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JUNE 2018
MARABOU DIGITAL SERVICES
BUSINESS PLAN SUBMITTED IN COMPLETION OF GRADUATE
THESIS AND CULMINATING EXPERIENCE
ABAASA RWEMEREZA
BERKLEE COLLEGE OF MUSIC
0733404
Table of Contents
Business Plan Template ........................................................................................................ 3
1. Executive Summary ........................................................................................................... 3
2. Company Overview ........................................................................................................... 8
3. Business Environment/Customer ................................................................................. 11
4. Marketing Strategy.......................................................................................................... 14
6. Implementation Plan and Products to offer ............................................................... 15
7.Evaluation Metrics and Control ..................................................................................... 22
Appendix................................................................................................................................ 27
2
Business Plan Template
1. Executive Summary
Marabou Digital is a music consultancy firm offering campaign
management, marketing and business development strategy services to
artists, indie labels and artist managers in the East African region. We
also offer digital distribution, data analytics and media tracking services.
The music industry in Uganda and East Africa has always taken
small gradual steps towards full functioning and capacity, however, with
the limited local solutions and lack of expertise, it’s difficult for an artist
to break through the African and global market. In the digital age, with
the potential routes to the consumer multiplying by the day, the process
of introducing an artist to the wider commercial mainstream is fraught
with complexity, be it via press, radio, TV, online, streaming services or
social media. What is the best timing? How will the artist stand out from
the crowd? What can be done to secure taste-maker buy-in? How can
the artist reach the broadest number of people globally and maximize
efficiency? How can we track the use of our music?
Who would be interested in Marabou? Record labels, music
publishers, artists and songwriters, artist management companies,
brand and ad agencies, music promoters. We strive to provide music
companies, independent artists and label partners with access to the
resources, relationships and experience required to share their creative
vision with the African and global audience.
3
Marabou offers an unmatched set of local solutions and worldwide
services, including:
•
Customized label services and campaign management by release
and territory
•
Product management and execution of digital marketing
campaigns, content creation and promotion plans.
•
Data analytics, insights and reporting.
•
Rights administration and catalogue management
•
Radio promotion, publicity, and marketing services managed by
our East African network of PR, Radio and online promoters.
•
Dedicated sync licensing for ad agencies and short film production
houses.
•
Market Intelligence and Consultancy
•
Future Products: Worldwide sales, distribution, and digital
marketing including global account management for key digital
retailers, Airplay monitoring and audio tracking.
Marabou aims to set itself apart from competition by being a
boutique media and technology analysis company. What’s good for the
artist is good for the industry. We focus solely on the intersection of
music content and technology, working with both the biggest East
African artists and early stage DIY musicians. We combine bold, forward
looking vision with practical, actionable advice.
Possible actions to be taken in response are based on building
solid local East African partnerships and a global network of
collaborators; Initial investment in order to cover administrative costs
such as website development, setting up a digital distribution API, and
4
building a localized data dashboard in order to frame a robust value
proposition;
Introduction:
The socio-economic structures of the Ugandan population play an
important role in understanding what framework the culture is going to
stand on and at the same time support. This framework is undoubtedly
affected by varied factors: average income, literacy rate, political
climate, GDP, population growth rate. Uganda being an agro-based
nation, the Government mainly focuses most of the budgets around
farming incentives and crops. Minimal focus is put on the arts, culture or
entertainment.
In order for one to understand the context of this discussion, one
must keep in mind that Uganda is a small country (241,000 km 2, about
the size of Minnesota)1 and much of the infrastructure is still in
development. The major road networks are under construction and
urban development is still on the rise. This affects exchange of goods or
services across the country by centralizing music activity around major
cities; Mukono, Jinja, Mbarara, Lira, and Kampala the capital. We have
also experienced an upturn in terms of mobile phone coverage, music
distribution through YouTube and the general attitudes towards
copyright protection.
Uganda has a population of 43.57 million2 with 18.4% living in
urban areas, 1.52 million in Kampala the capital. Between 2002 and
Website:
https://photius.com/countries/uganda/geography/uganda_geography_location_and
_size.html
2Website: http://worldpopulationreview.com/countries/uganda-population/
1
5
2014, the urban population further increased to 6.4 million3 attributed
to four factors, namely; the gazetting of new urban areas, natural
growth (that is, excess of fertility over mortality), redefinition of the
boundary of selected urban areas and rural - urban Migration. Between
2002 and 2014 the population increased from 24 million to about 35
million representing an average annual growth rate of 3.0 percent. 4
3
4
Uganda Bureau of Statistics, 2015 Statistical Abstract.
Uganda Bureau of Statistics, 2015 Statistical Abstract
6
Rise of the consumer opportunity rests on five pillars: the rise of
the middle class, exponential population growth, youth dominance,
rapid urbanization and quick adoption of digital technologies. Population
growth is on the rise. In Africa in general and estimated to rise from 1Bn
to 2Bn by 20405 In Uganda 21%-50% of population is middle class and
this rise is signified by rise in aggregate household expenditure, broadly
defined as those living within the $2-$20 daily budget.
5
Deloitte Africa Report (2014) Pg. 14
7
2. Company Overview
Mission Statement: Our service is digital marketing, rights management
and market intelligence for the East African market as we provide
worldwide digital distribution and data analytics for DIY artists, record
labels, managers and collective management societies who are
dissatisfied with the lack of data feedback and distribution. Unlike
Africori, or CCA we are based in East Africa and offer digital marketing
and consultancy.
Business Model: Our business model revolves around the customer and
their needs. We offer free distribution and rights administration for their
digital catalogue. We also have a digital marketing and analytics
premium tier which involves monitoring, tracking and reporting usage of
their catalogue in addition to market intelligence and consultancy which
allow the customer to understand how to use their data in the most
appropriate way to grow their business.
Competitive Advantages: Competitive advantage is a set of unique
features of a company and its products that are perceived by the target
market as significant or superior to the competition. We have low cost
raw materials for example we are outsourcing a number of services (like
the digital distribution and audio fingerprinting software) in order to
maximize value for the customer. We have a skilled workforce of
industry executives and music producers who understand the Ugandan
music ecosystem and understand digital marketing. This enables us to
have an advantage as we provide business and market intelligence to
help customers have more insight and understanding on how to
8
maneuver the East African music industry. We are Outdustry with a
focus on African and East African markets.
Legal Form: LLC with plans to incorporate.
Competition: Below we’ve outlined some of our competition in the
digital environment, in order to understand what they’re doing and
analyze where the opportunity might exist for us.
• Electro Mode: is a South African music company that specializes in
digital and physical distribution, manufacturing, online advertising
and graphic design. They offer detailed design packages, from
album covers to social media, and distribute physicals and digitally
to all the online stores (including African ones).
http://www.electromode.co.za/distribution.html
• Africori: is a music distribution company with offices in South
Africa and Nigeria. They offer digital distribution to over 200
download and streaming outlets in Africa and all over the world.
They also deliver to various mobile stores and telecom operators
(who have made business models around caller ring back tones)
They also do licensing for TV, ad commercials and movies through
a synch-licensing platform. Africori also does collection of
publishing and neighboring royalties from collective management
organizations all across Africa and the U.S and Europe.
http://africori.com/
• JTV digital: is a distribution company offering digital distribution,
client support and label services. They us a pay-as-you-go model
9
with no subscription fees and free UPCs and ISRCS. They also take
care of reporting and revenue collection with a monthly report.
