Pulse Opinion: Could a Nigerian artist hit a billion dollar like Jay Z?
The journey he started about 20 years ago piqued gainfully and Hov beat Dr. Dre and his close friend, Sean ‘Diddy’ Combs to the throne. Although Jay Z has a background in business as a self-proclaimed drug dealer, he sharpened his legitimate business portfolio with ventures like Roca Wear and Roc-a-fella records which he co-founded with Damon Dash and Kareem Briggs.
Now, he has a few holdings his luxury brands like Armand de Brignac and D’Ussé, to go with a stock in Uber, real estate, art, and Roc Nation as well as his own streaming service, Tidal.
The Nigerian music and wider entertainment industry, however, is still in pre-formative disarray with important factors that make an industry function lacking. Whilst the entire nation also grapples with the problems of a hollow and nonsensical markets and economy, one can’t help but wonder if Nigerian entertainment will ever have a Jay Z equivalent.
Fundamental problems- capital markets, investment vehicles
In investment, the richer you are, the better your chances of securing a bright future if you have a great adviser who understands viable channels to help you place your money in.
As the world grows, while he might not be capable of being a seed investor in a start-up, even the average NGN100K earner can now invest in stocks, the money market, trust schemes and other opportunities in order to multiply his funds.
If the average Joe can do that, imagine what a Wizkid could do with his wealth. The problem though is; it’s not that simple…
The problem of ignorance
Besides a 401k, the average Nigerian assumes that there must be ‘big money’ before he can make a sound investment capable of yielding good returns. As a country, this showcases our limited knowledge of investment and insurance opportunities.
So when we want to invest, we do so in perishable real estate and jewelry as ‘sound investment’ because they’re ‘safer’ and more familiar options. Am I saying that capital/money markets, investment schemes and stocks are foolproof? No. I am simply stating that they are more reasonable than real estate or jewelry as ‘sound investment.’
The problem is that we probably have little to no knowledge of these intangible opportunities besides familiar channels like real estate and jewelry. It’s only recently that Nigerian capital maket operators started educating regular Nigerians with this information on how to improve their lives and personal s.
This is a shame because these operators have not only been robbing average Nigerians of a sound future, they have also been robbing the Nigerian economy of oiled bones. The reason is simple; the more the investment of average Nigerians in stocks, capital markets and investment schemes, the bigger the advantage on the Nigerian economy.
One wonders why the people who have this information only started divulging them recently. Even worse, this divulgence appears to be targeted towards the working class, not inner-city Nigerians.
On this, the average Nigerian and entertainers are mostly in the same boat
A Jay Z probably enjoys a wealth of information on these opportunities than the average Nigerian entertainer. His environment, the people he has around him and the access he has to advice has provided a conducive environment for him to flourish and become a billionaire, however, the average Nigerian entertainer does not have that luxury.
Presumably, not much separates the entertainers and average Nigerians in this ignorance to investment opportunities. While some might be grasping these opportunities, they’re likely to be the exception, not the rule.
This problem is most apparent in popular Nigerian entertainers and sportsmen of old, who spent their prime getting the big bags only to find themselves living in dire circumstances as their career wanes.
They were probably not given the right amount of information that could have helped them make better financial choices. Instead, they squandered their funds believing that they would never run out.
On the other hand, even when the Nigerian (entertainer) has this information, there is still the problem of paranoia from documented issues
Ignorance in this case is an operation of contributory negligence. However, even when a Nigerian has this information, he is paranoid because he understands the unfair realities of investing in the dire Nigerian economy.
Although investments in special vehicles like unit trust schemes almost always yield something, the Nigerian reality and a volatile economy cause paranoia to thrive in everybody. You can never be too sure – not even with treasury bills and bonds.
Besides the issue of economy as a volatile entity on its own, Nigerian Laws and regulations are terribly revisionist, uncertain and foolhardy. On its own, this economy drives foreign investors out of its belly, running and screaming back to their countries.
While the Nigerian might be at fault for not at least taking the plunge of calculated risk and see where it takes him, he worked hard to get this money playing different cities every night, sleeping in studios. It’s not entirely his fault that he doesn’t trust his country. His country mostly failed him here, not as much as him failing himself.
