Africa’s pay-TV wars

Local content and lower subscription rates create a competitive market

Kampala, Uganda | CONRAD ONYANGO | Africa’s pay television industry is projected to add 16 million new viewers over the next five years as top players step up the battle for compelling and affordable local content.

Between 2022 and 2028, the continent’s pay-TV subscribers are projected to rise by 38% to 57 million, according to a new report by research firm, Digital TV research.

Revenue growth, however, will be much lower.

Pay-TV revenues on the continent are forecast to reach US$6.44 billion by 2028, up by 29 per cent from US$4.99 billion in 2022, signalling that consumers are likely to benefit from falling monthly subscription rates.

South African Pan-African pay-TV giant MultiChoice (with 21 million viewers), China’s StarTimes (19 million) and France’s Canal+ (11 million) account for 89 per cent of all Africa’s pay-TV subscribers and are tipped to lead the fight for viewer numbers.

The market is also unlikely to see any new major entries.

“No new major players will start. Instead, these three operators will battle for supremacy – often by cutting prices,” said Principal Analyst at Digital TV Research, Simon Murray.

MultiChoice, in half-year results released November 2022, showed that its linear pay-TV subscriber base – measured on a 90-day active basis – rose by 1.0m (5%) to reach 22.1m viewers on the back of aggressive investment in local content production.

In 2022, the operator added two local channels and increased annual hours of local content in its library by 15 per cent to 73,000 hours. MultiChoice’s new local offering includes a new season of Big Brother Naija in Nigeria and two co-productions (Blood Psalms and Girl, Taken) in South Africa, with more in the pipeline.

“The group is currently producing the epic original drama series, Shaka Ilembe, which will be broadcast during 2023 and is already receiving significant international interest,” said MultiChoice in a statement.

Last year it also rolled out regional adaptations of popular telenovelas. For example, 1Magic’s The River was adapted for Kenya (as Kina) and Angola (O Rio). It said another seven local productions are in the pipeline.

In South Africa, MultiChoice has 9.1 million subscribers, with the rest of Africa sharing the remaining 13 million viewers.

StarTimes has also pushed local programming, with a commitment to collaborate with local content owners and producers across the continent, focusing mostly on the Kenya and Nigeria markets.

In December, it launched a 100-episode drama series, KIU, on its local content channel Rembo TV. Rembo, with a footprint that covers Kenya, Tanzania and Uganda, has a language policy requiring 60% of content to be in Kiswahili, 30% in English and 10% in vernacular languages.

“It is our commitment to continue supporting Kenya’s creative industry through commissioning more original productions as we seek to enrich our subscriber’s television viewing experience,” said StarTimes Chief Executive Officer Hanson Wang.

KIU production adds to StarTimes’ growing array of exclusive local content production and is advertised as featuring Kenya’s top casts, directors and scripts. Other exclusive programmes launched by StarTimes in 2022 include Kupatana and NIA.

The Canal+ strategy to boost local content has been through aggressive acquisition of major local film production studios and co-production agreements – or raising ownership stakes, including with its closest rival, MultiChoice.

In August 2022, Canal+ completed the acquisition of Rwanda’s first digital streaming platform, ZACU TV, culminating in the launch of a channel that airs 100% Kinyarwanda content. The French operator also bought out Nigeria’s most famous Nollywood movies producer Rok Studios, in 2019 and, from 2020, has been upping its shares at MultiChoice in tranches-growing it to a current 26%.

Industry analysts reckon operators will prioritise innovative ways of meeting dynamic viewer demands – simplicity, flexibility, customization, and convenience – to attract more eyeballs.

Secretary General of the Consumer Federation of Kenya, Stephen Mutoro, told bird in an interview that content, ease of access and affordability would drive more subscriptions.

“Competition would be welcome. It’s not really competitive now. But content is king. MultiChoice enjoys the edge on exclusive popular content like EPL football. But then there are other consumers who enjoy non-football content offered by StarTimes and others,” said Mutoro.

These sentiments are also shared by analysts at Oxford Economics and Accenture in their joint survey covering Africa, which highlights local programming as a key differentiator in the industry across the globe.

“Research from Oxford Economics and Accenture finds that consumers value personalization and simplicity in their media experiences – and companies that innovate along these lines should emerge as winners,” said Oxford Economics Senior Research Manager, Thought Leadership, Sundus Alfi.

Pay-TV providers are not the only pan-Africa operators following these guidelines, however. Nascent video streaming services on the continent are tightening the competition for subscriber viewer numbers.

Dataxis, a global business intelligence and media company, projects that Africa’s video streaming market will have more than 15 million subscribers by 2026.

As in pay-TV, MultiChoice-run Showmax commands the largest number of African subscribers, at close to 2 million, followed closely by international player Netflix, with 1.5 million users. These players, too, are investing significantly in local content production.

The resulting stiff competition is expected to enhance the quality and exclusivity of content as well as tariff structures, to the benefit of viewers – with Mutoro singling out pay-TV players as having the upper edge on both access and reliability, over streaming counterparts.

“Pay-TV platforms use gadgets with reliable power supply. Streaming use narrow screens, such as phones, that are susceptible to running out of power. In the peri-urban and rural areas, access to streaming is impossible, over unreliable and expensive data bundles,” Mutoro explained.

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Source: Bird, story agency