JTV offers artist services which include cover art, youtube
monetization, Vevo & itunes channel setup, song licensing with
Loudr and Easy, digital radio plugging and radio airplay
monitoring.
https://www.jtvdigital.com/
• Content Connect Africa(CCA): is a 360 entertainment and digital
partner based in South Africa. They offer digital distribution of
audio and visual content, content marketing, blanket licensing,
royalty collection, music video plugging and collaborations with
various African stars.
http://www.contentca.co.za/
Services
Digital
Offered
Distribution
Licensing Data
Tracking
Consultancy
Analytics and
Reporting
ElectroMode Yes
No
No
No
No
Africori
Yes
Yes
Yes
No
No
JTV Digital
Yes
No
Yes
Yes
Yes
CCA
Yes
Yes
No
No
Yes
Nazwo
Yes
Yes
No
No
No
Musica
Yes
No
No
No
No
10
3. Business Environment/Customer
Market Assessment: On analysis of the market, we found out that there
are few factors to consider. We identified 3 main issues affecting the
Ugandan industry. These revolved around:
• Policing copyright infringement through take downs and finger
printing.
• Challenges with tracking and reporting digital usage and ensure
proper remuneration.
• Airplay data in order to justify public performance licenses paid
out
by
UPRS
(Uganda
Performing
Rights
Society)
and
UMA(Uganda Musician’s Association)
Uganda is a small nation in terms of physical area however
population the is over 43,979,256 people. Populations are focused
around four main cities; Kampala the capital city (with 1.3M people),
Gulu (146K), Mbarara (97K), and Jinja (93K). These are important in
understanding where the key markets are and where the business can
really get to customers who need our services.
Uganda has a very young demographic, 48.47% of the Uganda is
population being in the 0-14 age group, 21.16% of the total population is
dominated by the 15-24 age group while 28.34% of the population of
Uganda is in the 25-64 year age group.6 This allows us to make estimates
in terms of where the digital music industry can grow. 41% 7 of Ugandans
http://worldpopulationreview.com/countries/uganda-population/
http://www.dignited.com/22706/jumia-white-paper-ugandan-internet-usersmobile-penetration-plus-m-commerce-trends/
6
7
11
are internet users, meaning there is room for expansion into the other
59%. Mobile subscription is at 65% and is driven by a competitive mobile
landscape which has proved to be favorable to Ugandan consumers.
Since most of the music fans are mobile phone customers these
statistics can provide us with a solid basis on which to be optimistic
about the future of the Ugandan digital industry and in turn focus our
marketing initiatives on small to medium enterprises that are developing
and breaking artists on the landscape.
The telecommunications sub-sector posted an increase in the
number of subscribers in the year 2014. In the context of
telecommunications, any registered active line/SIM (active means the
line has registered a transaction or more within the last 90 days) is
considered a subscriber. 12.8 percent increase in telephone subscribers
from 18.3 million subscribers in 2013 to 20.6 million subscribers in 2014 8
A significant 55.9 percent increase in the total number of internet
subscribers was realized and this was due to a 12.4 percent increase in
the fixed internet subscribers and a 57.1 percent increase in the mobile
internet subscribers9
Number of Mobile Money Transactions increased by The number
of transactions increased by 28.9 percent to 49.4 million with a value of
2.3Bn Shillings.
Information and communication activities include; publishing
activities, motion picture, video and television programme production,
sound recording and music publishing activities, programming and
8
9
Uganda Bureau of Statistics, 2015 Statistical Abstract pg 66
Uganda Bureau of Statistics, 2015 Statistical Abstract Pg 66
12
broadcasting activities, telecommunications, computer programming,
consultancy and related activities. Information and communication
activities grew by 0.7 percent in FY 2014/15 compared to a growth of
12.1 percent in FY 2013/14. The slow in growth is due to increase in
intermediate consumption and competition amongst the different
players in the subsector. 10 Arts, Entertainment and recreation activities
include: creative, arts and entertainment, Libraries, archives, museums
and other cultural activities, gambling and betting, sports and
amusement and recreation. Arts, entertainment and recreation activities
grew by 0.5 percent
Our market would be record labels, DIY indie artists, Artist Managers
and booking agents who would need the service in order to make their
digital campaigns more robust. They would be able to distribute their
music globally, get actionable insights and also be able to act on the
information they receive to inform business decisions. There are also
opportunities for use by collective management societies (UPRS and
UMA) in order to handle rights management, tracking and monitoring
and to deliver feedback and analytics to their customers to ensure the
right license fees.
Some of the key labels Swangz Avenue, GoodLyfe Crew, Game Over
Yard, Leone Island Crew, Gagamel Entertainment, Big Talent, Angel
Music, Buddies Music Inc, Striker Entertainment, Badi Music, Fire Base,
The New Eagles, Team No Sleep Entertainment, Gifted Music Group,
Kwanza, Dustville Records, ROW Records, Navcorp, Elevation Records,
Hannz Production House.
10
Uganda Bureau of Statistics, 2015 Statistical Abstract Pg 75
13
4. Marketing Strategy
We have a website which clients can visit in order to provide them with
more information on what kind of services we offer. Potential clients
can also request a demo whereby we conduct a free digital health-check
and give them some insights and viewpoints to enable them to build a
strategy and further consult us on how to implement the ideas.
We also plan to do marketing activations and events during exhibitions
and conferences. This will allow us to educate more people about what
we can offer and the advantages of using our services. We’ve built a
stable network of contacts in the East African music industry and we
plan on expanding by making some of the products available for trial.
14
6. Implementation Plan and Products to offer
This is a detailed section outlining some of the key services we are
offering and how we are going to tailor them even more to suit the
needs of the client.
Content Creation and Digital Marketing
We assist artists and labels in building winning digital content
strategy with Marabou’s impactful consulting and cutting edge insight
and advice. We help East Africa’s leading artists and music companies
understand the competitive marketplace and to profit from their digital
content.
We work closely with small client teams or individuals to help
understand how you work and make decisions in your organization so
that you clearly understand our solutions and can put them into
practice.
Whether you are a best-selling artist or just starting out we’ve got
a social media package perfect for you. Your social campaign will be
delivered by a team of dedicated in-house and out-sourced experts.
From brainstorming sessions to idea implementation we’ve got it
covered when it comes to delivering fresh and exciting social content
across all your social platforms. We have two social media packages
available, our social media starter pack and the social media pro pack.
We tailor our offering based on your needs and budget.
Our core strengths:
❖
Big-picture marketing vision
❖
Creative but data-driven business strategy
15
❖
Innovative new product or service propositions built on key
insights
Rights Management and Digital Distribution
Marabou is the easiest way for East African musicians to get their
music on iTunes, Spotify, Amazon, Google Play and all the African stores.
Through our partners you can upload as much catalogue as you want,
keeping 100% of your royalties. Marabou Distribution is for solo
musicians, bands, DJs, performers and producers and Youtube creators
who record music at home or in studio. We also have services for labels
and publishers with substantial catalogue.
We offer full copyright and catalogue management, allowing you
to manage all recording and publishing copyrights, metadata and assets
This makes it easy for management to track rights across the digital
marketplace. You’ll know what copyrights are being used, licensed,
monetized, and claimed.
We offer centralized catalog management through A fully
integrated, powerful copyright platform that runs your digital business
online. This allows you to save time by managing all recording and
publishing assets in one place.
