Disruptive Innovation and the Rise of Skiza Tunes in Kenya's Music Scene

Platform capitalism took root in the early 2000s alongside what is now called the Fourth Industrial Revolution (4IR). The theory, advanced by Nick Srnicek, describes a business model that brings diverse groups together on a digital platform to exchange goods and services—chiefly data. "Data is the basic resource that drives these firms, and it is data that gives them their advantage over competitors," wrote Srnicek. These digital platforms have replaced traditional gatekeepers, stepping in as intermediaries between content creators and consumers. They offer infrastructure that allows data to be exploited at the touch of a button.

This technological shift has dramatically transformed how people consume and pay for music. Ubiquitous access to services has become the norm. Well-known platforms that follow this model include Uber, which connects riders and drivers in real time, Airbnb (a San Francisco marketplace for short-term rentals), Rolls Royce (which rents out jet engines), and Spotify (a leading music streaming and download service). As Papadimitropoulos observed in 2021, under platform capitalism, digitisation and internet networking expand the monetisation of goods and services, making on-demand commercial exchange far more viable and efficient. The success of these platforms depends heavily on internet connectivity, accessibility, improved speeds, and affordability.

Access-based services offering legal streaming and downloads have changed how music is both created and consumed. The music industry itself rests on three core sectors—recorded music, licensing, and live performance—and each has seen significant shifts in its role, especially regarding revenue. New strategies have emerged to cope with these rapidly changing roles, merging older models and creating entirely new ones. Rayna and Striukova noted in 2016 that the lack of tools for examining business models in their entirety, combined with the complex relationship between model changes and market outcomes, makes this especially difficult. These changes are driven by fast-evolving technology. The path from physical sales of records (magnetic tapes, CDs, LPs) to digital access-based streaming and download services has been dramatic. After a period of steep decline in the early 2000s, the industry is now seeing a positive transformation, fuelled by the enormous expansion of internet connectivity and the proliferation of affordable mobile phones. Mobile applications fully supporting access-based services have further expanded the industry's reach, with network operators such as Safaricom now offering music as a key value-added service.

Skiza Tunes, launched in 2009, is a value-added service offered by Safaricom, Kenya's leading mobile network operator. It is a personalised ring-back tone service that lets Safaricom customers download music and other digital content to entertain their callers. Unlike many access-based platforms that require a smartphone, Skiza Tunes works on any mobile phone. The service hosts a large catalogue of digital content—mostly local and international music—accessible by dialling *811# from any Safaricom line. Skiza Tunes has become Kenya's biggest provider of call-back tone services, with an estimated annual gross income of KES 7.58 billion (about USD 65.8 million) as reported in Music Africa Magazine in 2022. Business Today magazine in 2021 noted that the platform had over nine million subscribers, each paying a daily fee of KES 1.50 (USD 0.012). Skiza Tunes is non-interactive for the caller—the receiver controls the music played.

This paper examines how Skiza Tunes is disrupting the Kenyan music industry, focusing on its platform capitalism business model. Specifically, it investigates the nature of this disruption and the platform's intermediary role. The new technological innovations were expected to break down the barriers long maintained by intermediaries who exploited artists during the analogue era and to help musicians see greater returns from their work. That has not been the case for everyone. While some artists seem satisfied with the platform's payouts, others have publicly disowned it. This suggests a double-edged sword role for Skiza Tunes, where the same platform that helps some succeed may be exploiting others.

Understanding disruptive innovation

Christensen (2013) defined disruptive innovation as a process whereby a smaller company with fewer resources successfully challenges established incumbent businesses. This type of business-model innovation enables entrants to enter markets with products that are affordable, user-friendly, and often lower-performing (Christensen, 2006; Christensen et al., 2016). It takes time for these benefits to materialise. Disrupters typically develop business models unlike the existing ones. As Christensen noted, disruptive innovations often begin with low-end products when consumers already have access to some version of a service, or they create entirely new markets where no such products or services existed.

Four key tenets drive disruptive innovation. First, incumbents improve along a trajectory of sustaining innovation. Second, their products eventually overshoot customer needs. Third, incumbents possess some capability to respond to disruptive threats. Fourth, incumbents end up floundering as the disruption takes hold. When incumbents fail to counter a disruptive challenge, their old products lose value and become uncompetitive.

