BFMA Wrap up (2/2): challenges and opportunities in the African audiovisual content and broadcast markets

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This event report is the second part of our last article entitled 'BFMA Wrap up: a much larger role for African producers and broadcasters in the future' .

Set up by Aitec Africa, Broadcast Film and Music Africa conference which took place in Nairobi, Kenya on 10-11 July 2012 was the occasion for African film makers and broadcasters to better understand the state of the market. A few of them shared experience, best practices and explored innovations in audiovisual content sourcing and distribution. Sylvain Beletre of Balancing Act wraps up some of the key BFMA presentations based on Aitec Africa's reporting.

Manu Savani, CEO of GALA GLOBAL INC of California, USA offered a distributor’s perspective. He has brought more than 1,000 quality feature films and television programs to diverse audiences worldwide including in Africa since 1966. Along the way, he has learnt valuable lessons applicable on the African continent. The most important is that different markets have different tastes. For example, when he acquired the rights for blockbuster “My Fat Greek Wife” he had expected that it would be a major hit in East Africa. However, sales were very disappointing as he posted losses on that deal. However he has also learnt that there are some theme types that better work in Africa. For example, religion, love and tragedy always have good sales.

Among some of his best performing movies were 'Ten Commandments', and 'Titanic'. There is also content that will sell depending on its proximity to the audience. One such a hit in East Africa was a great historical movie portraying the Ugandan president Idi Amin “Raid on Entebbe.” Savani has expanded his horizons by introducing independent Hollywood films to emerging markets such as East and West Africa. Savani is now concentrating on the emerging and already thriving African markets with feature films and programs whether they be religious, entertaining or football oriented.

In a similar vein, George Kimani highlighted the key role of content distribution in the development of the African broadcast industry. George Kimani is the Business Development Director of Continental Content Distribution in Kenya. The speaker discounted the old mantra in broadcast that “Content is King,” saying that a few African broadcasters may have great content but have little or no revenue. Most broadcasters have been copying each other in broadcasting Mexican soaps.

This is because they have not understood their local audiences (or because there is not much local content available). To avoid this duplication and also to turn viewership into money, broadcasters must understand their audiences. This will help them to acquire content that suits their needs. At the same time content developers should know that there is content that broadcasters will not touch while there is content that all broadcasters will scramble for.

One type of content that works is format programs such Idol or Project Fame. One of the best success stories of format content is “Who is Smarter Now?” which used to run on KTN in Kenya. The program was a good performer in the sense that it was rated highly in viewership surveys. As a result, the program had sponsorship from the beginning to the end. Broadcasters and content developers alike must make a paradigm shift in order to make money.

They must understand that connection with audience, not content, is king. To do so, broadcasters must position themselves properly in the market. They need to understand viewers needs through research to find out their tastes. This will also help them schedule their programs in line with the preferences of the relevant audience. They will also need to distinguish between content that attracts viewership and content that builds loyalty.

Some programs like “Cheaters” may be good in attracting viewership but they might not be helpful in building loyalty. Further, the broadcasters must distinguish between content that is entertaining and educational and content that attracts revenue. Formats is the type of contents that can build a broadcaster's revenue. Lastly, broadcasters must begin spending to market themselves. Most broadcasters in Africa do not market themselves and those that do so do not a good job at it. There is need for the broadcasters to know that they are brands and if they do not promote the brands then they will not attract revenue.

Justine Atkinson, CEO, Aya Distribution is focused on the distribution of African content in new market. Atkinson took the participants through the experience of the company in distribution of African films in Europe, America, Africa and Canada using the example of her company.

Her involvement with African movies begun when she worked with 'Save the Children' Nigeria. Save the children is an international charity organisation to safeguard children rights. Her moving into Nigeria coincided with the explosion of the Nollywood movie industries. People across Nigeria and the entire Anglophone West Africa were all scrambling for the productions even though the outside world thought the movies were not up to standard.

Save the Children therefore decided to contract Nollywood producers to shoot a movie on female genital mutilation as part of its campaign to protect the girl child. The movie was a huge success and helped Atkinson harness the potential of the movie industry. When her time to leave Nigeria came, she set up the company opening up distribution channels in US, Canada, Europe and Africa. In her experience, Africa has unique stories that make good sales across the world. The company is currently distributing six titles from various countries. These include award Dabla Excision, a documentary on female genital mutilation. Others are Robert Mugabe: What Happened, Operation Survival, Progress, Gossip Nation and Promise Land. The sales are good because there is demand for such original content.