Managers and Artists can deliver consistent, streamlined and
perfect metadata, across the marketplace, easily. This will Improve
monetization and revenue collection and take the pain out of updating
copyrights on all the major online music services.
We can also offer public performance and neighboring rights registration
and collection. Artists can register with either UPRS(Uganda),
UMA(Uganda), RSAU( Rwanda) PRiSK(Kenya), KAMP(Kenya),
16
KOPIKEN(Kenya), COSOTA(Tanzania) and administer neighboring rights
and collect performance royalties for master recordings.
Data Analysis, Insights and Reporting
With Marabou, artist managers and labels can make better
marketing decisions with data, and see the immediate impact of their
marketing efforts. We deliver daily/weekly/monthly performance
insights with trending data from the top platforms allowing monitoring
of streaming and sales activity, across services, channels, countries, and
cities. We provide artist managers with the data infrastructure for
actionable decision making to enable transparency to all internal and
external stakeholders involved in an artist’s career.
We offer data collection, auditing, processing, and visualization
work together in order to make it easier to truly understand your data.
Marabou Analytics is a unique subscription data analysis service.
Pay one annual fee for monthly or weekly analyst reports, consumer
data, market forecasts and proprietary data models. This subscription
can also be done on a project basis. Our regular reports give you insight
into your socials, streaming data and how to respond appropriately to
what is happening now. We help music companies make sense of the
changes that digital market forces are bringing about and we help them
make profits from digital content.
Some of the analysis covered includes
❖ Audience insights: Understand an artist’s online audience by
age, gender, device & geography. Keep track of super fans and
discover how they engage with the music across DSPs.
17
❖ Playlist insights: Allowing managers to gain deeper insights into
the performance and market share of their catalog featured in
playlists by geography. We allow artists to understand how
changes in chart or playlist positions impact streams across
DSPs.
❖ Market insights. We enable labels to understand what markets
are over & under indexing and to see which songs or artists are
more profitable by audience, market and service.
Our regular reports allow clients to understand the usage of their
catalogue. We Consolidate all revenue and usage reports from Apple,
Spotify, YouTube, Soundcloud, Radio, TV and many more via hardware
partners and online tracking.
We analyze reports, visualize each individual DSP report and
group data to allow clients to drill down into release, track, artist, label
country, service, channel and format.
We also offer one unified dashboard to see all data reports.
Complete flexibility in querying and filtering reports from all sources, by
date, payments and territory allowing clients to get the full picture of
their reported earnings, daily trending, and playlist data in one platform.
We allow our clients to use permissions. They can set multi-tenant
access levels and permissions for assets, rights, distribution, analytics,
and accounting. This empowers the entire team and enables managing
who is granted access to labels, artists, releases, tracks, and payees.
18
Market Intelligence and Consultancy
Our research service gives clients market insight, analysis,
comprehensive data and future trends for the digital
content marketplace. Our research practices include Music, Online
Video and Mobile Content. Our consulting expertise helps companies
and artists profit from digital content with winning strategies, market
assessment and identifying the right partners. We cover topics ranging
from:
1. Apple, Spotify and Google streaming models and strategies
to impact consumer spend
2. Evolution and future outlook of music products
3. East African music service landscape and analysis
4. Value and digital supply chain analysis
5. The changing environment for live, radio and
CD/Merchandise
6. Changing income models for songwriters, artists and labels.
Within consultation we help artists and management companies with
the following services.
•
Market assessment / market opportunity: This service includes
identifying the size of a market across one or more geographies
(or globally), who the key tastemakers are and help understanding
their fans. We also present a structured analysis of the
competitive African market place and how relationships manifest
across industry value chains. We use these sets of information to
help clients understand how to enter markets or new product
19
categories, to identify which partners to work with and decide
which technologies to use.
•
Market sizing / forecast: We have a series of structured and
robust market sizing methodologies that we use to define the size
of markets across multiple product categories. We assess
historical trends and map the future outlook for revenues and
users along with identifying the key market drivers and
inhibitors. In addition to the resulting datasets and analysis we
also identify the key market risk factors and growth catalysts.
•
Consumer segmentation: We use our market leading consumer
insight expertise to help clients exploring the behaviors, attitudes
and characteristics of the consumers that matter to them. We
explore factors such as the role of demographics, life stage and
technology outlook to build a robust understanding of
clients’ target consumers. We also leverage our proven consumer
methodologies to identify and design bespoke
consumer segments and designing the criteria with which to
explore and size these segments through targeted marketing or
strategic brand partnerships.
•
Product strategy audit: We use our product strategy assessment
methodology to provide a definitive health check of clients’
release strategy. This includes identifying how well each aspect of
the release will meet the company’s and artists’ business and user
needs, testing usability, as well as product marketing analysis and
assessment of the target consumers.
•
Business strategy audit: Our business strategy audit provides a
health check of a company’s overall business strategy, including
20
an assessment of how well individual business disciplines
(marketing, product, commercial etc.) are aligned with core
business objectives. We also identify new opportunity and ways in
which clients can to better position their businesses to capitalize
on new opportunities.
21
7. Evaluation Metrics and Control
In preparation for market analysis, we conducted a quantitative
survey to understand the behaviors and capabilities of our prospective
clients. This survey covered their roles in the industry, frequency of
music release, formats, data analysis tools, and their willingness to pay.
We put forth our four main product offerings, digital marketing,
distribution, analytics and consultancy to find out whether more people
would be willing to pay for our services.
The first step was to determine what roles the people we
surveyed play in the industry. We discovered that most of them were
artists (70%) and only 10% were record labels and artist managers.
Graph 1: Roles in the industry
The second part was to understand how frequently they released
music and we discovered that half of our respondents release music
approximately once every three months. 25% released music twice a
year and 16.7% released new music each month.
22
Graph 2: Frequency of Music release
The third part enabled us to understand what formats these
musicians and labels were using to release music. 66.7% release digital
downloads, 75% release songs for streaming (Spotify, Deezer) and user
generated content with YouTube and Soundcloud contributing to 83.3%
of the releases, while 25% still release physical CDs.
23
Graph 3: Format of Release
The last part of the study involved finding out how much data collection
and analysis they take part in. We found that most of the respondents
(82%) check their Facebook insights, while 63.7% check Instagram
Business Insights. Twitter Analytics was the least popular with 18.8%
while 9.09% do not use either of the above services.
Graph 4: Data analysis tools
At the end of the survey we discussed the respondent’s willingness to
pay for services we offer. 50% would pay for digital marketing, and
66.7% for distribution. However, the biggest percentage (75%) came
from respondents who felt that they would pay for market intelligence
and consultancy services. Only 25% said they would pay for data
analysis.
24
In addition to the survey, we conducted several interviews with
key stakeholders in the Ugandan music industry. We contacted record
labels, management companies and mainstream artists to understand
what was lacking for them in the music industry and try to find solutions
to the needs they expressed.
During my study, I interviewed A-pass, a Ugandan recording artist.
In our interview, he outlined some challenges that are faced in the music
industry and brainstormed several solutions. One of his main concerns
revolved around the fact that there are not many artists and this
contributes to the lack of competition in the industry. Quality of
production, marketing and promotion is reduced to the bare minimum
and innovation is limited.
