Why Mdundo is targeting more Telco partnership across Africa
Mdundo, a music streaming service focused on Africa, is looking to expand its agreements with telecom service providers across the continent to boost its earnings and subscriber base.
This expansion is due to collaborations with MTN and Airtel in Nigeria and Vodacom in Tanzania, which doubled its user base by adding a paying subscribing option as an income stream last year.
MTN and Airtel Nigeria have a combined user base of 124.5 million. In contrast, Vodacom Tanzania has 15.6 million, giving the music streaming service access to a target audience of further over 140 million people in the two African countries.
Martin Nielsen, the CEO of Mdundo, said, “This is a new revenue stream for us. When we listed the company in September 2020, we predicted that revenue from this revenue stream will account for 40% of revenue within a few years, and this is still our forecast.”
Mdundo subscribers gain access to music via USSD services as part of a packaged deal (daily, weekly or monthly). Mdundo could also access the streaming service through the company’s website or app, which has over a million downloads.
Mdundo had over 1.7 million international songs on its platform as of December 2021, featuring 367,000 tracks uploaded by 122,000 African artists, indicating a 46 percent increase from December 2020. The company pays out more than half of its profits to its creators.
Mdundo was founded in 2013 and listed in the Nasdaq First North Growth Market in September 2020 to accelerate its growth across Africa. It has grown from a user base of less than one million in 2016 to 13.8 million by the close of 2021. It targets a user base of over 18 million by the middle of this year.
Paying subscribers accounted for 14% of Mdundo’s earnings in 2021, Nielsen said, as advertising revenue, from its free streaming service grew by 63% after setting up sales teams in Nigeria and Tanzania to rapidly expand its commercial operations beyond Kenya.
“We’re rapidly growing our commercial operation outside our home market, Kenya. This expansion allows us to be closer to advertising clients across the continent and, thereby, create awareness and educate around our unique advertising formats and reach,” he said.
The company is also doubling down its commercial focus to Ghana and Uganda. It expects more significant revenue growth this year following a new advertisement deal that quadrupled its monthly revenue from displayed advertisements to 34,581.
Its revenue is also increasing, tripling to $382,900 in the second half of 2021 from the same period the previous year. Its next full financial year anticipates a 400 percent increase in income.
“The revenue growth is a result of scaling our sales operation to new markets,” said Nielsen.
Over 20 music streaming services are available in Africa, including Sweden’s Spotify, available in 44 countries after expanding to an additional 38 last year. Other popular streaming services include Nigeria’s Boomplay and Kenya’s Safaricom’s Songa.
On the other hand, Nielsen is unconcerned about new market entrants, stating that the prevalence of music piracy in Africa concerns him more than anything else. Accordingly, it teamed up with anti-piracy experts Audiolock in 2020 to take down unauthorized connections to African music from unlawful websites.
“We still see the biggest competition to our service as illegal consumption of music across the continent. This illegal streaming service is still where the vast majority of people across Africa get their music from, unfortunately, and we aim to provide a great alternative to this.” He added.