New African-owned UK and US TV channels target diaspora Africans with IP-TV

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Two new African content channels – one in the USA and the other in the UK - are fighting hard to get the attention of Africa’s diaspora populations. Early results from both seem to show a significant preference for IP-TV as a delivery mechanism, particularly amongst younger users. Although user figures are modest, both companies are looking at global rather than territory rights, thus breaking down more traditional industry approaches by using IP-TV. All this is good news for Africa’s film and TV industries as the payments being made for global rights should be a significant additional financial shot-in-the-arm for programme and film producers and directors. Russell Southwood looks at what’s happening.

African diasporas – Africans living outside their country of origin - range in scale from the size of a small country to something more akin to the size of a small town. At the larger end, according to Migrant Information Source, there are 2.2 million Moroccans living in Europe. On a smaller scale, in 2002 there were 1 million African foreign born citizens in the United States . Obviously this headline figure breaks down into smaller country communities. In the same year, there were approximately 139,500 Nigerians and 108,000 Egyptians, followed by 87,500 Ethiopians, and 70,000 South Africans. And these figures will have increased from the point this census was conducted in 2002.

According to a survey by US pollsters Horowitz Associates, 71% of the African-born and 22% of African-American respondents indicated that they access African content online or on television. Based on these figures, US-based African channel Africast calculates that the “addressable” market is the 8 million US homes with broadband access lived in by African-born or African-American citizens. Therefore Africast has set itself a five year target of reaching 240,000 subscribers who would then generate for it some $60 million in annual revenues. It is currently rather coy about subscription levels but says that these have reached “the thousands”.

Africast (www.africast.tv) is run by a Ghanaian-American called John Sarpong and describes itself as “the world’s leading subscription-based broadcaster of African ethnic television over broadband as measured by the number of African ethnic channels under agreement (40 channels from 25 African countries as of June 2007)”. Africast has secured the rights (mostly exclusive) to distribute television and film content, sports and music from Africa.

Approximately 70-75% of current subscribers are Africans living in the USA and Europe and the remaining 15-20% are non-Africans like African-Americans. As Sarpong says:”We define this (latter) category as ‘African culture fans’”. Interestingly around 40% use their laptops to access material and these tend to be the younger users. The rest are families who watch the television in the more traditional setting of the living room.

Its set-top box costs US$125 although this is discounted with various packaged offers. There are two bouquets: basic at US$15.95 a month for 10 channels from African countries and a premium offer at US$19.95 a month which adds an African movie channel, a music video channel and a general entertainment channel. Africast sees its main competitors as JumpTV, Africa Channel, Globecast and ABN America.

Africast is currently based in Huntington, Connecticut. The company operates a low-cost “virtual” office environment, with 20 full and part time employees and subcontracts many services such as hosting, studio work, and telephone answering services to third-parties. The company’s Africa NOC/transmission center is located in Accra, Ghana, where a staff of ten people oversees downlinking, editing, transcoding and uplinking of African television channels to the Africast distribution center in the United States located in Plainview, New York. The television content is then distributed to subscribers via the Internet. The facility in Ghana currently operates eight downlinking antennae for receiving African television signals and one mega-antenna for uplinking signals to the United States.

Africast subscribers watch programming directly on their PC (ITV) or purchase a set-top box from the Company to watch programming on their television set via broadband Internet (IP-TV). For subscribers who do not have credit cards or prefer to pay by cash, the Company offers the Africast prepay TV cards distributed at over 6,500 selected retailers in North America and Europe. Its streaming speed for IP-TV is 750 kbps.

Although buying rights in the fragmented African market is never easy, Africast has its own dedicated team according to Sarpong:” We have consultants and our own employees and we engage various channel partners and get rights to content that way. We also have VOD with movies on a pay per view basis which we have done through specific film producers and directors”. The film producer generally sells the DVD and theatrical rights to someone else and Africast buys the IP-TV rights. These costs between $1000-10,000, depending on the type of film. This is usually paid as a mixture of advance and revenue share on income made.

