Seasons Greetings from Balancing Act - Issue no. 253

16 December 2016

Top Story

Dear readers, viewers, contributors and advertisers

Africa’s broadcast sector continues to move forward and promise significant growth in the medium to long-term. However, in the short term it’s a tough task balancing the positives and the negatives.

DTT: Slowly does it…: Digital Terrestrial Television's (DTT) slow deployment across Africa continues to limit universal access to information and entertainment for citizens. The number of African countries that has started the DTT process has increased but the number that have finished remains more or less the same.

At one end you have a country like Liberia which can’t afford to finance the process and is uncertain about the loan the Chinese are offering. At the other end, you have a country like Cameroon which has got DTT out to the main cities and has ambitious plans for the state broadcaster CRTV to run 5 channels.

New entrants: There have been three new entrants into the African broadcast market. The largest of these – Kwese TV - has been birthed by mobile operator Econet Media. It bought the two MTG free-to-air operations in Ghana and Tanzania and is headed up by their former boss Joe Hundah.

The most visible sign of their presence so far has been the vacuum cleaner sound as they suck up large numbers of talented people from other companies. It will be both a Pay TV and a free to air operation and its sport acquisitions make it look like an interesting potential challenger to DStv. The other ace they carry is that through Econet’s Liquid Telecom they have access to Fibre-To-The-Home subscribers.

The other new contender is less spectacular but interesting in terms of how to tackle vernacular language on the continent. Moby Group’s Kana TV  is a satellite free to air operation in Ethiopia that is dubbing programmes Ethiopians like to watch into Amharic. By all accounts, it has been very successful.

The final new contender of interest is BBC Worldwide’s purchase of South African production company Rapid Blue. The motivation is hard to read but it’s partly that the BBC is aware that the next big show might come from somewhere outside of the circle of London’s M25 motorway and a desire to source new ideas from trusted hands.

Great year for African film and TV content: It’s impossible to mention all of the considerable number of great films and programmes that have been made this. But let me just tip a nod to those made by people I’ve interviewed: the docu-drama Mandela’s Gun ; TV series The Nairobians and Runs Girl; Shirley Frimpong-Manso’s Shampaign; Tebogo Malope’s Love and Broken Bones; Charlie Vundla’s The Cuckold ; Biola Alaba’s Bukkas and Joints  and RoK Studios Mary Njoku’s historical TV dramas Slate . Finally, Digital Lab Africa has been pioneering some of the most interesting content development in Africa, including Virtual Reality with Ingrid Kopp’s Electric South:

Strong headwinds for advertising sales: It’s taken Africa a while to adjust to the loss of the commodity-fuelled Africa Rising narrative out there and there are still people out there talking as if it was a current living reality. Wake up, people. It’s near on impossible to get dollars out of Nigeria and Angola and the economic momentum in other countries has slowed down.

Problems in the mobile telecoms sector (with continuing consolidation) mean that there are both less companies out there to advertise and also those that survive are less inclined to spend like money was going out of fashion.

The increase in the number of channels (as part of the DTT transition) in some of the more competitive markets is also exerting a downward pressure on advertising and sponsorship. For hard-pressed TV channels, it is very tempting to give huge discounts and above average spots and placements for a year’s money up front. But the impact of this kind of deep discounting has been an overall loss of advertising revenues for many. To focus on this issue, we have published a report this year called Advertising in Africa – Retaining a Share of The Pie: 

Pay TV Operators Under Pressure?: When I told one of my colleagues in one of Africa’s Pay TV challengers about the arrival of Kwese TV, he shot back with some sarcasm:”Oh, great. Another Pay TV operator, that’s just what we need.”

Wananchi’s Zuku appears to be under pressure and has had to endure the unlikely spectacle of its former CEO being arrested for shooting dead his girlfriend. Mr Pang’s dream of Rupert Murdoch-style global media presence seems to move forward bit by bit. But we have to wait and see what happens when Kwese TV arrives…Meanwhile better bandwidth is eating at the edges of the Pay TV business model. A colleague in Zambia told me during an extremely clear Skype call that he’d got himself a Liquid Telecom Fibre-To-The-Home package and that the first thing he did was to dump his DStv subscription.

