African YouTube challenger StarNews Mobile looking to monetize broadcaster music and comedy archives, attracts Snapchat investment
4 June 2021
Finding a business model for video streaming that works has been one of the key challenges for Sub Saharan Africa’s digital economy. Users want to look at stuff but who is going to pay? Russell Southwood talks to diaspora Cameroonian entrepreneur, Guy Kamgaing, CEO and Founder of Star News Mobile about how his company is doing it.
Guy Kamgaing was early into the mobile content business, too early as it turned out. He launched Mobile XL in 2012 as a platform to access content on basic phones. When it didn’t work out he spent “a few years in the desert soul-searching.” He wanted to create apps for African content so that it could both be created and monetized.
“I realized I should be focusing on providing end users with the best content experience and local creators with monetization opportunities. The best content experience was video so the question was how do we get local content creators to make video?” He saw video content as important because of the high levels of illiteracy. By the time he launched in 2017, there were more internet-enabled handsets in the market, particularly smartphones.
But he understood that he had to look at things from the content perspective and try and create a business model that would work in the Sub-Saharan African context:”Things like Instagram, Snapchat and YouTube have been created for the West. There is no way to make money from it in Africa. We need a new model through airtime. I went to my carrier friends and said you have 90% of your subscribers not on data and unless you have relevant video, they won’t want to use data. We aggregate great local content and split the subscription revenues with local content creators.”
He launched with Moov in Cote d’Ivoire:”Africans are crazy about their celebrities and artists. We did deals with musicians and comedians, who already had content on other platforms. Ivorians are passionate about music, artists like Serge Beynaud and DJ Arafat. There’s also an active comedy scene and the comedians agreed to play the game.“ It has attracted hundreds of local content creators to its platform. To get local content it has also secured partnerships with It also has strategic partnerships with Sony and Universal Music:”With Sony in Cote d’Ivoire, we are the second biggest source of income for them.”
From its early success in Cote d’Ivoire it was able to sign up MTN in Cote d’Ivoire, Cameroon and DRC, before signing a group-wide agreement in 2018. Eighteen months ago it signed up Orange in Cameroon and “they watched us grow talent and revenues. Group said we really like the solution and want to roll out in all our markets.” He has rolled out with MTN in Nigeria and South Africa. In the second half of the year, it will roll-out with MTN in Ghana and Rwanda and with Orange in Seegal and Mali:”Then we’ll go to East Africa and in 2023, North Africa and Egypt.”
Currently he has reached (both active and inactive users) 11 million people and has 2.4 million, 30-day active users:”The business model works differently in Africa. Users subscribe for pennies a day.“ The idea is to take lots of very small sums from a lot of people and deliver better incomes to African content creators. It currently has revenues of US$0.5 million a month.
Until recently, they had been pushing daily subscriptions but they have started pushing weekly subscription and according to Kamgaing, these are growing fast:”We are micro-billing daily so you’re never billed for more than US$5 a month. The sweet spot is 3 cents a day. We want it to be 80 cents to a dollar monthly.” The content users access is short-form and data-free.
“The ad revenue model, even in the West, is less interesting than the subscription model. Digital ads will take a while to get big budgets (in Africa), at least 10 years. We believe our model is sustainable for the mass market and feel good about it.”
StarNews Mobile’s growth is relevant to local content creators and traditional broadcasters in two ways: firstly, it will put some money into generating its own original content and secondly, it will be doing deals with traditional broadcasters, helping them monetize unused, archive content.
“We want to help local content producers. We might help with investment and production support. We’ll be creating StarNews Mobile original content. We want to speed up their growth potential. The quality of content could be better if we help them a bit. It’s exclusive content.”
StarNews Mobile has raised money from ‘angel investors’ in California and Europe as well as African SME fund IETP. But the biggest feather in its investment cap has been attracting investment from Snapchat four months ago:”They don’t have a presence in Africa but they have plans for global expansion. Currently it’s all organic. They see Africa as a regional market for the future.”
Vodacom Tanzania and Mdundo have announced a new partnership for the launch of a music bundle available to all Vodacom customers giving them access to Mdundo’s premium service and exclusive curated mixes by Tanzanians DJs. Vodacom’s Head of Value-Added Services, Nguvu Kamando said, “Instead of struggling and moving from one platform to another, we as a digital valuing company, saw the importance of creating one bundle which will include all music genres, that’s why we also decided to partner with Mdundo.com.”
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