Cape-town-based gaming start-up also announced a $2.5 million seed round to build play-to-earn games. But MVM and Skirmish are still micro pieces and African outliers of a global gaming industry whose revenues rose to $200+ billion last year.
Virtual communities are levelling-up Africa’s creator economy, and its potential to empower Africans is also greater than ever. But more innovators in the ecosystem need to be funded and boosted by policy to find a niche, lest Africa may play catch-up while the rest of the world looks to new tech like the metaverse—gaming’s logical progeny—for more long-term sustainable solutions to problems that still plague the creator economy today.