The media (radio, press and digital) play to this monotony by
promoting songs and artists that they know. Any genres or movements
that they aren’t familiar with are not given any airplay except with the
use of payola. Piracy is rampant and UGC sites like YouTube enable
uploading of countless versions of the same song.
With regards to the Collective Management Organization, UPRS,
he claims they do not listen to advice or council. During the last year,
they made over 1Billion Uganda Shillings, however they spent almost
70% on administrative costs11. In addition to the high admin costs, this
society also collects licenses and revenue for unregistered artists and
catalogue which they do not legally represent. They have a corrupt
management and pay the bigger mainstream artists off in order for
them not to say anything. They also charge club DJs a license for playing
local music and this discourages them from exposing more Ugandan
11
“ARIPO 2014 CMO Survey”, Keitseng Nkah Monyatsi, Pg. 35
25
music to their audiences. He suggests they should be closed down and
new companies put in place.
Another interview I conducted was with the managing directors
and founding partners of Swangz Avenue. They are a record
label/management company working with some of the mainstream
artists in Uganda today.
One of the main challenges they highlighted was the lack of
structure. There are so few professionals at every stage of the supply
chain that systems are not in place for artists to make money off
records. There are low returns and it’s very expensive to record, develop
and promote an artist, in terms of money, time and man power. Songs
and music videos are used for exposure and the main source of income
is live performances and endorsement deals. Piracy is an essential part
of the promotional plan and enables them to push records even farther.
This is mainly due to the lack of paying culture among Ugandans, and the
limited options for money making opportunities.
One of the key takeaways from this interview was about Sauteez.
This is a music download app which the record label commissioned in
order to take direct advantage of their wide catalogue and the revenue
that people have on their mobile money accounts. The startup faced
challenges and decided to pivot towards streaming and think of new
ways to engage consumers.
They decided to start focusing on building a huge consumer base
and selling convenience and access. They plan to have a wide catalogue
with access to most songs; an industry product that is open to everyone.
Therefore, there is need for collaboration of labels, management
26
companies and catalogue owners. Due to the scattered distribution and
de-centralized methods of dispensing records, piracy is still rampant,
and the quality of music produced is diminished (innovation is
discouraged)
Sauteez plans to roll out a new product this year. This is going to
be a streaming service with content, context, editorial and algorithmic
playlists. They also plan to integrate social functions such as sharing on
Facebook, Snapchat and Twitter. This model will be based on weekly,
monthly and annual subscription fees that can really help to encourage
consumers to buy and an ad-supported free tier. There are plans to
partner with Telcos to deliver packages that would enable students and
families to get access at a discounted rate.
8. Appendix
It is worth mentioning some of the limitations faced while
gathering these findings. The amount of information and literature on
the Ugandan scene is very limited. There are reports focused on general
consumer behavior, mobile coverage, internet, and general
demographics. However, there are no research reports on music, music
consumption, music companies and the record industry. Therefore,
conducting some of the interviews with labels and industry executives
was really essential in order to get a more holistic picture of how the
industry works.
27
Key Personnel:
Below I shall outline the team members and various partners we
plan to have on board. The team is made up of music industry executives
and entrepreneurial individuals who I believe will push us forward and
enable us to be most effective as we enter the East African and Ugandan
market.
Abaasa as founder and CEO has helped launch a broad spectrum
of artists into the marketplace, both in Uganda and internationally. He
has a solid music production background and also in-depth knowledge of
the entertainment business. Having compiled and overseen numerous
successful marketing campaigns in both an artist and campaign
management capacity, he is well versed in the process of introducing
new up-and-coming brands to a wider audience. He will also be in
charge of leading and synchronizing marketing initiatives.
For the operational aspect of the business we teamed up with
Kabonero Micheal Don who is the CEO and co-founder of Dustville
Records. He will use his talent management skills in areas of artist
development, artist promotion and management including all aspects of
the music industry, to guide our artists in the development of their
careers. He brings the necessary business expertise and a vast network
of partners to the table in order to guide Marabou Digital in daily
matters of business development, accounting and related financial
functions. He has strong connections in the music industry through
relationships with key partners, influencers, blogs, promoters, radio and
dance club pluggers, tour support, design and a wide array of East
African industry executives. We feel confident that Don will provide the
28
proper guidance needed based on past results from the successful
career launches and experience he has gathered.
For the marketing and promotions department we have Kihumuro
Aggrey who works across multiple social media platforms to grow
audiences & followers and maximize engagement with our clients’ fanbases. He helps set up and manage digital campaigns whilst ensuring
advertising spends are effectively maximized to achieve campaign goals.
In addition, he compiles and analyzes reports using online data and
offline radio plugging data to optimize campaigns to achieve targets. He
is also in charge of running digital health checks before, during and at
the outset of campaigns, advising clients on how to optimize their online
channels and drive the best promotional practices.
We have partnered with several third-party businesses in order to
deliver the most appropriate services our clients need.
Africori, a music distribution company based in South Africa. Their
expertise in the African market can help us maximize the reach and
revenue our clients earn from their fans. They possess distribution
infrastructure across the African continent which makes them
perfectly placed for a partnership with Marabou in order to expand.
Music Kickup is a company based in Finland which offers a
fully featured digital distribution API to all the major digital stores.
They enable embedding and a white label offer to personalize our
distribution offering. This partnership is essential as it will enable us
to have our own fully functional digital distribution infrastructure. It
is fast and easy to set-up, and costs an annual subscription per user.
29
This is one of the main things lacking in East Africa right now and
we hope to capitalize by being the 1 st major player in the industry.
MyPlayData is a media monitoring and tracking company
based in the US, but doing business in West Africa. They possess
proprietary audio fingerprinting hardware and technology capable
to do audio tracking and provides actionable insights through
reports. This partnership will enable us to successfully track clients’
music as it is used on radio stations, TV, and major music venues.
This service would be useful to artists and management because
currently, there is no accurate feedback or data from the CMOs
about music usage, therefore licenses are skewed.
Panamusiq is an East African management company based in
Tanzania. They work on building promotional and marketing
campaigns for local artists to provide global exposure and reach.
This partnership would help us access more regional resources in
terms of promotion, radio, PR, press, tour support and digital
solutions.
Horus music is a digital distributor focused on delivering value
for upcoming artists and labels through playlisting, marketing
services and a full scale digital distribution platform with over 200
stores. They will offer us video and playlist pitching, in addition to
tailored marketing services.
Relevant legislation has been drafted. We have prepared a legal
memo outlining the key terms in our consultancy and marketing deals
with clients. We also have label services contracts and record licensing
agreements in order to handle distribution.
30
I will briefly talk about the operational budget and what fees
structures we plan on using.
Item
Units
Cost
Website Hosting
$11/month
$132
Graphic Design and Trademark
1
$200
Access to Analytics (Chartmetric)
$54/month
$648
Digital Distribution (Horus Music)
$35/release
$105
Tableau
$70/month
$840
Digital Distribution API
$10/release
$495
Software Development
1
$250
Pricing Structures:
We have several features on our service. We offer a free digital healthcheck with first consultancy free. We offer the rest of our services on a
premium subscription based model.
Music Distribution
Sell any amount of songs. 100% royalties.
Registration Fee: $15 annual fee
25% commission on sales. For larger catalogue 10-15%
Campaign Management and Consultancy
Monthly subscription of $100.
Free digital health check.
PRO Registration, metadata, barcode and ISRC - $20
Analytics and Reporting
Monthly subscription $10
Detailed weekly reports and insights.
