African culture and content is taking over the world – from Afrobeats and amapiano, to Nollywood and Netflix originals, to fashion. To what degree can Africans monetize their creativity not only on the continent but globally? To what extent can Africans, as owners of culture and intellectual property, participate in the upside? And if content has been largely an export product, to date, how do *we* develop the local creator ecosystem, as well?
05:11 – A brief history of the creator economy. From aggregation theory to 1000 true fans.
07:59 – We start with the platforms, and TikTok’s Boniswa Sidwaba.
11:11 – A challenge with creator monetization for African creators is the value of their audience to an advertiser. We hear from YouTuber Tayo Aina, with a cameo from another YouTuber, Hank Green.
15:33 – Because of limited monetization opportunities from the platforms directly, creators ink brand partnerships and sell direct to their audience.
19:49 – The challenge with monetizing an audience directly in a market like Nigeria is the poor macroeconomic situation. So content remains largely an export product, says Iroko’s Jason Njoku.
23:17 – But the local fanbase is still incredibly important, and the local infrastructure still needs to be built. It’s what Mr Eazi is trying to do for the music industry.
29:22 – How do we make sure value accrues back to the markets from which the content comes?
31:42 – Our retrospective conversation between The Flip’s Justin Norman and Sayo Folawiyo.
Resources referenced in this episode:
This season is sponsored by MFS Africa.
All this season, we’re exploring value chains. And in the payments value chain, no fintech has a wider reach on the continent than MFS Africa. Through their network of over 180 partners – MNOs, banks, NGOs, fintechs, and global enterprises – MFS Africa’s API hub makes connects over 320 million mobile wallets across 30+ countries in Africa.
This episode features:
Boniswa Sidwaba – Content Operations Manager, TikTok
Tayo Aina – YouTuber & Filmmaker
Mr Eazi – Recording Artist & Entrepreneur
Jason Njoku – Founder & CEO, Iroko
Zamandlovu Ndlovu – Head of Brand Marketing & Communications, MFS Africa
Sayo Folawiyo – B-mic, The Flip
Justin Norman – Founder & Host, The Flip
Audio Production by ZVUK Studio
Justin Norman: I grew up in the 90s, a time when if you asked a kid what they wanted to be when they grew up, they answered with something traditional, something typical – doctor, firefighter, rocket scientist. I called my mom to ask what I used to answer – she thought professional athlete. Though it certainly wasn’t podcaster. Podcasts didn’t even exist when I was growing up.
Ask a kid now, and do you know what one of the most likely answers will be? Social media influencer or content creator.
But what about a kid born and raised in Africa? I’m not sure. I asked my b-mic Sayo, he thought they’d also say creator.
While there is so much said in the collective global discourse about creators and the creator economy, it’s a much less prevalent discussion in the African context. We know, of course, that African markets as a whole lag behind global trends in terms of internet penetration and utilization, or metrics like active social media users as a percentage of the population. But as the continent gets even younger and more digitally native – it’s time we talk about the creator economy in the African context.
And this conversation is important amidst a few secular trends, as well – one is population growth. As the African population gets younger and continues to grow at a staggering rate, where are the jobs going to come from? And how realistic is it that some or many Africans can make a living as a full-time creator?
And the second trend is the increasing spread of African culture across the globe, and in particular throughout Europe and the US. From Afrobeats to African originals produced by Netflix to venture-backed ecommerce platforms creating opportunities for African fashion designers to export to the world, to what extent can Africans monetize their creativity not only on the continent, but globally? And to what extent can Africans, as owners of culture and intellectual property, participate in the upside?
This episode is a continuation of our season-wide exploration of value chains. One fundamental shift in technology gave rise to the creator economy, powered by the big social media platforms. And another shift is changing the nature of the relationship between creators and platforms, and creators and their audience, as well. What does this mean for African creators? Let’s find out.
Justin Norman: Before we start we’d like to take a moment to thank our partner, MFS Africa, for their sponsorship of the entirety of this season of The Flip.
In this episode, we’re talking to and about creators – and what many creators do best is tell stories. MFS Africa is a storyteller, as well, so I sat down with Zama Ndlovu, MFS Africa’s Head of Brand Marketing and Communications, to talk with her about storytelling.
