VoD will be a major opportunity for African telecoms operators and investors...now

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At the end of 2012, it seemed like every week Balancing Act was being approached by film and video VoD platforms, either in business or promising to start soon. Some like iROKO and AfricaFilms.tv have built their initial success on diaspora audiences, whilst others have begun to attract attract more local audiences. Last week Buni TV announced it had hit 1 million views, most of which have come from Africa. Balancing Act’s broadcast analyst Sylvain Beletre interviewed Marie Lora-Mungai, Founder and CEO, Buni TV and Enrico Chiesa, President of AfricaFilms.tv (AFTV).

The arrival of LTE will give VoD a new shot in the arm and the number of people streaming content from the large African cities will significantly increase over the next 5 years. The African VoD market is already quite competitive. There are at least 6 major home-grown VoD platforms: AfricaFilms.tv, MeTVAfrica; Wabona; Buni TV; iROKO and DStv Box Office (although largely Hollywood movies). More are promising to enter the market. International brands like iTunes, Deezer and Spotify have begun to arrive and although these are largely music driven, they represent a new level of interest in the continent. Clearly not everyone is going survive even if the market grows quickly.

So it is a smart strategic move that two of these platforms - Buni TV and AfricaFilms.tv (also called AFTV) -have announced that they had entered into a content acquisition partnership. This partnership represents the first consolidation in this dynamic market.

“Our objective is to generate extra revenues for African producers. We have observed that there is now a very promising new generation of African film makers, producing fast, pushing up new talents with high standards. 2012 was for example an excellent year for Senegalese filmakers; Africa is big, the diaspora is complex and it is hard to compete in the VoD space both on the sourcing and distribution sides,” says Enrico Chiesa of AfricaFilms.tv

The deal gives birth to the first African VOD solution to bridge East and West, English and French-speaking Africa. The two platforms will share their catalogues to target both the continental and diaspora audiences, but will continue to operate under their own brands.

"Our partnership opens an unprecedented monetization avenue for African and Caribbean filmmakers,” according to Chiesa. “By working together, AfricaFilms.tv and Buni TV will be able to distribute their content throughout Africa - from Dakar to Nairobi - and the entire diaspora. It's a "sign once, be seen everywhere" plan, with no middlemen taking their cut.”
Kenya-based Buni TV, which recorded an impressive debut with 300,000 unique visitors and more than a million views in just a few months, brings to the table its expertise of reaching African viewers through mobile.

AfricaFilms.tv, out of Dakar, Senegal, focused its efforts so far mainly on diaspora audiences. Historically the first African VOD web-platform (seed-funded by ACP-Cultures+ the ACP Group of states' cultural support program funded by the EU), it boasts a catalogue of about 1,000 premium titles and hours with a robust tracking and anti-fraud encryption system that won high marks from rights owners for its transparency.

The two African platforms also have a strong presence in Western markets, with Buni TV keeping offices in Los Angeles and AfricaFilms.tv in Paris. The newly formed alliance has extended its reach to New York, London and Barcelona.

“AfricaFilms.tv and Buni TV share a deep commitment to bringing the best African content to African audiences, wherever they may be and however they may want to consume it,” said Buni TV CEO Marie Lora-Mungai. “Our strengths are very complementary, and may well lead to future synergies in technology and marketing.”Based on traffic, the AFTV billing system pays rights owners their share on a quarterly basis.

Balancing Act has been tracking changes in the African VoD space
 since 2004. But it has only started to experience significant growth since 2009.

Above: Balancing Act’s broadcast analyst Sylvain Beletre.

YouTube is huge in Africa, right up there with Google, Facebook and Yahoo. The table below tells a lot about the excitment for online video service across the continent in spite of the poor bandwidth availability in many countries: YouTube is in the top 4 of the most dynamic countries.

Countries - Positions of YouTube

Algeria            2
Cameroon       4
Cote d’Ivoire   5
Egypt             3
Ghana            4
Kenya            3
Nigeria           4
Senegal          3
South Africa    3
Sudan             3
Uganda           4

Source: Alexa web site rankings in February 2013.

According to these figures, Egypt, Algeria and South Africa represent the 3 largest countries for YouTube in Africa, together representing 2.5% of the website’s visitors globally (equivalent to Spain’s share).

Marie Lora-Mungai and Enrico Chiesa both believe that "Further improvements in access bandwidth (3G/4G/LTE), access prices and affordable mobile devices – smartphones and tablets - will lead to greater numbers of VoD users in Africa."

"We are seeing a healthy, aggressive competition between Samsung and its competitors across Africa. This should bring mobile device’s prices down pretty soon and increase mobile TV usage. Tablets are in Mauritius for less than USD100; In Senegal Huawei just landed with affordable smartphones and tablets. We are seeing more Africans watching TV and video on their hand-held devices using 3G, Wi-fi and soon 4G/LTE. The other positive factor is the availability of mobile payment across most African countries.” Enrico Chiesa added.

The majority of cable and telco-based television providers in the West and Asia offer both VOD streaming, including pay-per-view and free content but Africa is an exception: except for Zuku Wananchi, DStv MultiChoice and a few others, the large majority of telecoms operators in Africa have not yet invested in VoD services due to the lack of bandwidth or innovation.

The impact on local African telecoms operators is clear: in the years to come they will need to re-engineer their data models and invest in infrastructure to get a share of the paid VoD segment. The business model for VoD is hybrid: free video access paid by advertising, paid videos on a one off transaction or on a subscription-basis, or a mix of both.

The obvious path for telecoms players is to partner with people who know the audiovisual market: the existing VoD platforms and audio-visual content distributors.


Related market report: 

VoD and Africa - A review of existing VoD services, drivers, challenges and opportunities (Dec. 2013) - new market report from Balancing Act.


Video briefings on this topic:

In English:
African audiovisual market: trends in 2012 and strategy in 2013 - by Enrico Chiesa - Africafilms.dv

In French:
Marché audio-visuel en Afrique: tendances 2012 et projets d' Africafilms.tv en 2013

Chike Maduegbuna on Afrinolly, a curated film and music mobile platform that helps mobile users find the films and music videos they want

Also videos with Africa’s music platforms:

Jesse Oguntimehin on the beta phase launch of African mobile music platform Spinlet

Yoel Kenan, Africori (B2B platform) on the African music market, local talent, killing choruses and mobile digital platform

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