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Digital Media

AAM: First, I want to quickly thank you for taking the time to consider these questions. I believe there is a great story here. There have been scores of articles written on this topic over the past couple months. We’ll begin with a brief summary of the facts we already know about Spinlet. But then hopefully go a little deeper, I have the following questions:

First I have a personal question directed at you. I read that gender empowerment is an issue close to your heart. What are your thoughts on the effects emerging media and mobile accessibility could have on gender issues in developing nations? In my opinion the accessibility of technology as leveled the playing field in some regards. I’m curious as to what you think.

Nkiru Balonwu: Gender empowerment is indeed close to my heart, as an African woman. Historically, and not just in Africa, women have had fewer opportunities than men and have only recently increased in self reliance. I think emerging media and mobile accessibility have democratized (or leveled the playing field) in many aspects of African living. Previously inaccessible content/information has become available as a result of tech advancements opening up a wide array of resources and increasing opportunities in many areas including education, business and healthcare.

Questions on Spinlet

AAM: What are the potential roadblocks for Spinlet? More specifically what makes your model different than the existing mobile music services (i.e Spotify, iTunes, Rhapsody, Beats Music) and, furthermore, tell us about the predicted demand for your project in Africa.

Nkiru Balonwu: The streaming and downloads business, as it mostly operates today, is structured for societies with reliable and affordable mobile internet, rigorous intellectual property prosecution and enforcement, seamless online payment systems and being accustomed to spending considerable sums of money on building a music library. With mobile Internet and payments still in their infancy, streaming and buying music in Africa is not quite the same experience as in Europe or the US. We think however that with a strong focus on African content, we have ready markets in Africa and Africans in the diaspora, and we also see increasing demand from non-English speaking countries like Mozambique and Angola.

AAM:  You said in an interview with Forbes that “We found there was about 85% of music landscape (in Africa) was undiscovered.” is this a core concept for your business model in Africa? Do you plan to monetize this undiscovered talent? Can you tell us some more about how you’ll integrate that staggering statistic into your platform.

Nkiru Balonwu: Well, it certainly is a huge part of our strategy going forward. We think that increasing the quantity of indigenous music that is available will drive subscription numbers up, particularly when you consider that a lot of this music is old, nostalgic music that is yet to be digitized and simply isn’t widely available anymore. We certainly plan to monetize as much of the content as we can, not just for ourselves but also for the benefit of artists who haven’t earned royalties since music stopped being widely distributed on vinyl and 8-track tape in Africa.

The key to integrating the music on our platform is assisting with remastering and conversions to digital formats, and possibly producing such collaborations as we did in 2013 with the hugely successful “Baby Mi Da” by veteran musician Dr Victor Olaiya, featuring modern day sensation 2Face Idibia. We think this is a model that will prove as successful across other African countries as it has in Nigeria.

AAM:  The service you’re providing sounds quite like Rhapsody (est. 2001), a company which has it’s ups and downs. Is your team in communication with their leadership, or the leadership of any other established music streaming services?

Nkiru Balonwu: The music streaming industry is part of a fairly small ecosystem, so we’re well aware of the different challenges each unique model is facing and how some services are trying to innovate away from pitfalls previously experienced by others.

AAM: I’ve read that Spinlet wants to move beyond just being a music platform, but also supply news and other media. Would there be any possibility for partnership with Africa Agribusiness Magazine to help supply media content for the new dynamic Spinlet app?

Nkiru Balonwu: We’re looking at delivering a more rounded entertainment package – a one stop shop, if you like, for music and related media. This is still in its development phase but yes, we would be looking to partner with publications such as yours in achieving this target.

Mobile Banking

AAM: There is no denying that mobile banking is on the the rise in Africa, however, “On Device Research” found that “25 per cent of users say they do not make mobile payments because of slow network speeds” and “those with 4G connections only 64 per cent have made a mobile payment,” (Human IPO) What are your thoughts on this?

Nkiru Balonwu: Not being in the mobile banking industry per se, my perspective is the layman’s, but I would say that apart slow networks and other issues of poor infrastructure, there’s also a lack of trust in the system coupled with a perceived inability to fix problems quickly. For example, where a mobile payment is declined and yet the payer is still debited, the fact that reversing such a transaction is often a cumbersome and lengthy process does not help in building trust in the system.

AAM: Do you think mobile infrastructure is expanding at a sufficient rate to support you current venture’s goals?

Nkiru Balonwu: The rate of expansion could be quicker but we can’t really complain. We also expect that as more African countries establish more stable and regular supplies of electricity and, consequently, telcos spend less on backup power and have more to invest on infrastructure, things will improve.

AAM:  In your opinion what are some of the pros and cons of mobile banking as opposed to the conventional “western style” of commerce?