Zama Ndlovu: So storytelling is important because when you have a long-term mission like we do, and we say “making borders matter less”, what you’re trying to do in the ecosystem is not just increase the transactions that go through your network, you are trying to build a supporting ecosystem that grows the amount of activity that’s happening in that ecosystem. When you have that kind of long-term mission it’s more important that you tell a long-term story. And a long-term story is not just about the transactions themselves, but it’s about impact, it’s about what lives that they change, it’s about how they change commerce and the potential for that market, that geography, that continent.
You want to help people think a little deeper about questions that go beyond your product. Questions like regulatory decision-making and how regulation impedes or facilitates innovation and growth. You want to tell stories about the kind of interesting commercial ventures that citizens are doing on the ground and how a service like yours, not necessarily yours, but like yours helps to unlock more potential. And you want to kind of plant the seeds for people to think bigger than just I’m regulating a transaction to I am regulating for development and growth, which is really the question in Africa.
So storytelling is a lot different to normal kind of everyday product marketing in that sense because it really looks at the long-term potential of the market you’re in and the geography you’re in, and it tells the story beyond just your commercial viability. It actually tells the story of the potential of that market, of its people, of growth in different ways, and not just growth in terms of your bottom line.
Justin Norman: We’ll hear a bit more from Zama later in the show on storytelling and the types of stories MFS Africa is telling.
VO: You’re listening to The Flip. The podcast exploring more contextually relevant stories from entrepreneurs around Africa.
Justin Norman: Welcome back to The Flip. I’m your host Justin Norman.
Let’s start with a brief history of the creator economy from a technology and strategy, and a value chain perspective.
Back in 2015, Stratechery’s Ben Thompson coined the term Aggregation Theory, in a piece I’ll link to in the show notes, to explain how the internet – and these so-called aggregators, in particular – fundamentally disrupt all of the industries they touch. Video, taxis, hotel booking, advertising and the classifieds. And perhaps the best example of all: media.
Previously, media companies were those who solved the hardest and most scarce part – which was distribution. Radio stations had their radio frequencies, TV channels had distribution deals, and newspapers owned printers and distributed along their delivery routes. But the Internet made the distribution of content free and in the case of social media platforms, where content is user generated, the supply of content is free, as well. These aggregators get their name by aggregating users – rather than controlling distribution of scarce resources, like a newspaper, aggregators control demand. And in distributing content for free, these aggregators monetized their users’ attention by selling ads.
This shift happened at the same time there was a great proliferation of smartphones, and smartphone cameras, in hundreds of millions of people’s pockets. And these two things, put together, gave rise to user-generated content on these aggregators – the social media platforms – Facebook, Instaram, YouTube and Google, Twitter and TikTok. And these aggregators have built massive, massive value-capturing businesses in the process.
Around the time that the initial aggregators were getting their footing, Kevin Kelly, a founder of Wired Magazine, penned a seminal essay entitled 1000 True Fans, which I’ve linked to in the show notes. The premise is that any creator can make a living with 1000 true fans – those that will buy anything you produce. Sell something for $100 to your 1000 true fans, and that’s $100,000 of revenue per year. Not bad for an internet creator in 2008.
The point was, you didn’t need a hit to make a living – all you needed was 1000 true fans and a direct relationship with them. And on the internet, with its billion-plus users, finding and selling to your niche was, theoretically, without geographic constraint.
Since then, a continued rise of creator tools like Stripe for payments and Substack for newsletters and merchandising companies that enable creators to launch brands and membership platforms like Memberful or Patreon or Onlyfans – these tools have made it cheaper and easier than ever before to not only create content and distribute it on the internet but for creators to sell directly to their true fans.
But we know, in the African context, that a commensurately low rate of social media usage and digital commerce, has had a limiting effect on the scope of the opportunity for African creators.
African content has largely been an export product. And that’s not necessarily a bad thing.
But at the same time, how does the local consumer market get developed? Let’s start there, with the platforms.
Boniswa Sidwaba: We want to make sure that we’re supporting our creators so that they can express and showcase their creativity on the platform, and so that they are seen by audiences that are local in Africa, as well as across the globe.
