The Impact of Nigeria’s Economy on Music Streaming Revenue: Insights from Sarz

 

​The global explosion of Afrobeats has placed Nigerian artists on the world's biggest stages, yet a glaring disparity remains in how these artists are compensated at home compared to their international counterparts. In a recent episode of the Afropolitan podcast, legendary Nigerian music producer Osabuohien Osaretin, popularly known as Sarz, shed light on a sobering reality: the struggling Nigerian economy is directly stifling music streaming revenues. While the talent is world-class, the financial returns from domestic streams are a fraction of what is earned in the West, creating a significant hurdle for independent artists and labels operating within the country.

​The Massive Revenue Gap: Nigeria vs. The West

​According to Sarz, the math behind music streaming is heavily skewed by regional economics. He revealed that while a million streams on Spotify in the United States can generate between $3,000 and $5,000, the same million streams coming from Nigeria often yield a meager $300 to $500. This ten-fold difference highlights a "value gap" that makes it increasingly difficult for local creators to break even, let alone turn a profit.

​The core of the issue lies in the subscription models used by streaming giants like Spotify, Apple Music, and YouTube Music. In stronger economies, users pay premium subscription fees (often $10–$15 per month), which dictates a higher "per-stream" payout. In Nigeria, to remain accessible to a population struggling with inflation and a high cost of living, streaming platforms offer significantly lower subscription rates. Consequently, the revenue pool distributed to artists is much smaller.

​The Marketing Paradox

​One of the most poignant points raised by Sarz is the "Marketing Paradox." To achieve a million streams in Nigeria, an artist or label must invest heavily in digital marketing, radio play, and social media influencers. Sarz noted that the cost of promoting a song in Nigeria has skyrocketed, often matching the marketing budgets seen in Western markets.

​“It will cost you the same amount to market or promote a song in Nigeria as much as it would cost you abroad,” Sarz remarked. This creates a unsustainable business environment where the "Cost Per Acquisition" (CPA) of a listener often exceeds the "Lifetime Value" (LTV) of that listener's streams. For many upcoming Nigerian artists, this means that even a "hit" song can result in a net financial loss if the majority of the audience is domestic.

​The Economic Struggle of the Nigerian Listener

​Sarz was quick to point out that the lack of revenue isn't due to a lack of interest. Nigerians are world-renowned for their love of music and culture. The issue is purely financial. With the current state of the Nigerian economy, a premium music subscription is a luxury many simply cannot afford.

​"People are streaming music; the people that can't stream, can't afford it," Sarz explained. He emphasized that the desire to patronize music is present, but the disposable income is missing. This forces many listeners toward free, ad-supported tiers or unauthorized download sites, neither of which provide the artist with substantial financial returns.

​Waiting on the Government: The Way Forward

​When asked about the solution, Sarz pointed away from the music industry and toward the halls of government. He argued that the music industry has done "very well with the resources we have" and has overcome numerous obstacles to gain global recognition. However, the industry cannot fix the national economy.

​“We [Nigerian entertainers and executives] are waiting for the state of the country to get better so other things can start improving,” Sarz stated. He believes that the only way to truly empower the music industry and its fans is through economic stability. When the average Nigerian is empowered financially, they can afford to pay for the art they consume, which in turn fuels the growth of the creative sector.

​Conclusion: A Call for Structural Change

​The insights shared by Sarz serve as a wake-up call for stakeholders in the African creative economy. While Afrobeats continues to dominate global charts, the "home base" needs economic fortification. Until the Nigerian economy stabilizes, artists will continue to rely on international tours and foreign streams to sustain their careers.