Seasons Greetings from Balancing Act

18 December 2017

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Dear readers, viewers, contributors and advertisers

2017 has not been a great year for Africa’s broadcasters. Consumer demand in key economies has been down. The proliferation of channels in more competitive economies has put even seemingly solid companies under pressure. Some have been forced to let go of staff. Currency pressures have been hollowing out the Pay TV model. The young’s obsession with social media has been eating away at the edges of their radio and TV consumption.

Centre of gravity for Pay TV shifts: The most dramatic shift of the year has been in the Pay TV market. For years, DStv has been the dominant player in Sub-Saharan African market and has successfully seen off all challengers. Its historic contractual hold on key content made it difficult to beat. A long while ago Gateway TV came and went and Wananchi came and is not looking in good shape competitively. Star TV hangs on in there but has been much quieter this year.

But midway through the year came the story that DStv wanted to sell its Sub-Saharan Pay TV operation to MTN. It emerges that it’s on the block and so far has collected “no’s” from both MTN and the new challenger Kwese TV.

Kwese TV is spending very large sums of money to become the company that replaces DStv. The current level of the dollar exchange rate makes it a very hard time for Naspers to compete with Kwese TV’s level of spending. A more open and competitive Pay TV market can only really be a benefit to the continent’s content producers.

New digital content producers: Ghana’s Nicole Amarteifio goes from strength to strength. Her series An African City that started on You Tube before being bought by television. Series 3 has been bought by a US network which means that some African content can sell globally. Better still, she’s on an online platform where she’s been selling episodes from the previous series and the revenues have played a big part in financing series 2. And she’s got a new TV series pilot and a film out….

Thabo Dabengwa, Reel African is producing content for Africa’s new digital era. It’s cheaply produced using an iPhone 7, it’s fast-moving jokes and comedy and it’s targeted at mobile users. Three things look like that might define the feel of new African media content for the future: made with one eye on the mobile platform, often short-form and social media savvy.

New Business Model? Content across all platforms: There’s a slow-motion redefinition of content distribution happening in Sub-Saharan Africa. In the old days, most TV stations were vertically defined with their own in-house production teams and they owned their own transmission masts. Today there are multiple distribution platforms – satellite, DTT, FTTH, VoD and mobile – so the decision is how to get audiences (often maybe different audiences) across all of them.

The key link for TV and radio is getting audiences: it’s the same whether your shareholder is a private owner, publicly quoted shareholders or the Government. The challenge is then how can you monetize all of these platforms effectively. The attitude of Abdulai Awudu, Multi TV in Ghana towards VoD platforms is instructive.

Making money from social media and extending your online audiences is perhaps one of the toughest challenges for African TV and radio broadcasters. Immedia’s Anice Hassim has created a platform called Fabrik which shows how this might be done.

Not surprisingly given the uneven quality of African Internet connections, there are still sceptics on the online and mobile front. But midway the through the year, the World Broadband Speed League released its data. There are 39 African countries in the League. Out of these, only three countries barely clear the bar of a 0.5 mbps connection: DRC, Burkina Faso and Gabon. However, all the rest have in place speeds on fixed connections that will support streaming. Fibre-To-The-Home has begun to spread more widely across Sub-Saharan Africa and you will hear more about it in 2018.

The shape of things to come? Watch NBC’s Lucy K talk about the work of the Mobile Reporting Unit that uses smartphones to film reports, edits on the spot and then can repurpose content for TV, radio, mobile or social media:

Satellite TV and DTT: Two platforms that are having a very direct impact on TV broadcasters are Free-To-Air Satellite and DTT. Ignore Africa’s slow dawdle to the finish line with DTT and look at the impact in countries where it is already under way. It has allowed the flowering of many TV channels but few of the newcomers have been able to carve out a niche for themselves and there has been a high turnover in the new channels

Kin Kariisa, the Executive Chairman of Uganda’s Kin Group Ltd, the holding company for NBS Television, Salam Television, Sanyuka Television, Screen Media, and Dreamcatcher Productions summed it up best:” I don’t think 28 channels (in Uganda) will survive. People are putting in money without getting a return. There are really only 3 companies running channels that are making money: ourselves, Bukedde TV and NTV. Between us we run 10 channels and can redistribute money between channels. I don’t think (the owners of the other channels) will keep putting in money without getting a return”.

Satellite Free-To-Air has been most successful in Ghana where Multi TV has built itself a leading position on the top platform. Crystal TV is now following suit. Establishing a good free-to-air satellite position means that you can then extend to a Pay TV offer using your larger FTA channels for marketing.

A resurgent, more professional Nollywood: Nigeria’s film industry has come back in resurgent form and has begun to professionalise itself. iROKO TV’s Rok Studios (founded by Mary Remmy Njoku). Moses Babatope’s Filmone also had a good year. Using its cinema chain and a slate of interesting Nollywood films, it has built an unusual combination of both critical acclaim and revenues.

Its film 76 (about an attempted military coup in that year) opened in the Toronto Film Festival and its comedy The Wedding Party took the highest ever box office in Nigeria. The Wedding Party 2 is releasing soon…

This more professional approach is having a good impact on the rest of the industry. The story of See Feem’s Enyi Omeruah is an instructive one. He started as a talent agent for musicians and actors, including his comedienne sister and is now moving out into producing films.

A key part of this success has been the existence of cinemas from which they can get a decent box office return. New cinemas have come to various francophone West African countries and the MTN Movies House in Congo-B claimed that its attendances had tripled every month. The most successful film? A comedy by Mamane called Welcome to the Gondwana of Mamane (Côte d'Ivoire - France).

Advertising sales: This has mostly been much the same as last year. Less mobile operators means less advertising. This is best exemplified by the creation of a new merged company in Ghana called AirtelTigo: in other words, there will be only one ad budget rather than two in 2018. Struggling new TV Channels are more inclined to give big discounts on rate card prices: having some money is better than no money at all. But the overall effect has been to keep discounting levels very high in most of the main African broadcast markets.

Our Web TV service Smart Monkey TV has got 1918 subscribers. If you need to understand how to compete in the changing media landscape, 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 2,200 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 1,300 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 2017. 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 279 on 12 January 2018.

All the best

 

Russell Southwood
CEO
Balancing Act

Alice Saywood
Marketing
Balancing Act