Justin Norman: That’s Boniswa Sidwaba, who’s responsible for content operations for Sub-Saharan Africa at TikTok.
Boniswa Sidwaba: We definitely encourage both. Sometimes you’ll see that a creator is aiming to reach a local audience as well as a global audience to obviously make sure that they’re tapping into what TikTok is and why TikTok is so phenomenal is the fact that your content can travel.
Justin Norman: These platforms – Facebook, Instagram, YouTube, TikTok, and others – they’re reliant on their users to create the content that they distribute. And they’ve built initiatives and teams to work with and support local creators accordingly.
Boniswa Sidwaba: One of our main focuses is to make sure that we are localizing and we’re making sure that the campaigns and the content that you’re seeing in-app is relatable. And I can very quickly kind of make an example of the genre amapiano, which is a proudly South African sound. It’s grown on the platform and it’s currently sitting on about 1.2 billion views. Language is an important thing as well. We are definitely promoting and making sure that we’re highlighting and excavating indigenous languages on TikTok.
Justin Norman: As part of their localization efforts, TikTok is focused on helping select local creators build out their business.
Boniswa Sidwaba: Recently we launched the Rising Voices project, which is an incubation project, a creator incubation project, that is looking to up-skill creators of color. And this program lasted for six weeks and we introduced local creators to digital skills. We introduced them to mentors in the industry so that they could get a sense of how it’s possible for a content creator to actually make money and earn a living off of being a content creator.
Justin Norman: While that helps TikTokers monetize in a general sense, there are also ways in which platforms can help creators monetize directly. For TikTok, they monetize via advertising, and in their effort to get more local advertisers to buy ads on the platform, TikTok leverages their creator marketplace to create direct monetization opportunities for top creators.
Boniswa Sidwaba: I can say that at TikTok creator monetization is top of mind and we continue to offer opportunities for brands to work with creators that they choose to work with, to help them develop engaging and interactive content for campaigns that they might be running for specific audiences.
Justin Norman: TikTok and others benefit when creators are making a living off of creating content because they’ll keep creating more and better content. And the more that happens in African markets, the better.
Boniswa Sidwaba: I definitely think we’re going to see more and more creators make a living off of what they do on TikTok. It’s already happening outside of what we directly work on or directly facilitate. And those people very quickly start to build those audiences and they very quickly start to grow and become the stars on TikTok and brands reach out to them because they can see that they’re valuable and they can see that they appeal to millions of people. So, yeah, I definitely see creator monetization blowing up in Africa.
Justin Norman: But there’s a bit of a problem here. Platforms have a business model. Sell ads alongside creators’ content. They sell it at a CPM – cost per mille – or the cost per 1000 views. So how much is a view worth?
Tayo Aina: Nigeria CPM is like around a Dollar for 1000 views and averagely, depending on what content it is, it might be higher a little, it might be lesser. US usually has like $10 on average.
Justin Norman: That’s Tayo Aina, he’s a Nigerian filmmaker and YouTuber, whose eponymous YouTube channel boasts 340,000 subscribers at the time of this recording.
Tayo Aina: So somewhere like US has a higher CPM because advertisers are willing to pay more money to advertise to your viewers. If its views coming from the USA, because, because of the demographics. People in the US, they shop more online. There’s more internet penetration. People are willing to buy stuff online more than it is in Africa. So advertisers are more willing to pay more money for an advert on a YouTube video in somewhere like the USA than somewhere like Africa, where the spending power is low, not a lot of people just make those purchases online. So if you make a video, the video has, let’s say 100,000. If most of your viewers came from Nigeria, you probably make people like $100 on that video. But that same video, if most of the viewerss came from USA, you would make $1,000.
Justin Norman: For an African creator with a largely African audience, monetization can be difficult on a platform like YouTube, which offers a revenue share of its advertising revenue with its creators.
Tayo Aina: I think it was like two years, it was two years till I was able to make a sustainable income from YouTube AdSense.
Justin Norman: Now, while the earning opportunity via AdSense may be tenuous for an African creator, given the limitations from a CPM perspective, YouTube is actually one of the better platforms in terms of revenue share and creator monetization. At least half of YouTube’s revenue gets paid out to creators via their YouTube partner program.