VoD – Moving beyond the hype curve?: It sometimes felt like there have been more VoD services launched than there are subscribers. I met half a dozen new ones at the continent’s TV buyers market DISCOP. The arrival of Netflix (and latterly Amazon) galvanized Naspers into launching Showmax. Smaller operators like PockitTV and Tuluntulu  are demonstrating some interesting numbers that might finally demonstrate that we’ve got beyond the hype curve.

Meanwhile, the mobile operators who will be the main channel to market for VoD have yet to really get to grips with offering video content. You have large numbers of Africans spending money on pirated content on DVDs or USB sticks and You Tube is always in the Alexa top 3 most used sites for the many African countries it now analyses. But somehow the mobile operators have yet to bring those two things together to create a workable service at the right price. And the king of You Tube channels must surely be Murphy Anawana’s Aforevo from Nigeria with 100 million monthly views.

Closing Africa’s Media Deficit: In June 2016 we carried a report based on market research from South Sudan showing that large parts of the country had little or no access to media. Whilst war-torn South Sudan is at one end of the spectrum, nearly all African countries have places and people where little or no media reaches.

As electricity roll-outs scale up in some countries, there’s a noticeable pattern of an increase in TV households. Some countries have used the DTT roll-out as a way of increasing access to broadcast TV. Others ought to follow their example.

A development in Kenya gives hope that even those who have no access to electricity will be able to watch television. This is the launch of a first solar-powered digital flat screen TV by M-KOPA which has sold 30,000 of these TV sets[1]. Existing customers for its solar lamps who pay off their loans can have a new payment plan to purchase at KS50 (US48 cents a day).

According to Jesse Moore, CEO at M-KOPA, “What’s remarkable about the M-KOPA + TV is it enables customers to turn the same KES 50 per day that they used to burn on kerosene into a solar-powered 16 inch TV. We are literally turning dirty fossil fuels into a renewable, digital, modern home.”

“Owning a TV is life-changing for our off-grid customers. Many of them have traditionally had to pay to watch in a café or bar, or missed out on news and current events because they could not afford to be connected to information. We are now going beyond the grid to offer TV to homes all over Kenya. It’s great for the family to be able to watch together in the comfort and safety of their home,” says Moore.

Closer to home, we’ve redone our website and since the soft launch, have made a series of tweaks in response to your comments. The old website used Drupal and if I never have to use it again, it won’t be too soon.

In addition, our Web TV service Smart Monkey TV has got 1581 subscribers. Please join the party and subscribe, by clicking on the link and pressing the red “Subscribe” button on the right at the top: The most successful of those interviewed get thousands of views and others get hundreds.

For those wanting to follow the development of Africa’s digital content and services market (particularly VoD platforms and online TV producers) in detail, you really should subscribe to our fortnightly e-letter Digital Content Africa, which has just over 2,000 subscribers. For those interested in start-ups and Innovation, you need to subscribe to our fortnightly e-letter Innovation in Africa which has just over 1,100 subscribers. Click the link to subscriber to either:

This year we have carried out many different research and consultancy projects - both large and small - for a range of clients including operators, equipment vendors, investors and policy bodies. Because we operate discreetly, you may not be aware that we offer these services. If you think you have needs or requirements of this kind, talk to us about them. In what will be a year of great change, we will have both data and ideas to help you change your circumstances.

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A big thank you to all those who have helped News Update keep ahead of what was happening in 2016. Without your help, we would not have been able to bring you your weekly dose of information and new opportunities.

News Update will return in the New Year with issue 254 on 6 January 2017.

All the best

Russell Southwood
CEO
Balancing Act

Sylvain Beletre
Senior Analyst
Balancing Act

Alice Saywood
Marketing
Balancing Act

[1] M-KOPA sells 30,000 solar TVs in Kenya and looks to add Internet access – expanding to Uganda and Tanzania: