Upstream offers operators a digital services platform with video and games content – 2.3 million subscribers in Nigeria and South Africa

22 September 2017

Top Story

It’s taking time for online mobile content plays in Africa to get a firm footing. Mobile operators don’t usually understand content plays and flounder when trying to curate and sell content. Russell Southwood talks to Guy Krief, CEO, Upstream that has successfully worked with a range of African mobile operators to provide successful video and gaming platforms.

Upstream’s origins were as a company that ran marketing promotions for mobile operators around the world but it now describes itself as “a mobile commerce platform, accelerating m-commerce in high growth markets.”. Krief joined Upstream as Chief Innovation Officer in 2004 and was made CEO in June of this year.

It runs its own proprietary platform and pitches itself as the solution to the need for effective digital services:” Our software and infrastructure platform already enables 1.2 billion people to effortlessly receive and pay for the most relevant and affordable digital subscription services on their mobile devices. We have 80 million paying subscribers in 45+ countries, making purchases worth $237 million in 2016 alone and growing rapidly. For mobile operators we are a strong partner that leverages their assets to become key players in the mobile commerce space. For developers, publishers and service providers we offer a shortcut to the next 3 billion consumers”.

The services it offers includes video and games portals, a top up loyalty programme and a security kit (a suite of things including anti-virus and cloud services. Its biggest markets in Africa are Nigeria and South Africa:”We started working with Glo in 2007. Nigeria’s our main market but we also work with MTN, Airtel and Etisalat (now 9Mobile).” The MTN service officer is an all-you-can-eat subscription-based service. This can be bought on a daily or weekly basis daily (free of ads) for between N10-20 to N60 for a week.

Outside of Nigeria and South Africa, it operates in a range of countries including most MTN territories, Zambia, Cameroon, Ghana, Cote d’Ivoire, DRC and a long list of other Sub-Saharan African countries. In North Africa, it’s also in Egypt and Tunisia.

Upstream gives the mobile operator a curated package of content but does not do the curation itself:”We work with players who have their own content and have our own content team who review (the offer). We are not the next Netflix. We help (operators) with curation and adaptation. We are mindful of the quality of the videos which need to be of not too high quality so as not to consume too much data.”

“When we have digital content services, at least 40% of the content has to be local because local content is way more popular. From our customer surveys, 70% prefer local content. We commission the partner to do that. We give them a series of requirements and they have to provide content to meet those requirements.”

So how is the payment process handled?:”In Nigeria, users pay using airtime. The mobile wallet has not been a great success (for one major operator) in Nigeria. But in other markets where is operator has a presence, it has been successful in using the mobile wallet.” So as with many things, it varies depending on the country.

Taking Nigeria and South Africa together, it has 2.3 million subscribers and it is “adding 5,000 subscribers a day on average. You always do a free trial to let users experience it and then move them on to paying.” It claims a 50% conversion rate from the free trial users to the paid ones.

So what does a mobile operator need to do to operate these kinds of services successfully? He thinks that the now quite widely available adaptive streaming is essential:”The quality you can deliver through a Wi-Fi hot-spot will be very different from what you can deliver on say, 3G. For the same reasons, it’s essential to have an offline mode so that the user can download something and watch it later:”We make a lot of adjustments for data quality and the device ecosystem.”

The other issue is the structure of pricing. You need to have prices low enough for daily recharge so the price does not become an obstacle to the user:”Users recharge 5.8 times a week. The CRM aspect is also very important. The only interface with the products is a small screen. Purchase confirmation is a text message. You need to be able to offer the user the ability to change the preferences on the subscription via a limited channel.”

At present it’s very focused on digital content services but has plans in the future to also focus on extending the range of digital services that users will be able to access using their smartphone:”We are looking at things that are specific to Africa where you can purchase using a service with a few clicks. The current online advertising system has high levels of fraud and a customer may be charged for a service they don’t want. We want to have a security layer to protect all their digital purchases. We’re applying the same processes that you find in the payments industry.”It also wants to optimize the customer acquisition process for operators.

“More and more subscribers are going over to smartphones and there are new patterns of services and consumption and we’re excited to be at the centre of it.”

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