Now TikTok, for example, has a creator fund – a fixed pool in which revenue is shared with its creators. It’s $200 million in the US and $2 billion globally. A nice-sized number, to be sure. But it’s a static pool of money that’s shared by TikTok creators. One YouTuber & TikTok creator Hank Green, recently published a video, which I’ll link to in the show notes, about this problem. TikTok’s fund is a fixed amount, so the more TikTok grows, the less its creators make.
It speaks to this question of where value accrues between creators and platforms.
Hank Green: There are more views on the platform. It’s grown. There are more creators. There are more users. TikTik is earning more money, but the pool is the same size. So there are more views with the same number of dollars, so you make fewer dollars per view.
Literally, when TikTok becomes more successful, TikTokers become less successful.
Justin Norman: Hank argues that the creator fund should be much larger.
Hank Green: A billion dollars seems like a whole heck of a lot of money. And then you’re me and you have to go and check and find that ByteDance’s revenue was $36 billion last year. Now, ByteDance is bigger than just TikTok so that wasn’t all TikTok revenue, but it does make you curious.
Justin Norman: While there is a long tail of creators – and a distribution of revenues across the power curve – the goal is n’t to flatten out the curve, but to bring up the bottom and make it possible for those creators to make a living.
Hank Green: If TokTok had the same partnership with creators that YouTube has TikTokers would be making at minimum 16 cents per thousand views. That is six times, six times, what they are making now. Every creator in the creator fund who thinks to themselves, wow, $1000 a month, that’s $12,000 a year, that person could be a full-time creator. They could be thinking about expanding, about hiring, about creating a business in their community, for their audience. This is the economic engine that drove YouTube forward and TikTok is just letting it leak out of the tub into their bottom line. This change would not increase the number of full-time TokToker by six times. It would increase it by a thousand times because just from the structure of the platform, the number of creators making $6,000 a month is a thousand times more than the number of creators making $1000 a month. Like that’s just how it works. The tail is very long and the drop is very steep.
Justin Norman: Oh, and I should also mention, no African countries are eligible for the TikTok creator fund. Meaning no creators from any of the African countries can earn a share of revenue from the fund.
Now I don’t mean to pick on TikTok in particular, as other platforms aren’t necessarily much better. It’s just that Hank Green happened to publish a really good video about it recently.
But the point is that because of this monetization dynamic, creators in general, and African creators, in particular, need to supplement the growth of their business, from a monetization perspective, with brand partnerships.
But for African creators, like Tayo, brand partnerships are largely dependent upon local brands understanding the value of partnerships with creators, as opposed to traditional advertising,
Tayo Aina: So I’ve never reached out for sponsorships. I’ve tried in the past, but it didn’t work. After spending time, I realized that most of these brands, they don’t really understand, they don’t understand the influencer market. They don’t understand the creator or they don’t understand that you doing a sponsorship with somebody who has built a niche audience makes more sense than using traditional media. Brands are just opening up to the fact that creators have this influence and creators can help them market their products. So I think most of my sponsorships have come within this year. Like I’ve had 90% of my sponsorships this year alone.
Justin Norman: Now, the brand partnership and influencer marketing environment is definitely evolving and growing in the African context, as evidenced by Tayo’s recent success in striking brand deals. And in our tech ecosystem, recent partnerships between Burna Boy and Chipper Cash, and Wizkid and Flutterwave are evidence of that, as well.
So AdSense revenue and brand partnerships work because it effectively subsidize the content for the audience, allowing creators to monetize while their content remains free.
But back to Kevin Kelly’s 1000 true fans. What about selling a product or service and monetizing one’s audience directly? That’s an open question too – in an environment with low digital commerce, can creators like Tayo sell a product or service directly to their audience? And if so, what would they sell?
Tayo Aina: I don’t think any African YouTuber has been able to create like a successful merch line where they sell clothes or stuff to their subscribers.
Justin Norman: For Tayo’s part, he’s conducting an experiment on this monetization question. An online course, which I’ve linked to in the show notes.
Tayo Aina: Me personally, I’m currently working on a course, a YouTube course, and it’s also like an area I also want to test out and go into.