31
MARABOU DIGITAL SERVICES
BUSINESS PLAN SUBMITTED IN COMPLETION OF GRADUATE
THESIS AND CULMINATING EXPERIENCE
ABAASA RWEMEREZA
BERKLEE COLLEGE OF MUSIC
0733404
Table of Contents
Business Plan Template ........................................................................................................ 3
1. Executive Summary ........................................................................................................... 3
2. Company Overview ........................................................................................................... 8
3. Business Environment/Customer ................................................................................. 11
4. Marketing Strategy.......................................................................................................... 14
6. Implementation Plan and Products to offer ............................................................... 15
7.Evaluation Metrics and Control ..................................................................................... 22
Appendix................................................................................................................................ 27
2
Business Plan Template
1. Executive Summary
Marabou Digital is a music consultancy firm offering campaign
management, marketing and business development strategy services to
artists, indie labels and artist managers in the East African region. We
also offer digital distribution, data analytics and media tracking services.
The music industry in Uganda and East Africa has always taken
small gradual steps towards full functioning and capacity, however, with
the limited local solutions and lack of expertise, it’s difficult for an artist
to break through the African and global market. In the digital age, with
the potential routes to the consumer multiplying by the day, the process
of introducing an artist to the wider commercial mainstream is fraught
with complexity, be it via press, radio, TV, online, streaming services or
social media. What is the best timing? How will the artist stand out from
the crowd? What can be done to secure taste-maker buy-in? How can
the artist reach the broadest number of people globally and maximize
efficiency? How can we track the use of our music?
Who would be interested in Marabou? Record labels, music
publishers, artists and songwriters, artist management companies,
brand and ad agencies, music promoters. We strive to provide music
companies, independent artists and label partners with access to the
resources, relationships and experience required to share their creative
vision with the African and global audience.
3
Marabou offers an unmatched set of local solutions and worldwide
services, including:
•
Customized label services and campaign management by release
and territory
•
Product management and execution of digital marketing
campaigns, content creation and promotion plans.
•
Data analytics, insights and reporting.
•
Rights administration and catalogue management
•
Radio promotion, publicity, and marketing services managed by
our East African network of PR, Radio and online promoters.
•
Dedicated sync licensing for ad agencies and short film production
houses.
•
Market Intelligence and Consultancy
•
Future Products: Worldwide sales, distribution, and digital
marketing including global account management for key digital
retailers, Airplay monitoring and audio tracking.
Marabou aims to set itself apart from competition by being a
boutique media and technology analysis company. What’s good for the
artist is good for the industry. We focus solely on the intersection of
music content and technology, working with both the biggest East
African artists and early stage DIY musicians. We combine bold, forward
looking vision with practical, actionable advice.
Possible actions to be taken in response are based on building
solid local East African partnerships and a global network of
collaborators; Initial investment in order to cover administrative costs
such as website development, setting up a digital distribution API, and
4
building a localized data dashboard in order to frame a robust value
proposition;
Introduction:
The socio-economic structures of the Ugandan population play an
important role in understanding what framework the culture is going to
stand on and at the same time support. This framework is undoubtedly
affected by varied factors: average income, literacy rate, political
climate, GDP, population growth rate. Uganda being an agro-based
nation, the Government mainly focuses most of the budgets around
farming incentives and crops. Minimal focus is put on the arts, culture or
entertainment.
In order for one to understand the context of this discussion, one
must keep in mind that Uganda is a small country (241,000 km 2, about
the size of Minnesota)1 and much of the infrastructure is still in
development. The major road networks are under construction and
urban development is still on the rise. This affects exchange of goods or
services across the country by centralizing music activity around major
cities; Mukono, Jinja, Mbarara, Lira, and Kampala the capital. We have
also experienced an upturn in terms of mobile phone coverage, music
distribution through YouTube and the general attitudes towards
copyright protection.
Uganda has a population of 43.57 million2 with 18.4% living in
urban areas, 1.52 million in Kampala the capital. Between 2002 and
Website:
https://photius.com/countries/uganda/geography/uganda_geography_location_and
_size.html
2Website: http://worldpopulationreview.com/countries/uganda-population/
1
5
2014, the urban population further increased to 6.4 million3 attributed
to four factors, namely; the gazetting of new urban areas, natural
growth (that is, excess of fertility over mortality), redefinition of the
boundary of selected urban areas and rural - urban Migration. Between
2002 and 2014 the population increased from 24 million to about 35
million representing an average annual growth rate of 3.0 percent. 4
3
4
Uganda Bureau of Statistics, 2015 Statistical Abstract.
Uganda Bureau of Statistics, 2015 Statistical Abstract
6
Rise of the consumer opportunity rests on five pillars: the rise of
the middle class, exponential population growth, youth dominance,
rapid urbanization and quick adoption of digital technologies. Population
growth is on the rise. In Africa in general and estimated to rise from 1Bn
to 2Bn by 20405 In Uganda 21%-50% of population is middle class and
this rise is signified by rise in aggregate household expenditure, broadly
defined as those living within the $2-$20 daily budget.
5
Deloitte Africa Report (2014) Pg. 14
7
2. Company Overview
Mission Statement: Our service is digital marketing, rights management
and market intelligence for the East African market as we provide
worldwide digital distribution and data analytics for DIY artists, record
labels, managers and collective management societies who are
dissatisfied with the lack of data feedback and distribution. Unlike
Africori, or CCA we are based in East Africa and offer digital marketing
and consultancy.
Business Model: Our business model revolves around the customer and
their needs. We offer free distribution and rights administration for their
digital catalogue. We also have a digital marketing and analytics
premium tier which involves monitoring, tracking and reporting usage of
their catalogue in addition to market intelligence and consultancy which
allow the customer to understand how to use their data in the most
appropriate way to grow their business.
Competitive Advantages: Competitive advantage is a set of unique
features of a company and its products that are perceived by the target
market as significant or superior to the competition. We have low cost
raw materials for example we are outsourcing a number of services (like
the digital distribution and audio fingerprinting software) in order to
maximize value for the customer. We have a skilled workforce of
industry executives and music producers who understand the Ugandan
music ecosystem and understand digital marketing. This enables us to
have an advantage as we provide business and market intelligence to
help customers have more insight and understanding on how to
8
maneuver the East African music industry. We are Outdustry with a
focus on African and East African markets.
Legal Form: LLC with plans to incorporate.
Competition: Below we’ve outlined some of our competition in the
digital environment, in order to understand what they’re doing and
analyze where the opportunity might exist for us.
• Electro Mode: is a South African music company that specializes in
digital and physical distribution, manufacturing, online advertising
and graphic design. They offer detailed design packages, from
album covers to social media, and distribute physicals and digitally
to all the online stores (including African ones).
http://www.electromode.co.za/distribution.html
• Africori: is a music distribution company with offices in South
Africa and Nigeria. They offer digital distribution to over 200
download and streaming outlets in Africa and all over the world.
They also deliver to various mobile stores and telecom operators
(who have made business models around caller ring back tones)
They also do licensing for TV, ad commercials and movies through
a synch-licensing platform. Africori also does collection of
publishing and neighboring royalties from collective management
organizations all across Africa and the U.S and Europe.
http://africori.com/
• JTV digital: is a distribution company offering digital distribution,
client support and label services. They us a pay-as-you-go model
9
with no subscription fees and free UPCs and ISRCS. They also take
care of reporting and revenue collection with a monthly report.
JTV offers artist services which include cover art, youtube
monetization, Vevo & itunes channel setup, song licensing with
Loudr and Easy, digital radio plugging and radio airplay
monitoring.
https://www.jtvdigital.com/
• Content Connect Africa(CCA): is a 360 entertainment and digital
partner based in South Africa. They offer digital distribution of
audio and visual content, content marketing, blanket licensing,
royalty collection, music video plugging and collaborations with
various African stars.
http://www.contentca.co.za/
Services
Digital
Offered
Distribution
Licensing Data
Tracking
Consultancy
Analytics and
Reporting
ElectroMode Yes
No
No
No
No
Africori
Yes
Yes
Yes
No
No
JTV Digital
Yes
No
Yes
Yes
Yes
CCA
Yes
Yes
No
No
Yes
Nazwo
Yes
Yes
No
No
No
Musica
Yes
No
No
No
No
10
3. Business Environment/Customer
Market Assessment: On analysis of the market, we found out that there
are few factors to consider. We identified 3 main issues affecting the
Ugandan industry. These revolved around:
• Policing copyright infringement through take downs and finger
printing.
• Challenges with tracking and reporting digital usage and ensure
proper remuneration.
• Airplay data in order to justify public performance licenses paid
out
by
UPRS
(Uganda
Performing
Rights
Society)
and
UMA(Uganda Musician’s Association)
Uganda is a small nation in terms of physical area however
population the is over 43,979,256 people. Populations are focused
around four main cities; Kampala the capital city (with 1.3M people),
Gulu (146K), Mbarara (97K), and Jinja (93K). These are important in
understanding where the key markets are and where the business can
really get to customers who need our services.
Uganda has a very young demographic, 48.47% of the Uganda is
population being in the 0-14 age group, 21.16% of the total population is
dominated by the 15-24 age group while 28.34% of the population of
Uganda is in the 25-64 year age group.6 This allows us to make estimates
in terms of where the digital music industry can grow. 41% 7 of Ugandans
http://worldpopulationreview.com/countries/uganda-population/
http://www.dignited.com/22706/jumia-white-paper-ugandan-internet-usersmobile-penetration-plus-m-commerce-trends/
6
7
11
are internet users, meaning there is room for expansion into the other
59%. Mobile subscription is at 65% and is driven by a competitive mobile
landscape which has proved to be favorable to Ugandan consumers.
Since most of the music fans are mobile phone customers these
statistics can provide us with a solid basis on which to be optimistic
about the future of the Ugandan digital industry and in turn focus our
marketing initiatives on small to medium enterprises that are developing
and breaking artists on the landscape.
The telecommunications sub-sector posted an increase in the
number of subscribers in the year 2014. In the context of
telecommunications, any registered active line/SIM (active means the
line has registered a transaction or more within the last 90 days) is
considered a subscriber. 12.8 percent increase in telephone subscribers
from 18.3 million subscribers in 2013 to 20.6 million subscribers in 2014 8
A significant 55.9 percent increase in the total number of internet
subscribers was realized and this was due to a 12.4 percent increase in
the fixed internet subscribers and a 57.1 percent increase in the mobile
internet subscribers9
Number of Mobile Money Transactions increased by The number
of transactions increased by 28.9 percent to 49.4 million with a value of
2.3Bn Shillings.
Information and communication activities include; publishing
activities, motion picture, video and television programme production,
sound recording and music publishing activities, programming and
8
9
Uganda Bureau of Statistics, 2015 Statistical Abstract pg 66
Uganda Bureau of Statistics, 2015 Statistical Abstract Pg 66
12
broadcasting activities, telecommunications, computer programming,
consultancy and related activities. Information and communication
activities grew by 0.7 percent in FY 2014/15 compared to a growth of
12.1 percent in FY 2013/14. The slow in growth is due to increase in
intermediate consumption and competition amongst the different
players in the subsector. 10 Arts, Entertainment and recreation activities
include: creative, arts and entertainment, Libraries, archives, museums
and other cultural activities, gambling and betting, sports and
amusement and recreation. Arts, entertainment and recreation activities
grew by 0.5 percent
Our market would be record labels, DIY indie artists, Artist Managers
and booking agents who would need the service in order to make their
digital campaigns more robust. They would be able to distribute their
music globally, get actionable insights and also be able to act on the
information they receive to inform business decisions. There are also
opportunities for use by collective management societies (UPRS and
UMA) in order to handle rights management, tracking and monitoring
and to deliver feedback and analytics to their customers to ensure the
right license fees.
Some of the key labels Swangz Avenue, GoodLyfe Crew, Game Over
Yard, Leone Island Crew, Gagamel Entertainment, Big Talent, Angel
Music, Buddies Music Inc, Striker Entertainment, Badi Music, Fire Base,
The New Eagles, Team No Sleep Entertainment, Gifted Music Group,
Kwanza, Dustville Records, ROW Records, Navcorp, Elevation Records,
Hannz Production House.
10
Uganda Bureau of Statistics, 2015 Statistical Abstract Pg 75
13
4. Marketing Strategy
We have a website which clients can visit in order to provide them with
more information on what kind of services we offer. Potential clients
can also request a demo whereby we conduct a free digital health-check
and give them some insights and viewpoints to enable them to build a
strategy and further consult us on how to implement the ideas.
We also plan to do marketing activations and events during exhibitions
and conferences. This will allow us to educate more people about what
we can offer and the advantages of using our services. We’ve built a
stable network of contacts in the East African music industry and we
plan on expanding by making some of the products available for trial.
14
6. Implementation Plan and Products to offer
This is a detailed section outlining some of the key services we are
offering and how we are going to tailor them even more to suit the
needs of the client.
Content Creation and Digital Marketing
We assist artists and labels in building winning digital content
strategy with Marabou’s impactful consulting and cutting edge insight
and advice. We help East Africa’s leading artists and music companies
understand the competitive marketplace and to profit from their digital
content.
We work closely with small client teams or individuals to help
understand how you work and make decisions in your organization so
that you clearly understand our solutions and can put them into
practice.
Whether you are a best-selling artist or just starting out we’ve got
a social media package perfect for you. Your social campaign will be
delivered by a team of dedicated in-house and out-sourced experts.
From brainstorming sessions to idea implementation we’ve got it
covered when it comes to delivering fresh and exciting social content
across all your social platforms. We have two social media packages
available, our social media starter pack and the social media pro pack.
We tailor our offering based on your needs and budget.
Our core strengths:
❖
Big-picture marketing vision
❖
Creative but data-driven business strategy
15
❖
Innovative new product or service propositions built on key
insights
Rights Management and Digital Distribution
Marabou is the easiest way for East African musicians to get their
music on iTunes, Spotify, Amazon, Google Play and all the African stores.
Through our partners you can upload as much catalogue as you want,
keeping 100% of your royalties. Marabou Distribution is for solo
musicians, bands, DJs, performers and producers and Youtube creators
who record music at home or in studio. We also have services for labels
and publishers with substantial catalogue.
We offer full copyright and catalogue management, allowing you
to manage all recording and publishing copyrights, metadata and assets
This makes it easy for management to track rights across the digital
marketplace. You’ll know what copyrights are being used, licensed,
monetized, and claimed.
We offer centralized catalog management through A fully
integrated, powerful copyright platform that runs your digital business
online. This allows you to save time by managing all recording and
publishing assets in one place.
