[AfrICANN-discuss] [***SPAM***] African Online Content and Services Come of Age

[Anne-Rachel Inné]

http://www.balancingact-africa.com/news/en/issue-no-570/top-story/african-online-conte/en

 African online content and services come of age – business models, users
and delivery platforms begin to crystallize
 Issue no 570 2nd September
2011<http://www.balancingact-africa.com/news/en/issue-no-570>

Last week’s Mobile Entertainment World in Cape Town began to crystallize the
beginning of successful, business-worthy African online content. It bought
together a handful of mobile operators, mobile platform operators and
content companies offering things as diverse as music, gaming and Nollywood.
Russell Southwood picks over the lessons from this emerging content market.

It’s a hazard of doing what we do that we attend (and sometimes even
programme) conferences. The standard pattern is that everyone senior turns
up for the first half day to network and by the end of the conference you’re
left with a handful of people listening to ever-less compelling
presentations. Speakers make seemingly endless speeches promoting whatever
it is they’re selling to audiences in low-lit rooms at too greater length.
Interaction comes down to a couple of questions at each session.

Hats off to Matthew Dawes of All Amber who manages to combine really
interesting programmes with entertaining panelists who actually say things
that might make you think about what you do with your business. At last
week’s event, many of them were very funny about the failures they endured
along the way and some were even honest enough to say that they hadn’t
entirely worked out how to make money out of something (for example, mobile
TV). And the real test was that on day 2 there were as many participants as
there were on day one. Furthermore, it was a conference in South Africa that
managed to talk about Africa rather than just about South Africa.

The first Mobile Entertainment World conference in Cape Town last week
bought together all of the people who need to be doing business together if
there is to be an online content and services sector in Africa: media
owners; mobile platform operators; services and social networking sites;
gaming companies; and….well, there were two mobile companies, more of which,
later. There was even the less attractive side of the industry represented
by an adult chat service.

Out of this interesting mixture of people came the first sight of a content
industry that might both command an audience and get paid for doing it. The
stand-out amongst all of these was Nigeria’s Iroko Partners (see video
interview link below). It has hit upon a way of distributing Nollywood
content legally (over 800 movies), making money and giving some of that
money back to the artists who made it. In under a year it has generated
around US$1 million in advertising revenues from 2.2 million views and is
now expanding into offering music video clips on the same basis.

It has attracted 2.2 million unique viewers and 16 million views from 231
countries and all without any marketing. 20% of traffic is from mobiles and
60% of search enquiries come from mobiles in Nigeria. The really telling
statistic is that the 6th biggest market is Malaysia and 11th biggest is
Nigeria (around 30,000 unique views). With better bandwidth, viewer numbers
will inevitably increase in the home of Nollywood.

94% of the advertising income comes from 5 countries with the big markets
including USA, UK and Canada. Almost all of these views (even in Malaysia)
are from the widely distributed Nigerian diaspora. The biggest movie is
Blackberry Babes which is a 60 minute movie that has had 900,000 views:
“Blackberry didn’t even know it had been made.”

Njoku noticed that there were a lot of e-mails asking for Genevieve Nnaji
movies. She is now so famous that she is only makes a couple of films a
year. So he put out a call to producers and directors for Nnaji movies.
Within a week, he was running a season of movies with two new movies a day,
which was very successful:”Only the Internet could have that kind of
immediacy.”

His next project is expanding into Nigerian music video clips:”The music
entertainment space in Nigeria is an absolute mess. One song can be uploaded
as many as 20 times. Music sales cannot be verified. We can do that on You
Tube (with views). We can tap into a global audience and give money back to
the artists. He has signed 40 artists (so far including  El Dee, Kefee, P
Square and Bez) and has plans to sign 100 more.

According to Ayite Gaba, Business Development, Google who is responsible for
developing You Tube partners in Sub-Saharan Africa, the advertising income
paid to African partners varies between US$10,000-US$1 million:”Views and
revenues are largely coming from outside Africa at the moment and we have no
sales offices (for You Tube) in Africa at the moment.”