If you are able to create value, it has to solve a problem to help people make more revenue, to help people learn more stuff. People will pay to learn. So a course or a digital product or something that makes people’s lives better in some way or form, I think it’s something that can also scale and work in Africa.
Justin Norman: So speaking of monetization and sponsorship… after the break, we’ll hear from two titans of the Nigerian entertainment industry more on this direct monetization question, and on building the infrastructure in the local context. But first, a quick word from our sponsor, MFS Africa.
Justin Norman: Earlier in the show, we about storytelling with Zama Ndolvu, MFS Africa’s Head of Brand Marketing and Communications. For MFS Africa, their story is largely about borders – as they work to make them matter less.
Zama Ndlovu: We all know historically how African borders were created. They were a creation, other people’s creations, other nations’ creations, and they did not consider the ways in which we as Africans related to each other, traded with each other. They barely considered our groupings as Africans.
So there is a very big story around how those borders were created, and how, despite them being there, Africans have continued to keep those long-established relationships and trading routes that they’ve always had. And when you look at, particularly at informal trade between countries, you see these long-established relationships persisting.
So for us, making borders matter less is about creating an infrastructure where people can send money to whomever they want to send money to, and where transactions can be as easy as making a phone call.
What it means for us is that a person shouldn’t feel a boundary between themselves and the transaction that they want to make. They should be able to just do it the same way you can just make the phone call. And we believe that that unlocks immense potential.
Justin Norman: Just before the break, we heard from YouTuber Tayo Aina on his endeavor to sell a product directly to his audience.
When it comes to direct monetization, the question remains – who pays? In terms of paid-for content and direct monetization, African creative remains largely an export product because most of the payers aren’t on the continent. There’s one person who knows this all too well.
Jason Njoku: My name is Jason Njoku. I’m the Founder of Iroko.
Justin Norman: Iroko is the leading streaming service for Nollywood and Nigerian films. And Jason has shared a lot publicly over the company’s 10-year journey on the challenges they’ve faced in selling a subscription service to the Nigerian market.
Jason Njoku: I guess for me, the one true aspect is just content monetizes way better in North America and Western Europe than it does in Africa, unfortunately. As much as the content is coming from Nigeria, the vast majority of the actual value is being created and monetized outside of Africa. I mean, that’s just pure like, you know, GDP per capita economics.
Justin Norman: And in spite of the macro context, Iroko has made a huge effort over the years to develop the market.
Jason Njoku: I think we probably spent somewhere close to $30 million trying to develop the market. We obviously had a world-class product team. We built specifically for Android. We had peer-to-peer file sharing. We set up kiosks across multiple locations across Lagos, Abuja, and Port Harcourt. We had, and we still do actually have, a dealer network of like 500 individual agents who had mobile phones and technology, which enables them to sort of peer-to-peer file share. We needed to create our own encryption sort of content.
So, we did a lot of work to basically try and win Nigeria. And what we increasingly found was that everything we did, as we poured energy resources, the entire focus of the company, that people in the west were still the people who were subscribing, right? So every problem that we solved or we’re trying to solve in Nigeria, every single problem was completely irrelevant to our, essentially our US subscribers.
So again, 10 years ago, the US was our biggest market in terms of revenue. 10 years later, even after we spent a huge amount of time and ignored that market, it still ended up being our largest market.
Justin Norman: So what does that mean from a creator monetization perspective, in terms of monetizing an audience directly?
Jason Njoku: My recommendation has really been and always will be, there are people in the west who have money and they’re willing to pay you and they can pay you. And I think, you know, I go back to music, when you see 5,000 people watching a Davido concert or Wizkid concert or a Burna Boy concert, they paid money to be there. They paid 20, 30, 40, 50, $100 to be there. That’s real money. If you’re in Africa and you see a lot of these concerts, you know, you see that 5,000 people, not many people actually paid to be in that concert. It’s actually a brand activation or some sort of like pre-paid performance type sort of deal.
Justin Norman: So the content needs to be subsidized for the local audience, but the local audience is incredibly important, especially from a legitimacy perspective.