Managers and Artists can deliver consistent, streamlined and
perfect metadata, across the marketplace, easily. This will Improve
monetization and revenue collection and take the pain out of updating
copyrights on all the major online music services.
We can also offer public performance and neighboring rights registration
and collection. Artists can register with either UPRS(Uganda),
UMA(Uganda), RSAU( Rwanda) PRiSK(Kenya), KAMP(Kenya),
16
KOPIKEN(Kenya), COSOTA(Tanzania) and administer neighboring rights
and collect performance royalties for master recordings.
Data Analysis, Insights and Reporting
With Marabou, artist managers and labels can make better
marketing decisions with data, and see the immediate impact of their
marketing efforts. We deliver daily/weekly/monthly performance
insights with trending data from the top platforms allowing monitoring
of streaming and sales activity, across services, channels, countries, and
cities. We provide artist managers with the data infrastructure for
actionable decision making to enable transparency to all internal and
external stakeholders involved in an artist’s career.
We offer data collection, auditing, processing, and visualization
work together in order to make it easier to truly understand your data.
Marabou Analytics is a unique subscription data analysis service.
Pay one annual fee for monthly or weekly analyst reports, consumer
data, market forecasts and proprietary data models. This subscription
can also be done on a project basis. Our regular reports give you insight
into your socials, streaming data and how to respond appropriately to
what is happening now. We help music companies make sense of the
changes that digital market forces are bringing about and we help them
make profits from digital content.
Some of the analysis covered includes
❖ Audience insights: Understand an artist’s online audience by
age, gender, device & geography. Keep track of super fans and
discover how they engage with the music across DSPs.
17
❖ Playlist insights: Allowing managers to gain deeper insights into
the performance and market share of their catalog featured in
playlists by geography. We allow artists to understand how
changes in chart or playlist positions impact streams across
DSPs.
❖ Market insights. We enable labels to understand what markets
are over & under indexing and to see which songs or artists are
more profitable by audience, market and service.
Our regular reports allow clients to understand the usage of their
catalogue. We Consolidate all revenue and usage reports from Apple,
Spotify, YouTube, Soundcloud, Radio, TV and many more via hardware
partners and online tracking.
We analyze reports, visualize each individual DSP report and
group data to allow clients to drill down into release, track, artist, label
country, service, channel and format.
We also offer one unified dashboard to see all data reports.
Complete flexibility in querying and filtering reports from all sources, by
date, payments and territory allowing clients to get the full picture of
their reported earnings, daily trending, and playlist data in one platform.
We allow our clients to use permissions. They can set multi-tenant
access levels and permissions for assets, rights, distribution, analytics,
and accounting. This empowers the entire team and enables managing
who is granted access to labels, artists, releases, tracks, and payees.
18
Market Intelligence and Consultancy
Our research service gives clients market insight, analysis,
comprehensive data and future trends for the digital
content marketplace. Our research practices include Music, Online
Video and Mobile Content. Our consulting expertise helps companies
and artists profit from digital content with winning strategies, market
assessment and identifying the right partners. We cover topics ranging
from:
1. Apple, Spotify and Google streaming models and strategies
to impact consumer spend
2. Evolution and future outlook of music products
3. East African music service landscape and analysis
4. Value and digital supply chain analysis
5. The changing environment for live, radio and
CD/Merchandise
6. Changing income models for songwriters, artists and labels.
Within consultation we help artists and management companies with
the following services.
•
Market assessment / market opportunity: This service includes
identifying the size of a market across one or more geographies
(or globally), who the key tastemakers are and help understanding
their fans. We also present a structured analysis of the
competitive African market place and how relationships manifest
across industry value chains. We use these sets of information to
help clients understand how to enter markets or new product
19
categories, to identify which partners to work with and decide
which technologies to use.
•
Market sizing / forecast: We have a series of structured and
robust market sizing methodologies that we use to define the size
of markets across multiple product categories. We assess
historical trends and map the future outlook for revenues and
users along with identifying the key market drivers and
inhibitors. In addition to the resulting datasets and analysis we
also identify the key market risk factors and growth catalysts.
•
Consumer segmentation: We use our market leading consumer
insight expertise to help clients exploring the behaviors, attitudes
and characteristics of the consumers that matter to them. We
explore factors such as the role of demographics, life stage and
technology outlook to build a robust understanding of
clients’ target consumers. We also leverage our proven consumer
methodologies to identify and design bespoke
consumer segments and designing the criteria with which to
explore and size these segments through targeted marketing or
strategic brand partnerships.
•
Product strategy audit: We use our product strategy assessment
methodology to provide a definitive health check of clients’
release strategy. This includes identifying how well each aspect of
the release will meet the company’s and artists’ business and user
needs, testing usability, as well as product marketing analysis and
assessment of the target consumers.
•
Business strategy audit: Our business strategy audit provides a
health check of a company’s overall business strategy, including
20
an assessment of how well individual business disciplines
(marketing, product, commercial etc.) are aligned with core
business objectives. We also identify new opportunity and ways in
which clients can to better position their businesses to capitalize
on new opportunities.
21
7. Evaluation Metrics and Control
In preparation for market analysis, we conducted a quantitative
survey to understand the behaviors and capabilities of our prospective
clients. This survey covered their roles in the industry, frequency of
music release, formats, data analysis tools, and their willingness to pay.
We put forth our four main product offerings, digital marketing,
distribution, analytics and consultancy to find out whether more people
would be willing to pay for our services.
The first step was to determine what roles the people we
surveyed play in the industry. We discovered that most of them were
artists (70%) and only 10% were record labels and artist managers.
Graph 1: Roles in the industry
The second part was to understand how frequently they released
music and we discovered that half of our respondents release music
approximately once every three months. 25% released music twice a
year and 16.7% released new music each month.
22
Graph 2: Frequency of Music release
The third part enabled us to understand what formats these
musicians and labels were using to release music. 66.7% release digital
downloads, 75% release songs for streaming (Spotify, Deezer) and user
generated content with YouTube and Soundcloud contributing to 83.3%
of the releases, while 25% still release physical CDs.
23
Graph 3: Format of Release
The last part of the study involved finding out how much data collection
and analysis they take part in. We found that most of the respondents
(82%) check their Facebook insights, while 63.7% check Instagram
Business Insights. Twitter Analytics was the least popular with 18.8%
while 9.09% do not use either of the above services.
Graph 4: Data analysis tools
At the end of the survey we discussed the respondent’s willingness to
pay for services we offer. 50% would pay for digital marketing, and
66.7% for distribution. However, the biggest percentage (75%) came
from respondents who felt that they would pay for market intelligence
and consultancy services. Only 25% said they would pay for data
analysis.
24
In addition to the survey, we conducted several interviews with
key stakeholders in the Ugandan music industry. We contacted record
labels, management companies and mainstream artists to understand
what was lacking for them in the music industry and try to find solutions
to the needs they expressed.
During my study, I interviewed A-pass, a Ugandan recording artist.
In our interview, he outlined some challenges that are faced in the music
industry and brainstormed several solutions. One of his main concerns
revolved around the fact that there are not many artists and this
contributes to the lack of competition in the industry. Quality of
production, marketing and promotion is reduced to the bare minimum
and innovation is limited.
The media (radio, press and digital) play to this monotony by
promoting songs and artists that they know. Any genres or movements
that they aren’t familiar with are not given any airplay except with the
use of payola. Piracy is rampant and UGC sites like YouTube enable
uploading of countless versions of the same song.