Aya distributes content to multiple platforms and in a variety of packaging. The company has screened movies in Kenya, Nigeria, Ghana, South Africa, UK and US. The company also distributes to televisions and also provides video on demand. Besides Aya sells in flight content to airlines. Besides selling the content, Aya is also involved in production. Recently, the company got into collaboration with a Nollywood Producer and began working on a movie on female genital mutilation.

When it comes to innovation, Abubaker Kawenja, Broadcaster, Journalist and Theatre Practitioner in Uganda had a few ideas to share. Kawenja started by pointing out that the major complaint among content producers in Africa is that there is no financing. However producers, especially young ones, need to think around this challenge since funding will always be a problem.

Mobile cinema can help young producers to supplement their budgets. Mobile Cinema is a kind of survival strategy for young African film producers. This is because the challenges that stand between them and financing are many. Some of the challenges include piracy which means that the producers sales are not guaranteed and poor quality products which means that the premium buys may not be attracted.

Another challenge is poor distribution channels that means it both takes time to get a film seen and it may not be seen by many people. Furthermore, lack of collateral means that the producers find it hard to get financing from conventional financiers. Other challenges include the tendency of African young producers to work individually thus not benefiting from pooling strengths and talents.

Mobile cinema therefore provides the avenue where they can begin building their resources to help them do productions that can be distributed through other channels. This channel has its own strengths as well. It ensures that the producer has total control over the product as well as widening the audience in the long run. It also provides the producer with the opportunity to interact with masses and thereby getting deep insights on how to interact with them.

Despite these various challenges, it seems that satellite will drive the future development of the African broadcasting market. Christoph Limmer, Senior Director, Market Development and Marketing for Africa at SES proved that it can be the case. Broadcasting through satellite will be in the African market for long time.

This is because the infrastructure for terrestrial network does not cover the whole continent and takes a lot of time to roll out. There is a common notion in the market that satellite is an old and expensive network. However the opposite is the truth in the long run. For example SES has coverage of 99 percent of the world population through 51 geostationary satellites connected to a network of teleports and offices across the globe. Satellite has evolved over time and is now more flexible and versatile because it combines various functionalities. As the world moves to the digital broadcast, broadcasters would do well to think about how they can maximize the benefits of satellite and terrestrial networks. Besides, new triple play offerings via satellite is the new value add that can drive the business of African broadcasters. Some of the triple play service providers such as Zuku are witnessing a remarkable growth in the African multi-play market.

To make better use of satellite a huge amount of insight is required by broadcasters. Broadcast Content delivery is all about Capex vs. Opex. This is what Steve Rich, Regional Head for Africa at NewSat explained. This will avoid the deaths of satellite broadcasters that have been witnessed in the Africa. If there is agreement that the rate of satellite broadcasters development is slow what can be changed? The place to begin is to understand the business model in broadcast. Currently, Pay TV does almost everything in the business value chain. They do content management and archiving, payout services, encryption services, signal broadcast services, internet services, and also end user equipment sales and distribution.

Yet to run the business profitably, a broadcaster only requires minimum functionality in the workflow from content to the end user. Business cases have to be built around revenue potential of the market served. Thus, the broadcaster should concern himself with the core needs which in this case are procuring content, packaging the channels, ensuring that there is delivery in the channel, and attracting subscribers.

A pay TV broadcaster needs to breakdown the silos in the workflow to reduce the costs of delivery. This approach has worked well for Zuku. This includes giving up unnecessary non-core functions without losing the objectives. This will allow the aggregation of resources and economies of scale in the delivery platform. Business is therefore analysed on a per channel basis.

In the panelist session, Gaethan Donlap Kouanga, Sales Manager for Africa at Eutelsat introduced satellite broadcast as a key communication link not only broadcast transmission, but also in voice telephony through VOIP and internet access, in what is technically referred to as Triple Play. He pointed out that despite the wide deployment of fibre optic cables across Africa, the last mile link still remains a big, expensive challenge, and a major hindrance to universal access to the internet.

Affordable high quality communications is still unreached across the continent. While most internet and data backbone infrastructure service providers have been in favour of Wi-max as the last mile solution, the reality on the ground is that there is still very little investment in this field on the continent, which leaves the investment in fibre optic cables idle despite the high demand for its services.