Jason Njoku: I think it’s the most important thing. Nigeria is the amplifier, right? Whatever’s doing incredibly well in Nigeria resonates around the rest of the world. People truly don’t fully appreciate the size of the Nigerian, just audience, if you will. So if you see a lot of Nigerian artists, they have like 5 million, 10 million, 50 million followers. That’s huge. If you think about that, like that could only ever come from Nigerians in Nigeria. And very few artists who will be able to have that kind of solid fan base. So I think my view is that whatever happens in Nigeria, whatever reigns in Nigeria, basically then travels throughout the rest of the world.
Justin Norman: So despite the macro factors that impact monetization of the local market, the infrastructure to grow the local market still needs to be built.
Mr Eazi: you know how when you dream as an artist, you dream of one day selling out the stadium. Those dreams are not my primary dreams.
Justin Norman: That’s Oluwatosin Ajibade, better known as…
Mr Eazi: It’s your boy Eazi.
Mr Eazi: Cause my primary dream is owning the arena where people come to perform. One, because we need the infrastructure. But also because you know, that’s equity in the ecosystem. It’s always, for me, it’s always been an ecosystem play.
Justin Norman: The premise is that ownership is important – ownership of a creator’s audience and ownership of the infrastructure that enables the distribution of content or that underpins the relationship between a creator and his or her audience.
Aggregators play an important role from a distribution perspective – and while there may be limited monetization upside for African creators with an African audience, having a sizeable audience will always create monetization opportunities from a brand partnership perspective.
But to sell directly to an audience requires having a direct relationship with that audience, and knowing who your fans are. That’s not something that’s possible when the relationship is intermediated by a platform, nor is it possible in an environment of scarce infrastructure.
Mr Eazi: I’ve toured at least 15 countries in Africa. But do I have the data? No. I don’t have that data. Like when I go on Instagram, what I’m seeing is just numbers.
Justin Norman: And while the macro factors today pose a challenge to monetization, Mr. Eazi is making a bet on the development of the market, much like other tech infrastructure companies have done as well.
Mr Eazi: The issue people have when they think about African music, they’re like, “Oh yeah, we don’t have the data. There’s not enough data. Oh, monetization of music, how much money are you making?” But there’s only a few people are looking futuristic and it’s the same thing in a business. Who would have invested in Paystack? Like at the time somebody might have said, “Oh no, Nigeria is very cash-based.” And I still hear that today. “Nigeria is very cash-based, there’s no need.” 10 years ago, who would have known mobile money will be as big, you know, they’re more mobile money accounts than bank accounts in some countries. But who would have thought that?
There’s like 600 million people that listen to African music, right now. But you just can’t track them. You can’t find them. But they’re there.
Justin Norman: So the process of developing the local market is necessarily incremental.
Mr Eazi: Let’s call it what it is. How many people can pay for a $300 sneaker? How many of your fans can pay for that? Well, you know, they could, do services. They could buy a soda. They could transfer money with digital banks. They could buy a lottery ticket.
We could start interacting with them from now. I know these people love music, right? And so we could start interacting with them now, and we could start building the structures to interact with them now.
Justin Norman: And you can see how this ecosystem development is playing out in terms of what Eazi has built thus far.
From a music business perspective, typically artists might sign with a label. I’m oversimplifying a bit here, but that label offers you a deal for your IP rights. They bring the cash upfront, and then handle all of the marketing and distribution, and dealmaking with streaming services. Increasingly, labels are also offering what are known as 360 deals, where they may also manage touring and merchandise and brand deals, and take a cut of that revenue as well, which is increasingly a larger share of artists’ overall revenue.
But for Mr Eazi, who himself was an entrepreneur prior to being a full-time recording artist, he stayed independent.
Mr Eazi: And a lot of people don’t know how complicated the music business is. And I just said it to be independent and ultimately build my own ecosystem, my own flywheel, which is where we are at now – which is I’m basically trying to build the coolest music company, the coolest and the most important music company for Africa that just specializes in music from the continent. That specializes in investing in IP, music IP as an asset class. And developing, marketing, monetizing it. And that is Empawa Africa.
Justin Norman: Empawa Africa provides the tools and services independent African artists and other labels need to run their own music businesses. It also acts as an artist discovery platform and has helped to launch and grow the careers of a number of increasingly popular artists, like Nandy from Tanzania, Joeboy from Nigeria, and more.
