Simfy Africa, the local version of a European music streaming service, was launched last month. Some see services like Simfy as a godsend for local labels and musicians, but industry players argue they’re not yet a genuine alternative revenue stream to album sales.
Sony Music SA commercial director Russell Crawford says the long-term success of any such service depends on creating a sufficiently large subscriber base.
Simfy costs R60/month — or less if multiple months are paid for upfront. These subscriptions are pooled, with Simfy keeping a portion and the rest going to artists and publishers on a pay/play model.
Artists whose tracks get played more often get a larger slice of the pie, and the greater the number of subscribers the larger the pie.
“The key component is getting users online. Long-term success depends on user numbers,” says Crawford. “The real challenge is educating people about streaming services and making it clear that they are legitimate.”
Despite the yawning digital divide between the connected and unconnected in SA, he believes Simfy is sustainable. “It will coexist with other streams for some years to come, though. There’s still a strong physical market in this country.”
He adds that although one should never justify the theft of music through piracy, it’s “very difficult” to make a case against piracy if there are no legitimate online music services. “Most people don’t want to pirate music. If you make a service available and it’s compelling and the price is right there’s no reason it won’t work.”
Linda Thompson, manager of local rock band The Sick-Leaves and former head of independent label One Minute Trolley Dash, says services like Simfy are primarily additional tools for exposure to help drive fans to shows.
“Streaming is not an alternative to album sales, not yet at least,” Thompson says. “It’s just another portal for people to hear the music and share it.”
Payments from these services are low; they’re not even the equivalent of iTunes, she adds. “It’s more about a presence on the site and the hope that new people will discover your music through it.”
Thompson says another challenge, given that Simfy has 18m tracks available, is getting users to listen to a particular band’s music. Large bands and labels are able to promote their titles on Simfy’s genre and new releases pages, while independents can’t justify the costs.
Simfy chief operating officer Gillian Ezra says the company is “delighted” the SA music industry has been willing to engage. She also says Simfy is happy with consumer uptake of subscriptions. “We’re focused on trying to get people to try the service, and we’re really pleased that the local industry has agreed to our two-week trial period.”
Ezra won’t reveal sign-up numbers or the terms of the contracts with labels, but confirms that the more an artist is played by subscribers, the more they earn. “The service also tracks offline plays so artists get paid for those, too.”
Ezra says a minimum of 60% of users’ subscription fees is paid to content owners, whether that’s labels, publishers or the artists themselves. “The pool of subscriptions is distributed among labels according to number of plays,” she says. “Subscription services are all about scale — the more subscribers there are, the more earning potential there is.”
With Simfy only a month old, it appears labels and artists are going to have to be patient. “The labels know new services take time to get on their feet,” says Ezra. — (c) 2012 NewsCentral Media