His company, Eutelsat, thus came up to serve the French speaking Western and Central African clientele using the Eutelsat 16A satellite. To make the services accessible even in remote areas, Eutelsat Company launched the "IP Easy" broadband platform, which offers high-speed internet, VoIP and TV broadcast access to homes and businesses across the target regions.

As Gaethan explained, much of IP Easy's success has been thanks to its set-up, which is so convenient that with just a small receiver dish and a modem connected to a PC, users can connect to the internet irrespective of their location. Hooking up the system to a TV set-top box opens up a whole new world of free to air digital TV broadcast. This is also becoming an attractive platform for various pay TV broadcasters in the region. The service comes with a self-installation feature which enables end-users to autonomously install the complete system with no specific qualification needed or expensive tooling. Having successfully covered French -speaking African countries, Eutelsat is casting its eyes on the wider English-speaking markets of Nigeria, Ghana, Zimbabwe and Kenya among other to further extend their services across the continent. See the full details in a previous top story.

Other avenues content providers should explore include mobility. Back in Nov. 2011, we relayed a 26% growth in African Mobile Advertising Market.

Joel Rao, Business Analyst and Account Manager, InMobi in Kenya explored why brands should be using mobile media: he delivered insights into mobile media consumption in Africa.

Rao stated that the penetration of the mobile phone is higher than TV sets in Africa. There are approximately 750,000 TV sets in Kenya and over 20 million phones; 49 percent of Kenyans spend time on mobile internet and 53 percent of those who spend the time on mobile internet do so to check sports scores especially soccer when the game is happening.

Therefore, it is important that brands create mobile content that engages targeted consumers. Further inMobi studies have shown that male subscribers use mobile internet to access sports and news content and 32 percent of women use mobile internet for shopping while 56 percent use the mobile internet to buy music. At the same time, 30 percent buy video. Brand should ensure that their mobile content is search engine optimized. This is because research shows that people do not beyond the first page of the search engine.

There is such a thing as searchandising. This means selling through the search engines. Brands must understand this art in order to make use of the platform provided by mobile internet. Brands would do well to create mobile internet websites which are search engine optimized. But they must also understand some basics about consumer behavior online. Research shows that 46 percent of people who use the internet for shopping look for product information and availability while 34 percent look for information about sale promotions.

To gain maximum benefits, Brands should combine social media and mobile internet. Research shows the following trends in drivers of shoppers to retailers; 16 percent by online advertising, 18 percent by outdoor advertising, 34 percent by mobile and 42 percent by social media. Therefore a combination of mobile and social media gives access to 76 percent shoppers. To activate such a linkage, the brands need to facilitate social media media through mobile.

For Nicole Klassen, Head of Content at Bozza in South Africa, mobile content is emerging in an evolving media landscape. Frustrated by failure to push their content through the mainstream media, a group of South African film makers, poets and musicians set up Bozza to distribute content through the mobile phone. Bozza gets short audio or visual content from artists and uploads it on its website where people can then download through their mobile phones. The consumer then pays through the payment system offered by telecommunication companies in the countries where Bozza operates. However, the business is not yet profitable. Part of this is because the cost of the downloaded content is low and because the people equipped with smart phones which are 3G enabled are few across Africa, but this will change. In the meantime, Bozza is exploring how it can grow revenues by attracting advertising.

Digital migration in Africa - a recurring topic at recent African broadcast conferences - was not left out. Three presenters - Meredith Beal, Isabelle Kadagor and Nicholas Omondi - shared their views. The session started with an introduction to digital migration in the continent by Meredith Beal.
He took the audience through the various benefits of going digital, among them being freeing up of the current analogue frequencies for other communication services, opening up opportunities for creative content developers to meet demand from increasing number of broadcast channels, besides setting up the stage for implementation of e-governance across the continent. Nonetheless, Beal explained that there have been a number of challenges towards achieving digital migration.

Some of these include broadcasters having to do away with their heavy investments in transmission infrastructure and having to retrain their staff for digital technologies, content providers having to upgrade their equipment so as to produce better quality productions with High Definition (HD) being the preferred video format, as well as consumers having to meet the cost of the set-top boxes to enable their TV sets receive digital broadcasts.