With regards to the Collective Management Organization, UPRS,
he claims they do not listen to advice or council. During the last year,
they made over 1Billion Uganda Shillings, however they spent almost
70% on administrative costs11. In addition to the high admin costs, this
society also collects licenses and revenue for unregistered artists and
catalogue which they do not legally represent. They have a corrupt
management and pay the bigger mainstream artists off in order for
them not to say anything. They also charge club DJs a license for playing
local music and this discourages them from exposing more Ugandan
11
“ARIPO 2014 CMO Survey”, Keitseng Nkah Monyatsi, Pg. 35
25
music to their audiences. He suggests they should be closed down and
new companies put in place.
Another interview I conducted was with the managing directors
and founding partners of Swangz Avenue. They are a record
label/management company working with some of the mainstream
artists in Uganda today.
One of the main challenges they highlighted was the lack of
structure. There are so few professionals at every stage of the supply
chain that systems are not in place for artists to make money off
records. There are low returns and it’s very expensive to record, develop
and promote an artist, in terms of money, time and man power. Songs
and music videos are used for exposure and the main source of income
is live performances and endorsement deals. Piracy is an essential part
of the promotional plan and enables them to push records even farther.
This is mainly due to the lack of paying culture among Ugandans, and the
limited options for money making opportunities.
One of the key takeaways from this interview was about Sauteez.
This is a music download app which the record label commissioned in
order to take direct advantage of their wide catalogue and the revenue
that people have on their mobile money accounts. The startup faced
challenges and decided to pivot towards streaming and think of new
ways to engage consumers.
They decided to start focusing on building a huge consumer base
and selling convenience and access. They plan to have a wide catalogue
with access to most songs; an industry product that is open to everyone.
Therefore, there is need for collaboration of labels, management
26
companies and catalogue owners. Due to the scattered distribution and
de-centralized methods of dispensing records, piracy is still rampant,
and the quality of music produced is diminished (innovation is
discouraged)
Sauteez plans to roll out a new product this year. This is going to
be a streaming service with content, context, editorial and algorithmic
playlists. They also plan to integrate social functions such as sharing on
Facebook, Snapchat and Twitter. This model will be based on weekly,
monthly and annual subscription fees that can really help to encourage
consumers to buy and an ad-supported free tier. There are plans to
partner with Telcos to deliver packages that would enable students and
families to get access at a discounted rate.
8. Appendix
It is worth mentioning some of the limitations faced while
gathering these findings. The amount of information and literature on
the Ugandan scene is very limited. There are reports focused on general
consumer behavior, mobile coverage, internet, and general
demographics. However, there are no research reports on music, music
consumption, music companies and the record industry. Therefore,
conducting some of the interviews with labels and industry executives
was really essential in order to get a more holistic picture of how the
industry works.
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Key Personnel:
Below I shall outline the team members and various partners we
plan to have on board. The team is made up of music industry executives
and entrepreneurial individuals who I believe will push us forward and
enable us to be most effective as we enter the East African and Ugandan
market.
Abaasa as founder and CEO has helped launch a broad spectrum
of artists into the marketplace, both in Uganda and internationally. He
has a solid music production background and also in-depth knowledge of
the entertainment business. Having compiled and overseen numerous
successful marketing campaigns in both an artist and campaign
management capacity, he is well versed in the process of introducing
new up-and-coming brands to a wider audience. He will also be in
charge of leading and synchronizing marketing initiatives.
For the operational aspect of the business we teamed up with
Kabonero Micheal Don who is the CEO and co-founder of Dustville
Records. He will use his talent management skills in areas of artist
development, artist promotion and management including all aspects of
the music industry, to guide our artists in the development of their
careers. He brings the necessary business expertise and a vast network
of partners to the table in order to guide Marabou Digital in daily
matters of business development, accounting and related financial
functions. He has strong connections in the music industry through
relationships with key partners, influencers, blogs, promoters, radio and
dance club pluggers, tour support, design and a wide array of East
African industry executives. We feel confident that Don will provide the
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proper guidance needed based on past results from the successful
career launches and experience he has gathered.
For the marketing and promotions department we have Kihumuro
Aggrey who works across multiple social media platforms to grow
audiences & followers and maximize engagement with our clients’ fanbases. He helps set up and manage digital campaigns whilst ensuring
advertising spends are effectively maximized to achieve campaign goals.
In addition, he compiles and analyzes reports using online data and
offline radio plugging data to optimize campaigns to achieve targets. He
is also in charge of running digital health checks before, during and at
the outset of campaigns, advising clients on how to optimize their online
channels and drive the best promotional practices.
We have partnered with several third-party businesses in order to
deliver the most appropriate services our clients need.
Africori, a music distribution company based in South Africa. Their
expertise in the African market can help us maximize the reach and
revenue our clients earn from their fans. They possess distribution
infrastructure across the African continent which makes them
perfectly placed for a partnership with Marabou in order to expand.
Music Kickup is a company based in Finland which offers a
fully featured digital distribution API to all the major digital stores.
They enable embedding and a white label offer to personalize our
distribution offering. This partnership is essential as it will enable us
to have our own fully functional digital distribution infrastructure. It
is fast and easy to set-up, and costs an annual subscription per user.
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This is one of the main things lacking in East Africa right now and
we hope to capitalize by being the 1 st major player in the industry.
MyPlayData is a media monitoring and tracking company
based in the US, but doing business in West Africa. They possess
proprietary audio fingerprinting hardware and technology capable
to do audio tracking and provides actionable insights through
reports. This partnership will enable us to successfully track clients’
music as it is used on radio stations, TV, and major music venues.
This service would be useful to artists and management because
currently, there is no accurate feedback or data from the CMOs
about music usage, therefore licenses are skewed.
Panamusiq is an East African management company based in
Tanzania. They work on building promotional and marketing
campaigns for local artists to provide global exposure and reach.
This partnership would help us access more regional resources in
terms of promotion, radio, PR, press, tour support and digital
solutions.
Horus music is a digital distributor focused on delivering value
for upcoming artists and labels through playlisting, marketing
services and a full scale digital distribution platform with over 200
stores. They will offer us video and playlist pitching, in addition to
tailored marketing services.
Relevant legislation has been drafted. We have prepared a legal
memo outlining the key terms in our consultancy and marketing deals
with clients. We also have label services contracts and record licensing
agreements in order to handle distribution.
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I will briefly talk about the operational budget and what fees
structures we plan on using.
Item
Units
Cost
Website Hosting
$11/month
$132
Graphic Design and Trademark
1
$200
Access to Analytics (Chartmetric)
$54/month
$648
Digital Distribution (Horus Music)
$35/release
$105
Tableau
$70/month
$840
Digital Distribution API
$10/release
$495
Software Development
1
$250
Pricing Structures:
We have several features on our service. We offer a free digital healthcheck with first consultancy free. We offer the rest of our services on a
premium subscription based model.
Music Distribution
Sell any amount of songs. 100% royalties.
Registration Fee: $15 annual fee
25% commission on sales. For larger catalogue 10-15%
Campaign Management and Consultancy
Monthly subscription of $100.
Free digital health check.
PRO Registration, metadata, barcode and ISRC - $20
Analytics and Reporting
Monthly subscription $10
Detailed weekly reports and insights.
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Media of
