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Is There A Market For Video On Demand In Sub-Saharan Africa?

Is There A Market For Video On Demand In Sub-Saharan Africa?

Pirated CDs and DVDs are readily available from street vendors in Africa and they’re much more affordable for most people than full retail-price music and movies.

With the lack of mass-market high speed Internet, is there a viable market for video on demand in sub-Saharan Africa?

In a guest column for BroadbandTVNews, industry expert Philip Haggar said there’s little doubt video on demand will be one of Africa’s exciting business opportunities.

That’s because Africa’s mobile market continues to grow, fixed-line Internet access is improving and low-cost smart devices are flooding the market, he said.

Haggar is a broadcast engineer and streaming video specialist with Broadcast Projects, an international alliance of independent consultants covering all aspects of digital TV and emerging entertainment distribution platforms.

He cited these numbers from Maktar Diop, vice president of the World Bank: Of the 89 million recorded Internet users in Sub-Saharan Africa, half of them are in Nigeria. Two countries (Kenya and Nigeria) account for 62 per cent of Internet users, and both countries already have several film and video platforms, according to .

Kenya’s Buni TV (“Buni” means “innovation” in Swahili) launched in April 2013, and has more than 500,000 viewers.

Iroko TV provides video on demand (VOD) services to consumers in Africa, with more than 5,000 Nollywood films, Haggar said. Iroko just received an $8 million investment from, among others, Kinnevik (owners of MTG/Viasat), to secure content licenses. Iroko has a subscription service, iROKOtv PLUS, which is now generating more revenue than the ads on its basic service.

Mobile Money and Mobile Delivery

Carriers like Liquid Telecom are laying foundations for an international fiber
network (and will be offering their own IPTV service in Narobi, competing with Zuku),
but aspiring VOD providers are also looking to mobile networks, Haggar said. Already Iroko identifies more than 40 percent of its traffic from tablets and mobiles, and offers mobile web and apps for its free and premium services.

Outside of connectivity, other challenges that market entrants can expect to face include competition (from existing broadcast platforms such as the ubiquitous DStv), piracy, regulation, content rights and fees. Payment mechanisms in a region where not everyone has a bank account, are also difficult.

Marrying mobile money services such as M-Pesa and mobile delivery could be key, Haggar said.

“Fixed-line Internet is slow-going around the continent so the answer is to go mobile,” said
Simbarashe Mabashe, CEO of Wabona, a Cape Town start-up focused on South
Africa, Zimbabwe and Tanzania. “Mobile is the VOD infrastructure of choice and I think whoever cracks that wins the game.”

The number of TV households in Africa is a tiny fraction of the population — 24.3 million in Nigeria, 11.5 million in South Africa, 5 million in the DRC and 4.4 million in Kenya. But it’s going to grow significantly by 2050 — the population of Africa is expected to double by then, Haggar said.

VOD services will have to supply huge content to this increased viewership, said Sylvain Béletre, principal analyst at Balancing Act. “There is no doubt that the market is growing.”

In sub-Saharan Africa, video uploads have increased 40 percent year on year. Aggregate views in the region are growing at 90 percent, Haggar said.

International VOD brands such as Netflix will have to bide their time, if South Africa is any indication. South Africa’s Telkom, wanting to sell more xDSL and fibre to the home, has reportedly been in talks with both Netflix and other international media companies, but so far, there has been no visible progress, BroadbandTVNews.