Mr Eazi: What Empawa has become is a company that invests in multiple artists, develops the artist, gives the artists the creative freedom, but splits on the economics. And multiple artists, so it was like a sort of super aggregator, where 20 African artists from 20 countries can plug into, and then we provide services for the artists.
And I think the power is in connecting the continent. Connecting Francophone music with, you know, East African bongo music Like when everything connects, that’s when it becomes so big. You know, that’s when it can become as big as the Indian scene or as big as, you know, K-pop.
Justin Norman: And for Eazi and Empawa Africa, the IP and ownership piece is important, as well.
Mr Eazi: I think it’s important to have that really homegrown out of Africa for Africa, for, not just the commercial reasons, but also the sentimental reasons of, you know, Africa having a stake in African IP and ensuring creative and economic freedom for African creatives. That’s like the most important thing which has been different for like solid minerals, for instance.
Justin Norman: Even if African content remains largely an export product today, the question becomes – how can the ecosystem ensure the value accrues back to the African markets from which the content is created?
Here’s Jason again.
Jason Njoku: In as much as you can make as much money on YouTube, you can make as much money on Instagram, you can make as much money on all these other platforms, if you don’t own the platforms, you don’t generate the value, right. You don’t hold the value.
Justin Norman: We can use South Korea as an example, which is another country with tremendous cultural export.
Jason Njoku: Korean dramas are hugely, hugely popular, popular all around the world. But the platforms which stream that content, I don’t think any of them are in South Korea. So in reality, I saw the South Koreans have now realized that with the success of Squid Game, that the vast majority, I think it was like $1 billion worth of, sort of value that, you know, Netflix attributed to it. What South Korea actually saw was I think it was $22, 23 million of production budget to create that. But $1 billion of the value and obviously the engagement went to Netflix. So I think what I saw the South Koreans are now doing is that they realize they actually have to invest in their own platforms.
Justin Norman: Now that doesn’t mean there’s no value accruing back to the continent though.
Jason Njoku: A lot of Nigerian artists, essentially, they base themselves in Lagos because they need to build the heat from Lagos. But they essentially, they monetize globally and the money still ultimately still comes back to Lagos. Where do the musicians actually live? Burna Boy lives in Lagos. So all of his money essentially comes back to Nigeria and he spends it in Nigeria. A lot of the value comes back to Nigeria.
Justin Norman: And a more developed domestic market then means even greater upside.
Jason Njoku: On the other side, you have a much, much more developed market like South Africa where Mzanzi content is actually way, way, way more well-monetized in South Africa. And that’s why you have much bigger budgets. You know, people making more money. Productions are much more sort of high class and more expensive in South Africa because they have a local market there.
Justin Norman: So ultimately, like so much else we’ve talked about across past episodes and seasons of The Flip, it comes down to market size.
Jason Njoku: I think ultimately there needs to be a time when the market is more developed, but again, that’s largely in the hands of the macro winds of Nigeria which are just not positive at the moment.
Justin Norman: So we set out to explore a question – how wide is the opportunity for African creators to make a living creating content? If the macro conditions mean African content is primarily an export product, to what extent does that limit the scope of this opportunity? And what needs to happen to expand the scope?
So in our retrospective conversation with my b-mic Sayo Folawiyo, we were focused on this 1000 true fans premise we discussed earlier in the show. How many creators can sell to their 1000 true fans? Take a listen.
Justin Norman: So African creative content as an export product, if that’s the status quo, for the development of the creator economy and for the creator economy to be a wider and more inclusive avenue for like work opportunities in the African context, what needs to happen?
The scope of opportunities within the creator economy, does it map or track to the level of, or the robustness of, the e-commerce ecosystem in a given country? Let’s say digital commerce, right? It could be buying a product physical product, or it could be buying a digital product. But it’s still, the point is that it’s all sold digitally. And in this, the context of the majority of commerce takes place offline in African markets, does that then inevitably create a very low ceiling for the opportunities for creators?
Sayo Folawiyo: So this is the question and is very, very interesting, right? A lot of the creator economy narrative is about like 1000 true fans.
