Caller Tunes: Glo, MTN Pay Musicians N9bn Royalties

The two biggest mobile telecommunication operators in the country, MTN Nigeria and Globacom, generated over N9bn for the local music industry in 2014 through the monetisation of caller tunes.

While MTN generated over N5bn for the Nigerian musical artistes who sell their contents as caller tunes on its platform, Globacom is said to have brought in about N4bn.

The money generated for the industry was in form of royalties paid to music artistes who served or are still serving as brand ambassadors to the two telecoms companies in the year.

The Glo music ambassadors, whose contracts were recently renewed, are Nigeria’s leading music stars, Peter and Paul Okoye (PSquare), Oladapo Oyebanjo (D’Banj), Chinedu Okoli (Flavour), Jude Abaga (M. I.), Oluwatobi Ojosipe (Wande Coal), Omawumi Megbele, Bez Idakula, Burna Ogulu (Burna Boy), Ego Ogbaro and Sammie Okposo.

Globacom also signed on hip hop sensation, Ayodeji Balogun, popularly known as Wizkid, after he terminated his contract with MTN. It also signed on the Mavin crew of Koredo Bello, Reekado Banks and Hadizah Blell (Di’ja).

However, the leader of the Mavin Group, Michael Ajereh (Don Jazzy) leads other music artistes on the MTN network. He is joined by Tiwa Savage, Sidney Esiri (Dr. Sid), Olanrewaju Fasasi (Sound Sultan), Iyanya Mbuk, Chidinma Ekile, Bankole Williams (Banky W), Kingsley Okonkwo (KCee) and David Adeleke (Davido).

MTN also recently signed on the visually impaired music artiste and producer, Cobhams Asuquo.

Our correspondent obtained the figures from the telecommunications companies on Wednesday, amid plans to announce an on-demand music service.

An employee in the Corporate Affairs Division of Globacom, who pleaded anonymity, said that apart from paying “about N4bn in form of royalties to Glo music ambassadors, Glo plans to lead the music streaming business in the future, which valuation is estimated to be about $8.5bn (N1.7tn).”

He said Globacom’s interest in the music streaming business might be due to the decline in digital download business, adding, “The streaming business is projected to grow at almost 40 per cent annually and will probably be over $2bn (N393bn) business in 2016.”

It was gathered that the new and rising stream of revenue for the telecoms firms might have accounted for the recent scramble for top music artistes in the country by both Globacom and MTN.

While MTN declined to renew the contracts of some of its music brand ambassadors last month, Globacom quickly poached them with higher bids.

However, aside the over N5bn generated for the music industry, MTN said the brand ambassadorship, appearances and performances fees made for the artistes amounted to over N500m.

“MTN has invested more than N1bn in talent discovery and development through the Project Fame sponsorship platform,” the company’s General Manager, Corporate Affairs, Miss Funmi Onajide, said.

“The recent rebasing of the country’s Gross Domestic Product puts the contributions of the entertainment/music sector at $7bn (N1.4tn) of the total value of $510bn (N100.4tn). This represents 3.7 per cent contributions to the total GDP growth,” she added.

According to her, MTN’s leadership contribution in the sector has impacted positively on the lives of Nigerian creative talents.

Onajide stated that beyond music, “MTN has also made significant investments, partnerships and contributions to helping to address distribution and monetisation challenges of other creative talents.”

The Managing Director, Universal Music, Sweden, Per Sundin, had in December 2013 urged telecoms firms in Nigeria to take to streaming the contents of their music ambassadors “rather than just serving as ring tones.”

“I am 100 per cent sure that this is the future. Streaming services will be the next step for global music consumption,” he had said.

Punch report.