It emerged that although the global deadline for crossing over to the digital broadcast platform is 2016, various countries across the continent have set their own individual deadlines ahead of time in order to give them sufficient time to implement the necessary procedures and systems, and also testing. The audience was taken through the progress status of the migration across the continent, where Mauritius was the first African country to go fully digital in 2007.

Isabelle Kadagor, the manager in charge of multimedia services at the Communications Commission of Kenya (CCK) took the session through some of the most asked questions in the digital migration process.
She explained that the government in February 2012 formally adopted Digital Video Broadcast Technology 2 (DBVT-2) as the preferred format in the country as it offers 30 per cent savings on spectrum, hence more content per channel, among other benefits.
Isabelle also took the audience through some of the awareness creation activities that the CCK is taking towards ensuring the country goes fully digital by end of 2012. These include campaigns currently running on local TV stations, as well as planned road shows intended to coincide with launching of digital signal receivers in various parts of the country.

Nicholas Omondi, a senior techie at the Kenya Broadcasting Corporation, one of the only two currently licensed digital broadcast transmission carriers, took the audience through the separate functions of a modern transmission station.

He explained that in the new set up, broadcast stations will only serve the function of providing the licensed transmission carriers with broadcast content, and that the stations won't need to invest in individual transmission infrastructure.
The effect of this will be lowering of the entry barriers for new broadcasters wishing to enter the market. This will also allow the stations to focus more on their core functions of content development and leave transmission to an independent carrier, among other benefits.

Nicholas also outlined the digital signal reception roll out plan for Kenya, where he said that the initial service commissioned in 2009 by President Mwai Kibaki currently covers a radius of 60Km from Nairobi. Mombasa is also compliant, with tests currently being done in Nakuru, Kisumu and Nyeri and other towns to follow in due course.

The changing role of the radio business model was also part of the conference; Phil Collins, MD of Clyde Broadcast, UK brought to the audience’s attention the fact that in most cases, a dominant player in the radio broadcast business will most likely have a number of other stations across different geographical regions. A major advantage of this is the ability of the broadcaster to do more with the same content that he has, create wider market for advertisers, and also help clients in different areas reach their neighbourhoods with relevant content about their regions.

Nonetheless, Phil brought out the challenges that this kind of setup presents the broadcaster. Among them was the fact that most of the content tends to be capital-centric, it becomes too costly for smaller advertisers to afford since they are charged the cost of communicating to an entire country while they only needed to talk to a small specific region, and sometimes the satellite stations tend to compete for business with the main station.

This notwithstanding, Phil introduced a model that can help the broadcaster achieve the best of the both worlds, and that happens to be a kind of equipment that his company deals in. Using the Clyde broadcast set up, a station can comfortably run nationwide content even on a regional radio station, and automatically override the content with local station jingles and local adverts, and then switch back to the national broadcast.

Also, the system can provide an opportunity to create wider awareness of the various satellite stations, whereby each station can speak to the national audience on a specific issue of national interest happening in their geographical area. In this way, the overall cost of human resource and training comes down significantly as talents can be used across the entire network. It also becomes easier to integrate local content in broadcasts, thus creating a sense of local ownership of satellite stations.

Julian Macharia
, Deputy Programmes Director, Royal Media Services, took the audience through the changing world of radio broadcast, and what broadcasters need to do in order to survive. He explained that the East African radio market is already saturated, yet it continues attracting more players by the day, further segmenting the market and reducing the amount of revenue that a station can earn.

To illustrate this, he pointed out that more than 10 new radio stations have been licensed in Kenya alone since January 2012.As a result of the fierce competition, the stations are approaching clients directly and cutting deals, in the process reducing the role of Public Relations (PR) and advertising agencies, which earlier handled media buying on behalf of clients.

As a strategy to survive, Julian told the audience that radio stations have to go beyond voice and offer more value added services to their audiences, such as market research through live call in programmes, production of commercial adverts, as well as organizing road shows, exhibitions and activations on behalf of their clients. Presenters also have to create public presence through new media such as Facebook and tweeter as a way of interacting with their audience.

The next BFMA event
  will take place on 3-4 July 2013 at the Oshwal Centre, Westlands, NairobiNairobi, Kenya. Aitec Africa welcomes conference papers, sponsors and speakers' applications now. The conference delegate feedback will help build a stronger event and contribute to a more innovative African broadcast industry in 2013.

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