However, those that want to prepare themselves for the future (let’s call
that the next three years) need to start positioning themselves now. If we
use Facebook as proxy for Internet users in Nigeria, only 30,000 of 2.9
million people currently view movies on Iroko but within the next 1-3 years
bandwidth will improve to the point where the numbers will go up to at least
a million. With better 3G and LTE not far off, many of those will view music
clips on their mobile phones (feature and smart).

But there were other interesting green shoots offering new ways of
connecting with audiences:
*
*    Julian Van Plato, CEO, Trans Digital Media* was live streaming the
conference content both to PCs and mobiles. An event with around 150 people
– a small number of whom were tweeting- soon attracted 700 streams for what
was a fairly specialist subject. For a relatively small sum it can live
stream to 95% of mobile phones (and VOD if required) but better still, it
can deliver this stream into a large number of Sub-Saharan African
countries. It is currently working on sports events, music and comedy club
nights and has signed a deal with Congolese music star Fally Ipupa who
currently gets 300,000-1.5 million hits for his music videos. Interestingly,
he sees himself as potentially competing with television. The business
model? Sponsorship or charging for large, well-promoted events.

**    Emma Kaye, CEO, Bozza *hit on the idea of training people in
Khayelitsha township to make movies using a Nokia N8 with an HD camera. She
showed a variety of clips including one about the consequences of a rape,
the daily train commute, mobile TV news and a cooking programme. The latter
was not for the faint-hearted as a sheep’s head was cleaned up with a
blowtorch and cooked split in half, braai-style. In the pilot phase of what
Kaye describes as a “mobihood”, it attracted 40,000 subscribers in three
months and 170,000 by the end of the pilot period with just word of mouth.
So what? Well it goes to show that there are large numbers of Africans
(formerly known as viewers) out there who do not see their lives reflected
in the more mainstream media.

**    A number of people spoke about IVR radio including Starfish Mobile.* The
phone owner dials in to a short code and is offered a menu of musical
genres. S/he chooses a genre and then chooses a track and gets to hear 90
seconds before being asked to pay. The service is already being offered by
Vodacom Tanzania and in the “you do it, I do it:dog eat dog world”, MTN is
about to follow suit with others trailing behind. Many handsets already have
built in radios (and some Free-To-Air analogue TV receivers) that local
radio stations need to include as part of their strategy to get listeners.
*
*    Vincent Maher, Co-Founder, Motribe and Gavin Marshall, Head of
Innovation, MXit,* spoke about trying to understand what audiences wanted in
terms of specialist social communities and gaming. The former produces
social networking sites globally with names like Moonbase (320,000 users)
and Cabango (280,000 users) and has 3,500 tribes with 1.6 million users.
Interestingly, South Africa is only its 8th biggest market with 75,000 users
but it’s big in Nigeria where it does work for Guinness.

African mobile operators at local opco level are inclined to say that local
content is not out there and when it is, the owners are difficult to deal
with. Translation: We don’t really understand the content market on our
doorstep and the income splits we’re offering do not encourage things that
attract major audiences on other media. The key players in this new African
content ecology are the continent’s film-makers, broadcasters, gamers, music
stars, local niche social communities and local niche content producers
(think hundreds of thousands rather than millions).

The most successful existing local African online content is newspapers. The
sites of print newspapers are up in the top 20 of all the African countries
covered by Alexa.com. However, one East African newspaper gets 30,000 print
readers but 2 million local online users. Even if you assume optimistically
that 10 people read each paid copy, the online version still outstrips the
print version. A relatively small number of people pay for the print version
and it attracts 97% of the advertising revenues. This cannot last as
advertisers wake up to the shift that is underway. Meanwhile few media
owners have yet begun to craft a strategy to help them survive this
transition.

But as Mark Rayner, CEO, DStv Mobile observed that the upward suck of
bandwidth required to use this content will continue to grow:”LTE will come
and make the lives of content owners vastly different. But the new bandwidth
will bring more demands like HD. So we will still need to be fighting for
bandwidth and fighting for it at the right price.” Mobile operators have
networks that started as narrow pipes but the future is content and services
that require an ever increasing capacity for data. Rayner explained that its
3G live feed of the British Royal wedding crashed because too many people
accessed it at once. Mobile operators have to provision a network where this
does not occur if they are serious about a content-rich future.