Disruptive innovations arising from the Fourth Industrial Revolution demanded a paradigm shift in the music industry. These innovations challenged existing business models and created new ways of consuming music. The shift began in 1999 with the first wave of illegal peer-to-peer file sharing, led by Napster. From these early battles, legal platforms emerged that offered similar services. The old business model valued ownership of music, but the new era gave enormous weight to ubiquitous access. Spotify, founded by Daniel Ek and Martin Lorentzon in 2008, opened the door for many online music platforms that now provide access-based services. According to Spotify's website, the platform had 433 million active users and 188 million paying subscribers across 183 markets at the time of the data being current. Those figures change regularly.

Dauchez, the CEO of Deezer, argued in 2014 that two real revolutions are underway in digital music. First, value today resides in ubiquitous access, not ownership. Second, the global music industry's focus is no longer concentrated in the US the way it once was. Spotify itself disrupted the industry by moving from a transaction-based to an access-based model. According to Casagrande (2021), Spotify lets listeners stream and purchase individual songs rather than entire albums, which had been the norm. Earnings depend on the number of streams and downloads over a given period. Artificial intelligence integrated into the platform suggests related songs to listeners, continuously improving and personalising the service. This increases user engagement and, consequently, usage frequency.

Spotify offers two tiers. The freemium model gives users unlimited access to the catalogue with advertisements. It provides a basic, ad-supported service for free. The calls from the labels over the model familiar from many Digital Service Providers (DSP) differ depending on uptake. Daniels (2022) noted that Spotify has gained significant control over music consumption because of its playlist options, calling this feature "control of the demand curve." Yet questions remain about the shift from ownership to ubiquitous access, the intermediary role the platform plays, and the impact of both models on artists. Spotify has been accused by many industry players of favouring platform owners over content creators. As Forsyth (2017) pointed out, "middlemen became increasingly powerful, leveraging the power of their platforms while locking their users into dependency relationships." By positioning itself as an intermediary between creators and consumers, the platform makes artists heavily dependent on it to sell their music—and eliminates direct contact with their audiences.

Modern multinationals have gradually moved away from creating tangible goods and toward providing platforms for exchanging goods and services. Srnicek (2017) argued that in the twenty-first century, advanced capitalism became centred on extracting and using a particular kind of raw material: data. Platforms such as Facebook, Twitter, and Spotify do not need to create their own content or service inventory—they simply provide spaces where others do the work. As Srnicek defined it, a platform is "the newly predominant type of business model premised upon bringing different groups together." These platforms give structure for extracting and exploiting data for monetary gain.

The network effect is key to a platform's value. Users join spaces where they can easily connect with friends, family, or customers. Safaricom, the leading telecommunications network in Kenya, commands a commanding market share. According to the Communications Authority of Kenya's 2021 report, Safaricom held 67.5% of Kenya's market, compared to Airtel's 26.8% and Telkom Kenya's 5.4%. This pre-existing subscriber base has made it easier for Safaricom to dominate digital platforms with Skiza Tunes. Martin and Otieno (2019) highlighted that while digital platforms are significant intermediaries, revenue splits often come under fire.

Ezekiel Mutua, CEO of the Music Copyright Society of Kenya (MCSK), told a local daily in 2022 that the exploitation of musical works through technology has been heavily tilted in favour of business people—platforms—including tech companies, telecom operators, and broadcasters. The actual owners of copyright, the content creators, get "peanuts," he said.

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The results resonate with the Unified Theory of Acceptance and Use of Technology (UTAUT). The performance expectancy principle—"the degree to which an individual believes that using the system will help him or her to attain gains in job performance" (Venkatesh et al., 2003)—maps directly onto the pursuit of critical and commercial success that powers Skiza Tunes’ business model.

This study also uncovered that the disruption of the music industry occurred through the network effect. Artists acknowledged they must cultivate a broader online network to achieve meaningful payouts. Unlike older models that relied on television and radio to reach audiences, Skiza Tunes connects with consumers through mobile phones and social media. Artists reported that active marketing of their music among Skiza Tunes users generated strong returns. One artist noted, "the more you market the song, the more people have the Skiza tunes, and the more payments you get." In other words, a sizeable social media following translates into substantial earnings. Revenue depends on daily subscriptions, and artists with growing fan bases reap greater benefits. A gospel artist revealed, "When you go into your church, say Catholic of 3,000 people, and they download Skiza (Tunes), you are a millionaire." Previously reviewed literature on Spotify yielded comparable results: Spotify disrupted the industry by creating new revenue streams, yet it was also criticized for favoring established artists through the network effect. The performance expectancy tenet of UTAUT further reinforces this claim.