Nkiru Balonwu: The biggest pro, as seen in the success story that is Mpesa, is that people in the urban centres can send money safely to friends and relatives in the rural areas. In the wide support structure that African culture promotes, this is a welcome development. Another is the way in which it brings “informal” money into the formal economy, seeing as a significant segment of the African population is unbanked or without access to financial services. To my mind, the pros far outweigh any cons. Mobile banking is increasingly safer, more convenient, faster and more accessible for many, a win-win situation all round.

AAM:  Is mobile banking safer, more secure and faster than conventional payment methods?

Nkiru Balonwu: I wouldn’t say that mobile banking is safer or more secure but I would think  that it is significantly faster yet offering a good standard of safety and security.

AAM:  Do you think there is a role for mobile banking outside of the developing word, say in the US or EU?

Nkiru Balonwu: Yes, I definitely think there’s a role for mobile banking in developed economies. Don’t forget there are a not insignificant number of people living in similar situations as the unbanked or informal economies found in the developing world. But also interestingly, mobile banking in the west is relevant for a different reason, more advanced customer service i.e. deeper customer relationships and superior customer experience. In the end, whether developing or developed, mobile banking can play a pivotal role in increased customer satisfaction. It is also particularly attractive to the younger more tech-savvy generation. And, really what easier way is there to check your balance or pay a bill.

AAM: Is it possible that once a safe banking infrastructure is in place will this mobile banking revolution could be a fad that fades away?

Nkiru Balonwu: I doubt it. It seems to me that the more convenient and efficient mobile banking becomes, the more likely that it would become less a fad and more the norm.

Additional Questions

AAM: Topics I would like to discuss could include Spinlet’s plans for rapid expansion in Africa during 2014-15.

Nkiru Balonwu: Content acquisition drive, diversification  of product offering and product interface, working with artists to promote their on-platform music more.

AAM: Additionally, I would like to talk about the role of digital media in emerging markets.

Nkiru Balonwu: Digital media is extremely relevant in emerging markets and the developing world primarily because it solved the distribution problem. Until recently, viewing 24-hour news, drama series, movies etc required expensive, and often unreliable, satellite TV equipment and high subscription costs. Original music also required expensive physical medium for mass delivery. For books and magazines, it was paper or you were out of luck. These constraints essentially placed a very low upper bound on the size of the entertainment market. Digital media eliminated these limitations and enabled the concept of content streaming. While distribution was a major headache for large scale content providers, the smaller players and individual consumers faced a crisis of access. Prior to the introduction of digital media it was nearly impossible to put out material without incurring prohibitive costs. The requirements for advertising, placement, and promotion meant that this sort of activity was entirely in the domain of large providers. Digital media has also enabled the on-demand paradigm which has been a revolution in its own right. The notion that a consumer can only access content at a time predetermined strictly by the provider is counterproductive from a business standpoint and unnatural from a philosophical point of view. Finally, digital media has greatly simplified content consumption by eliminating the assortment of incompatible standards that proliferated during the analog era. For example, there were more than a dozen standards for delivering color information in television broadcast such as NTSC 3.58 (US), PAL B/G (Australia, NZ), PAL I (UK), SECAM (France) etc. These standards all required dedicated equipment and very often meant that even when content was physically available it was still inaccessible. Digital media essentially unified the content space freeing the consumer from the tedious chore of managing hardware compatibility requirements. All these fall within the mission and business profile of Spinlet which is to provide an on-demand content stream.

AAM: I would like to like to show how the use of mobile technology in the developing world differs from that in the western world.

Nkiru Balonwu: The use of mobile technology does not particularly differ geographically presently and that is because there has been significant success in creating a universal user experience for commercial products. Perhaps the only place that a marked difference exists is why the technology is relevant. In the western world it has become dominant mainly owing to convenience and portability – compared to the developing world where existing communication infrastructure was, at best, poor. However, the unifying theme in the mobile technologies today is on-demand presence and user behavior is shaped around that irrespective of geographical location. In any case, the world is becoming more of a global marketplace so consumers are being targeted with, broadly speaking, the same products and solutions.

AAM: Finally, I would like to know his opinions on “Africa as a 99 percent pre-paid economy,” I am veryfascinated about how this effects the economic climate in these regions.

Nkiru Balonwu: Prepaid was probably the best option to break digital services into the continent because of the following reasons:

· No credit histories (but this is gradually changing)

· Very few national identification schemes

· Poor address mapping

· Slow, laborious judicial process (for enforcing contracts)

These factors affect not only services but such things as rent (payable in advance, sometimes 2-3 years), acquisition of assets (e.g. Electricity generators, vehicles, etc., all payable in advance).

And even where credit is presently available, the payment spread is much shorter, with bigger deposits required.