This was lightly the case from a previous story I’d published last September, but here we go…AGAIN: Kenya’s Mdundo, one of the few Africa-focused streaming platforms is having a hard time meeting its revenue projections. This has been attributed to the plummeting value of the Nigerian Naira (NGN), despite the platform seeing a 41% YoY increase in monthly active users (MAUs).

While Mdundo is headquartered in Kenya, it is listed on Denmark's stock exchange and reports its earnings in Danish kroner. In June 2023, the company forecasted a revenue range of DKK 17 - 21 million ($2.42 - $2.99 million) for the financial year ending June 30, 2024. However, it has since revised its projections downward to DKK 12 - 14 million ($1.71 - $1.99 million), citing, a 38% decline in the value of the Nigerian Naira.

Subscription and advertising revenue growth measured in DKK is impacted by a 38% decline in the [Nigerian] naira value from January to March 2024

For context, the Nigerian Naira has gone from trading at about [NGN] 760 Naira to $1 in June 2023 when Mdundo made its initial projection to about NGN 1,600 to the dollar in March 2024.

Mdundo adds:

“Despite this, revenue in Nigeria keeps growing when measured in Naira. Furthermore, the Naira’s depreciation reduces operating costs [when measured] in DKK, leading to improved EBITDA guidance for 2023/24.

With Nigeria’s sizable market and vibrant music industry, Mdundo sees long-term potential. Management closely monitors the evolving situation in Nigeria.”

Mdundo’s Key Markets

Nigeria, Kenya, Ghana, Tanzania and South Africa are Mdundo’s key markets as they account for about two-thirds of Mdundo’s MAUs last year. Mdundo reports 34.5 million MAUs as at March 2024, up from 24.5 million in the corresponding quarter of the previous year. By June 2024, Mdundo should hit its projected 35 million MAUs, with its sights set to hit 50 million MAUs by 2025.

How About Spotify and Others?

For sure, Mdundo is not the only music company instability of the Nigerian Naira is taking a toll on. In 2021, I published a comparison of Spotify subscription prices across 100 markets. At the time, an individual subscription in Nigeria, priced at NGN 900, was equivalent to $2.19. Now, in a piece I published last month, that same NGN 900 subscription would now translate to $0.57 due to devaluation of the Nigerian Naira. Spotify has yet to review its price in Nigeria nonetheless.

But Spotify can manage to shield this nightmare through its performance in North America, Latin America, Europe, unlike Mdundo, which specifically caters to the African market. Yesterday, Spotify announced Q1 2024 to be its most profitable quarter yet. However, the drawback is that this could affect the level of investment that companies like Spotify are willing to make in relative markets.

Recently, I also shared how South Africa alone is responsible for over 70% of recorded music revenue in Sub-Saharan Africa, despite commanding relatively fewer streams than Nigeria on major music consumption platforms.