Pay-TV ready for blast-off
AFRICAN TELEVISION: Regulatory changes and rising incomes across Africa look set to allow new entrants to begin tapping the continent's under-served pay-TV market. Ed Waller reports.
This is according to a recent study titled Pay-TV in Africa and the Middle East: Early-Stage Market Prepares for Expansion, from Pyramid Research. It was published this month to coincide with both the Discop Africa programme market last week in Senegal and the Cabsat Middle East/North Africa event that kicks off today in Dubai. Due to rising incomes and greater competition, says the report, the pay-TV market in Africa and the Middle East will enjoy the world's highest growth rate over the next five years, with subscriptions predicted to increase at a compound annual growth rate (CAGR) of 13% and total regional pay-TV revenues to almost double from 2008 levels by the end of 2013.
"Due to limited competition, the difficulty of obtaining content and the lack of an affordable mobile pay-TV platform, pay-TV markets in Africa and the Middle East are currently dominated by a small number of direct-to-home (DTH) operators," says Dearbhla McHenry, EMEA senior analyst at Pyramid Research and author of the report. The outlook, however, has recently become more encouraging, she continues. Growth will accelerate "significantly," as regulatory changes and rising incomes allow new pay-TV entrants to begin tapping the region's "very under-penetrated" pay-TV markets.
"Over the next five years, we expect these positive changes in the market environment to improve pay-TV subscription adoption rates in the region, leading to an overall CAGR of 13% through 2013 and a total of 27.5 million subscriptions by year-end 2013," says McHenry. "Although infrastructure shortcomings and limited content availability will continue to affect growth in the short term, we expect total regional pay-TV revenue to reach US$8bn by 2013, almost double 2008 levels."
She also points to changes in the regulation of broadcasters and media services, in that regulators in the region are increasingly choosing to award universal licences rather than sector-specific ones. This is a trend that makes it possible for mobile or new fixed-line telephone operators to consider adding pay-TV services to their existing offerings. Not all converged networks will translate directly into IPTV potential; however, nationwide IPTV-ready fibre networks are being planned in more wealthy markets, while operators in less wealthy ones are considering deploying fibre in at least the better-off areas of major cities to enable triple-play bundles.
These are interesting figures, and ones that stand out in a climate of caution and pessimism. The study goes some way towards supporting comments made by Discop Africa general manager Patrick Jucaud on the eve of the Senegal event: "The various digital platforms have all lowered their subscription rates dramatically, so high-quality TV is more accessible to African viewers."
This list of pay-TV providers in Africa is steadily increasing, and includes HiTV in Nigeria and Kenya, DSTV in South Africa, Canal Plus/Canal Horizon in Francophone West Africa, and TV Cabo in the Lusophone markets of Angola and Mozambique. It's in these latter two markets that Fox International Channels (FIC) last week debuted three of its channels: Fox, Fox Life and Fox Crime. The channels are now carried on DSTV's Bué package in those markets.
Jesús Perezagua, president of Fox Channels Europe, described the two Portuguese-speaking African territories as having "a lot of potential in the middle of an expansion time." This sentiment was echoed by Elben Greyling, president of DSTV parent MultiChoice Africa: "The Portuguese-speaking markets are expanding very quickly."
And since then another global pay-TV player has moved further into Africa. Six months after launching a dedicated 24/7 Nickelodeon channel to more than 1.5 million subscribers across southern Africa, MTV Networks International (MTVNI), has expanded the children's brand across multiple media platforms. The Viacom division will launch an English-language Nickelodeon Africa website will launch later this month, while a Nickelodeon mobile TV channel has launched via the Vodacom network in Nigeria, South Africa and Tanzania, featuring a range of Nickelodeon's shows, updated on a weekly basis.
Furthermore, Southern African licensing agency Character Licensing & Marketing is now working with MTVNI to roll out consumer product licensing programmes for brands SpongeBob SquarePants and Dora the Explorer in 2009. "I have no doubt that Nickelodeon Africa will become the standout go-to destination for African kids of all ages, both on and off-air," said Alex Okosi, senior VP and MD of MTV Networks Africa.
It seems that international pay-TV channels aren't phased by the liquidation of London-based African low-cost pay-TV platform GTV last month. As well as its own financial woes, the demise of that football-laden service was blamed on the fact that football alone wasn't enough to persuade subscribers to MultiChoice's DSTV service to swap services, particularly given the content DSTV offers to other family members.
The service also reportedly suffered set-top box supply issues early on, and these factors, combined with the overall economic slowdown, left GTV's backers unwilling to put more cash into the venture. The company's backers included Swedish group Kinnevik, Citigroup, Noonday Global Management and Avenue Investment Management. Kinnevik-backed Modern Times Group went on to launch Viasat 1, a new free-to-air channel in Ghana. It's apparent views on the potential for African pay-TV, however, are not shared by many others in the industry.
| Produced in association with NATPE's DISCOP AFRICA |  |
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