Justin Norman: Right.
Sayo Folawiyo: So when we talk about market size using the same thinking that we do around how big a market needs to be to be viable, should kind of be different. And I think maybe what we’re saying is that while there might be more people that will be able to monetize better off a thousand people, the amount of those people is still going to be quite low, right? That’s what we’re saying. And you should be careful about, like it’s not that Mr. Tayo can’t find a thousand people to buy his course, right, which makes him a viable and sustainable and growing and profitable, blah, blah, blah, creator. I think we’re saying that there can’t be that many of him, right?
Justin Norman: So, a thousand true fans comes with like the implicit assumption that those thousand true fans have high enough purchasing power, right? What does it mean to have a thousand true fans that aren’t going to buy your stuff? Does that mean that they’re not true fans? Or is there an under-monetization happening in this context. In the context of peer-to-peer music sharing via USB, right? The issue is not the fandom. The issue is the monetization.
Sayo Folawiyo: Yeah. I agree with you. There’s two forces at play, right? One is that you need less people with money, right, which would make it likely to be more viable. And then the second is that even with that, you’re going to hit a ceiling. The point, which should be actually a boon to the market size conversations that we’ve been having through the seasons of this thing is, is it’s good for like, you need less people to want to pay for your stuff.
Justin Norman: Yeah. So then that’s where it’s, so that’s what we’re talking about is volume, right? So I suppose in the US or Europe or whatever where there’s a deeper middle class, then there is a greater number of creators who are able to have their thousand true fans and make a living than there are in African markets, because there’s a smaller…
Sayo Folawiyo: Yes.
Justin Norman: Yeah. So that’s what we’re talking about. We’re not, we’re talking about volume and breadth
Sayo Folawiyo: An aggregate. Yeah.
Justin Norman: Aggregate, yeah. And I guess that’s the question, right, this question of can African creators make a living? The answer is yes, but how many? It’s not a yes or no is it possible question, it’s a how many can. And so then back to the original question is what needs to happen in order for that to be realized at scale, I suppose, is the question. We know that people are, and more are going to be able to monetize. The question is how many and how can the development of an ecosystem support a greater amount of creators? And does that just map then to like GDP?
Sayo Folawiyo: The export, I think for sure, I think that’s a no-brainer, right? And the way that we’re moving, seemingly, because we kind of had the selling CDs, right, and you’re paying $10 a CD or whatever. And then you’re getting all your music for free. We went into that and I think we’re going back to $10 a CD. We’re kind of moving towards like a per-unit monetization model. The whole premise, right, is you need your thousand whatever and they’re going to buy one thing at a time from me as opposed to like the… You’re always going to have the motherfuckers that are getting millions and millions and millions of streams at whatever, 10 cents a stream, it makes sense, right? But you’re getting people that are saying, “Actually, I’m not going to try and serve a million people. I’m going to try and serve a thousand and they must buy each song from me for whatever.” And because of these tools, you are able to sell one song at a time. And it seems like where there’s, maybe we’ll end up in the middle of the shift now that the momentum is going towards, back towards the CD.
Justin Norman: The perpetual cycle of bundling and unbundling and re-bundling but then the point I suppose is it ends up not being an either-or. Now there’s like a spectrum or a scope of opportunities and you can make money and people are making money in the unbundled way, and then they are doing re-bundling as well. And then that’s a supplemental or additive revenue stream on top of the unbundled.
Sayo Folawiyo: Exactly. And the argument might be that the business model of the export, and that being able to sell the CD kind of vibe, can subsidize the consumption locally. And then the more that happens, like you kind of have a multiplier effect, right? If you are selling enough to a market that’s buying and then through your channel, you’re employing people, they have more income to spend on these kinds of things. Like you could chart that kind of path. It feels farfetched, but I mean, what do I know? It’s like, I guess that’s what that should look like.
Justin Norman: Yeah, or how it may happen.
VO: That’s it for this episode of The Flip.
Next week, we expand this topic one week further – to talk about ownership. Yes, we can subsidize content for a local audience, but is there now a better way? Be sure to hit subscribe on your podcast app to get that episode straight to your phone.
Thanks as always for listening, and we’ll see you next week.