The fundamental problem – start-ups and stock
In 2012, Jay Z became an investor in ride-sharing service, Uber. He invested $2 million into the company. While his offer of a further $5 million was rejected, his point was made and his future settled.
In Nigeria, start-ups battle the harsh realities of establishing a competitive grounding to grab a market share. While some Nigerian start-ups are doing well with funding rounds, most of them are unlikely to turn cash-flow positive in 7-10 years.
In other cases, a lot of these businesses will even fail. It all goes back to the volatile nature of the Nigerian economy. Investors make the most money from start-ups through high-priced buy-outs.
It seems to be a distant dream to see a Nigerian start-up getting bought out by one of the corporate behemoths. They know that foreign investors are leaving the Nigerian economy – even those that own established companies are leaving.
It then becomes unfathomable that anybody will make a billion dollar bet on a Nigerian start-up that is yet to turn profitable. How then can an entertainer get money from his early share in any start-up even though his share might be swelling by the seed round as the start-up’s share capital increases.
The fundamental problem – record catalogue
Even with the dwindling record sales and uncertainty of streaming, Jay Z’s catalogue is worth $75 million.
In Nigeria, there is literally no industry. Only meagre amounts are being made directly from record sales. Artists make their big bucks from endorsements and record sales. Others are lucky enough to get some things from western features and that’s about it.
The Copyright Laws are simply inadequate to help Nigerian artists, producers and songwriters get adequately paid for their work. In an ideal society, artists and composers are paid on everything from caller tunes, to downloads, to radio plays, to licensing for events and so forth.
The structures are not in place in Nigeria and money is being lost on a yearly basis because people do not even know where to claim their dues. Even worse, Nigerian producers and songwriters, especially don’t know their rights – some even sign their rights away for pitiful returns.
Due to this problem, the Copyright Society of Nigeria (COSON) was inaugurated to help safeguard the interests of Nigerian artists, songwriters and producers, with rights to any song or album, on which they can legally claim.
However, there has been a case of both COSON being either limited and unable to adequately carry out its primary charge, or simply failing at some of the tasks it has carried out.
Though COSON documented an increase in the money they were able to get from various channels, hundreds of millions are left without claim annually.
While it makes sense for Nigerian artists to secure their futures and own their catalogues because you never know what might happen, a Nigerian artist would probably laugh if you told him his catalogue could be worth $75 million someday.
The fundamental problem – record labels
Jay Z’s shares in Roc Nation is worth $75 million.
What most Nigerian artists have vanity record labels now, and they have to battle it out in the night fight of a terribly structured industry, but they need to start thinking think outside the box as should we all.
It is laughable to think there’s any money in this part of the Nigerian industry.
The fundamental problem – Merchandise
One of the first ways Jay Z made money was through Roca Wear. Ladies and gentlemen, Wizkid’s Starboy merchandise potential was ruined by a formidable knock-off market that fed off his viral fan base.
But then, Wizkid was slightly negligible with the merchandise. To the average Nigerian, it was luxurious. Even without the knock-offs, the line would probably still have failed.
The Nigerian who will truly make money off apparels and clothing is the one who makes it affordable to most people.
Will we ever see a Nigerian entertainer hit dollar billion?
While the world has become a playing field for the Nigerian artist to whom limitation is slowly becoming a myth, his country remains his best option to garner wealth through investment. He has the opportunity to invest his money wisely in western markets, but the untapped potential in his country makes it a viable and attractive investment option.
The only problem is the aforementioned volatile nature of the country’s economy. Some Nigerian acts might yet be doing it, but the problems they grapple with are well-documented.
If the Nigerian artist continues to rely on his country for investment opportunity either for recognition of potential or for sentiment, we will probably never see a version of Jay Z. The best option the Nigerian artist has of hitting this elusive stride is by focusing on western opportunities.
However, you can never be too sure. All it takes is one shot; one opportunity. Dr. Dre, Rihanna and Kylie Jenner only required one venture to either hit a billion or veer close to it.
The Nigerian artist equally only needs one opportunity.