Universal Music Plans Africa Push In Streaming Business: Bloomberg

Universal Music Group Inc is planning to expand its foothold in the African continent, Bloomberg reports. French media company Vivendi SE (OTC: VIVHY) is a majority shareholder in Universal music. Chinese tech company Tencent Holdings ADR (OTC: TCEHY) recently purchased a 10% stake from Vivendi, along with a one-year call option to buy an additional 10%.

What Happened: Bloomberg notes that one of Universal Music’s focus for 2021 is to expand operations in Nigeria, Kenya, and Ghana, based on comments from recently appointed Universal Music CEO for South Africa and the Sub-Sahara African region, Sipho Dlamini.

In an email statement to Bloomberg, Dlamini opined that the long-term development of infrastructure could present local talent with more opportunities and a platform to engage new audiences across the world.

Dlamini also clarified in the statement that Universal Music would engage with telecom giants like MTN Group Ltd ADR (OTC: MTNOY), Vodacom Group Limited, and Orange SA (NYSE: ORAN), who have a presence in this region.

Why Does It Matter: A research by Statista in March 2020, published in November, on the share of internet users in Africa shows Kenya at the top with a penetration rate of 87.2%. The growing smartphone availability and access to the internet in the African countries could be one of the complementing factors for Universal Music’s streaming growth.

The International Federation of Phonographic Industry claims that Africa and the Middle East recorded a 16% uptick in recorded music revenues and crossed the $100 million thresholds in 2019, Bloomberg reports.

In mid-December, Netflix Inc (NASDAQ: NFLX) also welcomed the Zimbabwean Billionaire Strive Masiyiwa as the first African appointed as a board member to boost its presence in Africa.

Price Action: VIVHY stock closed at $32.17, 0.23% higher on Monday.