The Afrobeats boom has brought a lot of attention to Nigerian showbiz, one that has attracted investment and growth to the industry. However, this fame has constantly raised questions about the sustainability and viability of showbiz within the country. A few months ago, the Headies, widely regarded as Africa’s biggest music award show, was under fire for holding its annual award show in Atlanta, USA, for the second consecutive year. The move was a reflection of the changing dynamics of Nigeria’s show business scene. Since the boom, local show business has become dependent on brand-sponsored events and the emergence of the “Detty December” culture at year-end. Now, many artists have increased their booking fees, making it harder for local promoters and fans to afford them. Is the country not ready to support a thriving Afrobeats industry?
The case for higher fees
Nigerian artists have come a long way to get their music recognized globally. They have overcome many challenges and barriers, such as lack of funding, infrastructure, and exposure, and have worked hard to create music that is innovative, diverse, and impactful. Today, they are headlining major festivals and performing at prestigious venues all over the world. This year alone, Asake, Rema, and Ayra Starr have sold out events in major American and European cities and collaborated with international stars. They have also gained international respect, amassing millions of followers and generating substantial income from royalties, endorsements, and sponsorships. This has boosted their reputation and influence and created more avenues for cultural exchange and creative expression.
The global Afrobeats boom has also prompted healthy competition and innovation among artists. They are constantly improving their craft to stay relevant and balance their local and international appeal. Moreover, as the industry continues to boom, these artists face challenges such as higher costs and risks involved in their careers. They must invest more in production, promotion, and distribution, and deal with legal, regulatory, and security issues. They also have to manage their personal and professional lives, as well as their health and well-being, amid the demands and expectations of their fans and the industry.
What does economics say?
Supply and demand state that the price of a good or service is determined by the interaction of the quantity supplied and the quantity demanded. When demand increases while supply remains constant, the price will tend to rise. This is because sellers can charge more for their scarce goods. Conversely, when supply increases while demand remains constant, the price will tend to fall. This is because sellers must compete more for buyers.
Another principle, value-based pricing, states that the price of a good or service should be set based on the value it provides to the customer, rather than the cost of production or market competition. When sellers create more value for customers, they can capture a share of that value by charging higher prices. Value-based pricing can also increase customer satisfaction and loyalty, as customers feel that they are getting more than what they pay for. However, these principles are not definitive or conclusive, as they are based on certain assumptions and simplifications that may not always hold in reality.
The bleak reality
The economics of showbiz and organizing concerts is a complex topic that involves many factors, such as supply and demand, production costs, marketing strategies, and consumer preferences. Beyond covering costs, artists want to maximize their profits from each show, especially if they have a large fan base and high demand for their performances. Show promoters charge high ticket prices to concert-goers for similar reasons. They have to pay high fees to the musicians, as well as other expenses such as venue rental, security, advertising, and taxes. They also want to ensure they earn a profit from each show, or at least break even if the show is not very popular.
Exchange rates have also been volatile. This year alone, the naira has lost over 40% of its value against the dollar. This means that the naira has depreciated significantly against the dollar, which makes it more expensive to import and transport internationally. Moreover, this also affects the income and purchasing power of Nigerian artists and show promoters, as they may have to convert their earnings from foreign currencies to naira at unfavorable rates.
Moreover, over 60 percent of the entire population already live in multidimensional poverty. The economic crisis further shrinks their disposable income. Musical shows and concerts are categorized under disposable income. In times of economic crisis, people often forgo their wants and focus on their needs. This means many people will leave out things they deem non-essential so they may wait for a wider release which will be cheaper. For the artists, this could lead to alienating and excluding their local fans and supporters, who may opt for more affordable and accessible entertainment options. Although, like a double-edged sword, this could open more opportunities from other markets that offer more affordable and accessible entertainment options for Nigerians, such as DJs.
The debate over the pricing of Nigerian artists is not likely to end soon, as it reflects the complex and dynamic nature of the global economy in recent times. The boom of the music industry has created a lot of benefits and opportunities for Nigerian showbiz, such as employment, empowerment, and cultural exchange. The future of showbiz in Nigeria will depend on how Nigerian artists and show promoters can adapt and collaborate to meet the needs and expectations of their fans and the industry.