It has ambitious plans to increase its reach:”In about 45 days time, we are going to penetrate the Church market. We will do VOD for each Church partner. Church members can then subscribe to the basic channel to get their Church’s sermons for free. We will then give a proportion of the subscription income to the Church. This will appeal to African-Americans”.

It also intends to go into Africa and will add global Black-focused channels for its offer there:”We want to work strategically with ISPs. You need a minimum of 750 kbps download speed and there are not too many African ISPs that offer connections of that throughput. It would be aimed at individuals who would choose to go for a higher speed connection in order to get IP-TV. We would target Nigeria, Ghana and South Africa and expand into Kenya and other countries after those three”.

It is very close to finalising a US$10 million investment and this will see the company scale up more quickly. Sarpong says:”There has been a tremendous amount of interest from investors. These investors have seen the money that was made when Viacom bought BET and it was the same when TeleMundo (a Hispanic channel) was bought by NBC”.

The African Movie Channel (AMC) is a UK-based company run by two former Nigerian computers engineers. It has recently made its movies available online at www.africanmoviechannel.com. According to AMC’s Yinka Maungbo:”Hundreds of Nollywood and other African movies are now just a mouse-click away, for viewers to watch on their PC and TV whenever they like! Viewers can enjoy the fine works of some of Africa's best producers and directors, including Tunde Kelani, Charles Novia, Fred Amata, Chico Ejiro, Paul Igwe, and many more.” All content is in English, or sub-titled in English.

The African Movie Channel launched as a Video-On-Demand TV channel in the UK on the Homechoice platform (now Tiscali TV) in April 2006. But last month it decided to quit Tiscali TV as this more traditional alternative delivery method was not reaching its core audience. As Mayungbo observed:”It doesn’t have the footprint of BskyB. It only covers London and Stevenage and subscribers have to live close to the phone exchange. We had between 3-500 subscribers on Homechoice paying £9.99 per month for which they were offered 20 movies per month. Also it has no plans to roll out into the predominantly Black areas. Online began to out-perform the TV version within a month and this was the final nail in the coffin for our relationship with Tiscali TV”.

He is an ardent proponent of IP-TV because it gives you content choices that are not constrained by the idea of scheduled TV:”You can see streaming movies immediately. The quality is pretty much what you’d get on TV or DVD. We do a 1 meg per second streaming speed compared to the 600 kbps from others. It’s so good that you can connect your laptop to your TV and not tell the difference. We currently have 4,000 registered users. Registered means that they have watched a pay-for film”.

There is a download version of AMC’s movie choice on BT Vision, the UK telco incumbent’s new IP-TV offering. Mayungbo says:”The deal with BT Vision is that we make a selection of movies available and do a revenue share between BT Vision, African Movie Channel and the rights holder. Currently we have 15 films available on the service and we are still the only non-mainstream provider on the service. The Bollywood and Chinese films are not available yet although they will be in the future”.

It is also currently in talks with Virgin Media:” We are focusing on on-demand rather than broadcast: You want people to be able to watch what they want, when they want to. It offers you a world without the constraints of scheduled TV”.

Mayungbo thinks that IP-TV is also good for rights-owners, although many of them are suspicious:” We are doing something totally unprecedented. The rights owner is making money every time the content is viewed by the consumer. The contracts tend to be signed on a revenue share basis. This didn’t go down well with the rights holders in the beginning so we had to adapt it slightly by offering an up-front advance and then a revenue share each time the film was viewed”.

The numbers are currently too small to be more than a slight blip on the radar of most rights-holders but it’s clear that both of these companies are focused on small niche markets that are globally distributed. Interestingly, there do not yet appear to be equivalent diaspora niche channels for French and Portuguese-speaking African diaspora populations. But it’s probably only a matter of time…