Producing global TV formats in Nigeria and South Africa – working to a different business model

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Rapid Blue produces local versions of global TV formats across the African continent. Its two main markets are Nigeria and South Africa and it has production bases in both countries. In addition, it looks to create new opportunities through creating its own shows. Entertainment television in Africa is changing the traditional business model for broadcast. Russell Southwood looks at what it does and what it says about the future of production in discussion with Rapid Blue’s CEO Duncan Irvine.

Duncan Irvine originally worked as a contactor for MNet in South Africa doing on-air promotions but in 1993 he was behind a management buy-out of the company. However, since that point he has shifted the company from this type of work to producing global TV formats including Got Talent, Strictly Come Dancing, Who Do You Think You Are?, It’s A Knockout and So You Think You Can Dance.

It also produces a range of entertainment programmes for different broadcasters, the most recent of which is G-Ban (which means cool in Nigeria). The latter is a weekly entertainment show with live music acts and entertainment news produced for NTA in Nigeria. Business will be split 50:50 in turnover terms between Nigeria and South Africa this year. The competitors in this field are Endemol and Lagos-based Ultima that does Who Wants To Be A Millionaire.

It started to do work outside of Africa through its involvement with ABN (Africa Broadcast Network) which it bought into in 2005. In Lagos it now has a company called Rapid Blue Formats which is its production company and a separate company called Within the Box which provides a studio service to other companies. It offers a 1,200 sq metre studio, which probably makes it one of the largest in Lagos. Irvine told us:”We do post-production for our own shows but not for others but we’ll add this in later.”

The next market it is looking to expand into is Kenya and later possibly Angola and Mozambique. The markets have to be big enough in population terms to have enough advertising spend to support what are a relatively costly productions.

Licences for global TV formats cost between US$25,000-200,000 per season for South Africa. According to Irvine, it depends on the home territory and the ratings:”If a show rates well in the UK, it will cost you more. If it breaks in Holland, it will cost you less. You look at the video, assess the ratings and get a sense of what it would cost to produce.” Rapid Blue then spends around US$100,000 to buy the airtime to show 13 x 1 hour episodes from African broadcasters in Nigeria and South Africa.

Is he worried by knock-offs and copies? “There are quite a lot of rip-offs in Africa. For example, with Celebrity Takes Two the production company made a show that looks almost identical. But for the shows we do, they look better and perform better in audience terms.”

“Success with global formats is a combination of three things. You to need to partner well to: get the rights to the desirable properties in your territories; have a good sales infrastructure to get in front of “the money”, the advertisers; and have good production capacity in the back-end.”

Rapid Blue sits between the advertiser and the broadcaster, selling the production idea to an advertiser:”The producer is in the middle. It’s perfect for Coke. They say yes and I then buy the airtime. Broadcasters are like a supermarket, they sell shelf space”. In other words, the TV station is a distributor of programmes and not (in this instance) a content creator or commissioner:”From the broadcaster’s point of view, it ought to be a better model. The other model is like the BBC or ITV where there’s a budget and you commission a programme.”

“With G-Ban, the advertiser (a mobile network) we can target the youth market and it delivers this demographic for them. The TV company is a distribution service.”

The advertisers are either pan-continental or are strong across a series of sub-regional markets. For example, the beer brand Tusker has a presence in all of the East African countries and Rapid Blue is working with an advertiser to address six francophone countries. Where it’s possible to group markets together, it helps overcome the relatively small scale of some African country markets. For as Irvine says:”As standalone territories this would be tough. For example, Benin only has 3.5 million TV viewers and only 1 million in the capital.”

The biggest advertisers are the mobile companies with the exception of West Africa where the (largely) Nigerian banks are much more prominent. After the financial sector, it’s FMCG and this is largely advertising for alcoholic and non-alcoholic drinks.

Another source of income is from the SMS messages and sharing the revenues with the mobile operators:”We’ve a great case study that will play out over the next three months with a show in Nigeria where it looks set to make a profit out of SMS revenues. They will exceed production and other costs.”

So where’s it cheaper to produce programmes? Nigeria or South Africa? The answer is not maybe as you might expect:” There are many things that have a big impact on production costs in Nigeria. Because power supply is so up and down and you need generators, there’s a level of cost you don’t have in South Africa. To get around, you need cars and drivers whereas people drive their own cars in South Africa. Accommodation in Lagos is very expensive and traffic is so unpredictable that someone needed on a shoot can be 2 hours late. You can’t hold audiences late at night because they have fears about security.”

So the bottom line is that producing programmes in Nigeria is 20-40% more expensive than in South Africa. A big show in South Africa costs US$1,946-2,335 per minute against US$2,800 per minute in Nigeria:”A lot of TV is made in Nigeria at a fraction of these costs but the moment you want to produce equitable (production) values, it becomes much more expensive.”