### The Impact of Skiza Tunes’ Intermediary Role

The second major finding, linked to research question two, is that Skiza Tunes’ function as an intermediary has profoundly transformed Kenya’s music industry. Skiza Tunes does not engage with artists directly; to upload content, artists must sign with content providers. One artist observed, "you know, we have different companies within Skiza (aggregators/content providers), so it all depends on one company to the other." Some of these companies mistreat artists. As one artist put it, "some are not giving the artists their rightful pay while there are some that take more than they give to an artist."

Alongside aggregators, Skiza Tunes remits royalties to Collective Management Organisations (CMOs) and Premium Rate Service Providers (PRSPs), which the Kenya Copyright Board (KECOBO) mandates to pay artists. The study found that many CMOs and aggregators lack transparency. First, they determine revenue splits with artists, rarely passing on even half of what Skiza Tunes pays them.

Second, most artists said these entities refuse to grant them access to monthly logs to verify their earnings. A frequent complaint was the opacity that pervades contracts and monthly income statements. One artist explained, "There are these other collecting bodies that are in between that do not allow us to see the logs, so you cannot get to know whether what you are being paid is what really should be paid to you, and we have had so many complaints about that, so it is a major issue." Third, artists revealed that due to insufficient knowledge of copyright and related issues, they are often exploited by these bodies. Some content providers fund artists to create work in exchange for their rights, meaning the artists gain little from the commercial success of their recordings. The literature review had already identified such exploitative practices by Skiza Tunes’ content providers. De Beukelaer and Eisenberg (2020) noted that some intermediaries exchange sponsorship for content rights.

Most artists also claimed that Skiza Tunes had monopolized the call-back tone market, making it harder for them to secure better payouts. Because Safaricom, Skiza Tunes’ parent company, had already monopolized the telecommunications sector at launch, the platform attracted a vast subscriber base. One respondent remarked, "I have my reservations about conserving the revenue split-share, which has been monopolised, for lack of a better word, but we are slowly seeing some changes."

Skiza Tunes was projected to dominate the market thanks to inheriting Safaricom's existing data and infrastructure. The platform’s enormous subscriber base gives it immense value, leaving content providers with no superior alternative for sharing their work. This aligns with principles of platform capitalism: once a platform monopolizes its product, it can set prices. Skiza Tunes dictates both daily subscriber fees and payment to artists. When incumbent companies fail to react to new entrants, they become obsolete, enabling newcomers to monopolize the market.

The researcher also noted that Skiza Tunes reaps massive profits without creating any content itself—that work falls to artists, PRSPs, and CMOs. Many artists expressed frustration with the government for not shielding them from Skiza Tunes’ exploitative tendencies, particularly regarding unpaid royalty-sharing formulas. Interviews further showed a lack of transparency about earnings. Because Skiza Tunes has no direct contact with artists, it is difficult to verify how many downloads occur each month. CMOs and PRSPs decide payment amounts. Most artists said they cannot access monthly logs to confirm their earnings. Moreover, many government bodies mandated by KECOBO to protect performer and producer rights have themselves exploited artists. These bodies take on intermediary roles yet fail to provide monthly logs. Artists feel the government enables these exploitative practices. The literature review indicated that multinationals like Spotify receive little government oversight on revenue-sharing; governments mostly focus on taxation.

### 5.0 Conclusion and Recommendations

Conclusion

This study found that while Skiza Tunes disrupted traditional music business models, it adopted practices that continue to exploit artists. Technological advances were meant to eliminate intermediary barriers that had long exploited artists, but the opposite has occurred: more intermediaries have emerged, as seen with Skiza Tunes. The Fourth Industrial Revolution has introduced uncertainties it was supposed to resolve.

Recommendations

Deliberate efforts should be made to overhaul educational systems to reflect current technological innovations. Most higher-learning institutions have not incorporated digital innovation into their curricula. As a result, the skilled labor needed to drive disruptive innovations lacks the necessary training, slowing the adoption of these technologies in the music industry. Institutions of higher learning must prioritize resource mobilization and capacity building in this emerging field. With fast internet available on many campuses, investment must flow into resources on disruptive innovation and human capital to train learners.

Furthermore, government policies on the creative economy must be reconsidered: the government should shield performing artists from exploitative firms like Skiza Tunes. Intervention is needed to push these firms toward fair revenue splits. The government should also separate Safaricom from Skiza Tunes, enabling Skiza to develop strategies that allow direct artist-firm interaction without aggregators or other intermediaries. Finally, institutions, platform owners, and governments must allocate more resources to expand research in this field, because the needs of artists in developing countries differ fundamentally from those in developed ones.