South African mobile phone operator MTN conquering music distribution sector
South African mobile phone operator MTN's music division has generated more than ZAR944m ($70m) in revenues in H1 2016 by conquering the music distribution sector, using "MP3, ringtones, caller ring back tones, on demand services and subscriptions." The Johannesburg-based firm has diversified its operations and counts mobile money, telematics, cloud computing, connected cars and telemedicine among its portfolio. MTN music has around 70 million customers and has 50 million downloads across its platforms.

Is there anything that MTN doesn’t do? The mobile phone company is into mobile money, telematics, cloud computing, connected cars, telemedicine. As part of its hunt for new revenue streams, MTN has been quietly conquering the digital music space. By Gugu Lourie

But there is nothing quite about MTN Music generating more than R944 million ($70 million) in revenues in the six months to end-June 2016 from distributing music digitally in Africa.

For MTN, this performance in the digital music space is nothing but part of its diversification strategy to retain customers and differentiate itself from competitors.

Asked how MTN is differentiating itself in this space, Herman Singh, MTN Group chief digital officer, told Techfinancials.co.za that MTN has built the capability to offer music to its customers in eight different formats: MP3 (full tracks), ringtones (true tones), Caller Ring Back Tones, Streaming (music on demand), radio streaming, IVR radio, music subscriptions and music videos. In addition, MTN Music offer a variety of exclusive local content.

MTN does not produce music, but earns income from music distribution through MP3, ringtones, caller ring back tones, music on demand and music subscriptions.

Africa’s biggest mobile phone operator has built a reputation in the music space and hit $70 million in revenues for the six months to-end June 2016, said Singh.

Though the man on the street might be only vaguely be familiar with MTN’s role in the music industry, it’s a company that has created a niche for itself among musicians. For more read: MTN change the face of music

In the past few years, the mobile phone firm based in the leafy suburb of Fairlands in Johannesburg has grew into Africa’s biggest digital music distributor.

Singh said MTN Music now has about 70 million customers in Africa. On average there are 50 million downloads across all our music offerings each month, added Singh.

The biggest region that downloads more music on MTN platform is the West Africa region – which consists of Nigeria, Cameroon, Cote D’Ivoire, Benin, Ghana, Liberia, Guinea-Conakry and Guinea-Bissau.

The upshot of MTN’s efforts in promoting digital music has been that the mobile phone operator is gaining market share in attracting music lovers on its platforms and its music download sales are improving.

In 2015, MTN’s scoop the exclusive rights to caller back ring tone or caller tune to Adele’s single title “Hello”

The deal was accomplished through MTN’s content aggregator, Content Connect Africa.

Adele’s song Hello remains the biggest download ever recorded for MTN Music at 24 million.

But Singh told Techfinancials.co.za that MTN Music platform users are downloading more local music as compared to international songs.

Digital technology is enabling music industry to effectively reach mass numbers of consumers across Africa, and MTN with its biggest footprint in Africa is an ideal company to distribute the music.

With more than 70 million MTN Music customers and $70 million in revenues, MTN seems to be willing to stick around and is not treating digital music as a one-night stand.