And they will also have to do something about the revenue splits. At present
one operator is offering 80/20 in its favour: this is no way breed a local
content ecosystem. Furthermore, the complicated chain of people who take
percentages mean that the current minimum price possible is probably higher
than is affordable by a mass audience. And in this the mobile operators are
not the only guilty party. Music and film rights holders (particularly
international ones) do not understand that what they are demanding will cut
off the development of the market before it starts. (Puts me in mind of a
Spike Lee aphorism:”A US$50 million Hollywood movie is a US$10 million movie
once everybody got through stealing.”)

But what do you do about the mobile operators who don’t seem to care about
the very content on which their future revenues hang? I’ve attended three of
Matthew Dawes conferences and the number of mobile operators attending can
be counted on the fingers of one hand. Sadly the VAS Managers are not at
senior management level in the country opco’s. There are some exceptional
VAS managers but they are in the minority. There are endless millions in
investment for network but more or less nothing for content development.

In content terms, mobile operators have to decide whether to stick or twist:
they can do either but they should choose decisively rather than saying our
indecision is final. The ghost haunting this discussion is that the vastly
over-charged SMS service revenues will be eaten at the edges by cheaper
services used in the data bundle.(Note the Skype acquisition of GroupMe.)

The “get into content” route is the setting up of an opco that lives on its
own revenues in which you invest real money that removes the SMS aggregator
from an already over-crowded value chain. The “stay-out of content” route is
to give better revenue splits and encourage the take-up of local content.
There’s nothing wring with being “dumb-pipe” operators if you make a decent
return and perhaps someone should make the T-shirt that says so. Build
decent networks and get paid for doing so.

The problem is the testosterone-driven, “masters of the universe” view that
Africa’s mobile operators should go round eating everyone else’s lunch on
the precautionary principle that someone might eat theirs in the near
future. But who else in Africa is going to build properly functioning
networks and charge for them?
------------------------------
*
New video clips on Balancing Act’s You Tube Channel:*

Jason Njoku, CEO, Iroko Partners
<http://www.youtube.com/user/BalancingActAfrica#p/u/6/IlFganlMGSo>on
distributing Nollywood and Nigerian Music using You Tube

Emma Kaye, CEO, Bozza
<http://www.youtube.com/user/BalancingActAfrica#p/u/8/wKaNUJAuGp0>on
South African townships creating their own online content

Julian VanPlato, CEO, Trans Digital
Media<http://www.youtube.com/user/BalancingActAfrica#p/u/10/G8YaHtalmP4>
on
a new live streaming mobile service for Africa

Sami Leino, COO,
Spinlet<http://www.youtube.com/user/BalancingActAfrica#p/u/12/Zjx8TNyuldc>
on
the launch of an "iTunes" for Africa

Ofer Ronen, Business Development Director - Broadcast, Gilat Satcom
<http://www.youtube.com/user/BalancingActAfrica#p/u/19/AyBayLZESaw>on
its move into African broadcast services

South Africa: Styli Charalambous, Managing Director, The Daily
Maverick<http://www.youtube.com/user/BalancingActAfrica#p/u/20/sdAQbc6dZSM>
on
its new iPad subscription service

Steve Vosloo, mLabs<http://www.youtube.com/user/BalancingActAfrica#p/u/9/3JLD-ssdfvQ>
on
supporting mobile innovation in South Africa

Arun Nagar, CEO, Spice VAS Africa
<http://www.youtube.com/user/BalancingActAfrica#p/u/11/VSJC8fpM38s>on
launching its African platforms and live streaming

Robert Aouad, CEO Isocel
Benin<http://www.youtube.com/user/BalancingActAfrica#p/u/14/c-g9naKweso>
on
opening a carrier-neutral data centre in Benin

Balancing Act's Twitter feed provides a combination of breaking news for
telecoms, Internet and broadcast in Africa, direct tweets from countries
visited and access to the occasional rumours circulating. You can follow us
on:
@BalancingActAfr
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