The largest music streaming service in Africa raised $20 million

A DJ at work. Net photo.

Boomplay,the music streaming company that has expanded rapidly since it was first launched in 2015, has received a major shot in the arm as it doubles down on dominating on the continent.

The streaming service has raised $20 million in a Series A round led by Maison Capital with participation from Seas Capital.

The company says the funding will be aimed at backing its expansion plans with “a focus on content acquisition, product optimisation [and] recruitment.”

Boomplay is owned by Transsion Holdings, the China-based top phone maker in Africa, and NetEase, a Chinese internet company that has already built a music streaming service in China boasting 400 million users.

It runs a “freemium” model which allows user access an ad-supported version of the service for free as well as a paid ad-free, premium version priced at between $2 and $4 monthly.

Much of Boomplay’s growth is driven by coming pre-installed on Transsion smartphones – the bestselling on the continent – and is also available via downloads other smartphones.

The strategy has seen reach 44 million “active” users. (Boomplay defines an active user as anyone who logs into the app more than once after first downloading or opening an account.)

News of Boomplay’s funding round comes after it recently agreed licensing deals with Universal Music and Warner Music, expanding its catalog to allow users access a vast library of music from international stars – and nullifying the advantage held by global streaming services including Spotify, Apple Music and Tidal.

Boomplay is expecting to have to compete with these global services in the long term, says Phil Choi, the company’s head of international content acquisition.

Spotify and YouTube Music both launched services in India in the first quarter.

However, Choi insists global services coming to Africa will have to surmount major hurdles, just as Boomplay has.

“In Europe or elsewhere in the world, Spotify or Apple music can sign with Universal and they’ll have access to a lot of their artists. But in Africa, a lot of artists work on their own or with labels that have just one or two artists,” he says.

“So at the moment there isn’t a big label [structure] that represents a lot of artists so for Spotify or Apple Music to have the kind of African catalog that we have, they will need to go for a long period of time through discussing agreements with many individual artists.”

Choi inadvertently hints at Boomplay’s long-game plan as he says the quickest option for Spotify or Apple to build a vast African catalog in a short time “would be an acquisition.”

But for any future ambitions to be achieved, there is still work to be done to fix fundamentals of local markets.

The strong hold of piracy festers because consumers are unwilling to pay top dollar for music. In turn, that has seen artists struggle to make profits from actual music sales. As such, artists often work with pirates to promote their songs via cheaply priced CDs and free downloads online while relying on live show earnings and brand endorsement deals for income.

Choi admits to “the concerns of piracy” and says Boomplay is “holding conferences with music experts” aimed at educating artists and music industry players “about why we need to clamp down on piracy.”

Quartz

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