INDUSTRIES

Industries

ABOUT

Among the 215 million households of the region, around 102 million have access to television.
TV penetration in Sub-Saharan Africa is at 42%.
Television, radio and mobile mediums have near-universal penetration in Sub-Saharan Africa.

Broadcast Media

Historically, Africa has been a continent that has had its images shaped externally. The perception of Africa as “the Dark Continent” and a land ravaged by epidemics, war, strife, hunger, poverty, natural catastrophes, and disease has been fairly consistently put forth by media sources from outside the continent. These dated images of the continent have been perpetuated and spread to all corners of the world by strong globally positioned media channels.

Since the adoption and promotion of the African Union’s “New Partnership for Africa’s Development” (NEPAD) when it was launched in 2003, this perception has changed to some degree. There is a growing recognition amongst Africa’s political and corporate leadership that Africa needs to be able to tell its own story and establish its image on the continent and globally. There is a growing need to put a positive face on news coming from the continent. This realization has helped fuel an explosion of activity in Africa in the broadcast media industry.

The two primary challenges of broadcast networks in Africa today are the expense of premium programming content and selling advertising space, which at times is best done by pushing some marketing decisions down to local and regional offices. Free-to-Air networks that generate low revenue have a low advertising-to-sale ratio making it difficult to procure programming that would be attractive to each advertiser.

The legacy of the early free-to-air and sometimes paid networks paved the way for the formation of several private television stations to launch. Today the African television market is primarily divided between English speaking (or Anglophone Africa) and French-speaking (or Francophone Africa).

The main markets in Africa for television are South Africa with about 5.8 million households with television sets (2016); Nigeria with 10.3 million households with television sets (2018); Cote d”Ivoire with 1.5 million households with television sets (2018); and Kenya 1.4 million households with television sets (2018).

The South African Broadcasting Corporation fuels what is arguably Africa’s largest content source for television programming. A US billion-dollar corporation, SABC offers three channels and the continents’ only pan-African news channel, SABC News. Other key national television broadcasters include the Nigerian Broadcast Corporation, the Kenyan Broadcast Corporation, and the Egyptian Radio and Television Union (ERTU). ERTU was able to establish the continent’s first locally geostationary satellite Nile site.

Today, there are two main pan-African focused networks in Africa, South Africa’s pay television channel bouquet, Multichoice (Dstv), and the French government-owned free-to-air Canal France International.

Multichoice is by far Africa’s largest privately-owned media group, which was founded as a publishing house in 1915. The African business is operated through Multichoice Africa (Propriety) Limited and Multichoice Subscriber Management Services (Propriety) Limited (collectively “Multichoice South Africa”), and Multichoice Africa Limited (“Multichoice Africa”), each an indirect wholly-owned subsidiary of Naspers Limited.

Multichoice provides pay television and subscriber management services in 48 countries throughout Africa and the adjacent Indian Ocean islands. The group has ownership interests through Multichoice South Africa and Multichoice Africa in subsidiaries and joint ventures operating in Kenya, Ghana, Uganda, Nigeria, Tanzania, Mozambique, Zambia, Namibia, and Botswana.   In many other African countries, Multichoice operates through agents or franchisees.

The agents and franchisees conduct marketing and advertising activities to build Multichoice Africa’s subscriber base and collect subscription revenues on behalf of Multichoice Africa. They retain a portion of the subscription revenues they collect as compensation for their services and remit the balances to Multichoice.

The pay- television service consists of terrestrial analog networks as well as direct-to-home digital satellite television (“DStv”) bouquets on three separate satellites: Eutelsat W4 KU-band, PAS 10C-band, and PAS 7 KU-band.

Multichoice Africa’s analog features various bouquets that transmit a customized M-Net and SuperSport channels, offering exclusive movies, tv shows, and sports. Multichoice Africa uses Irdeto Access encryption and set-top box technology for both its analog and digital platforms. The company delivers analog and digital services terrestrially to Sub-Saharan Africa. This is done by transmitting its programming signal by satellite to local receiving stations in countries.

Established in May 1989 by the French government, Canal France International (CFI) was created to serve as a programme repository for emerging markets-specifically national channels in Africa, the Maghreb, the Middle East, Haiti, Central, and East Asia. In the mid-1990s, CFI regionalized programming for Africa under the banner CFI Pro Afrique. CFI Pro Afrique provides its partners with 80% free programmes (primarily French-language content although some African productions are broadcast in French and English) and daily news in French (and some English), 20% of the programming is offered on a barter system. On average CFI offers 237 hours of programming per month.

Through its partnership agreements, CFI Pro Afrique provides daily programmes from Paris, France from its digital control room via an Intelsat Satellite, a New Skies Satellite and a Eutelsat satellite accompanied with the CFI-Tanderberg decoder, a standard TT1200, or a Humax F1VACI semiprofessional decoder with a Viaccess module.

A key partner in Africa of CFI is Senegal based, Pan-African Union of National Radio and Television Organizations of Africa (URTNA). The Union established a non-commercial television programme exchange service, whose primary success has been in the area of live transmission by satellite of international sporting events, often brokered by CFI, in the 1980s and 1990s. Among Francophone broadcasters, URTNA has also had success in promoting the exchange of documentaries, music programmes and sport-related programmes.

In the early 2000s, two new digital television platforms were launched in Nigeria to compete with DStv. These are Frontage Satellite TV (FSTV) and the other TrendTV. Since 2010, new competitors have emerged as competition for DStv, these include Netflix, Open View HD, Amazon Prime, Youtube, StarSat, Startimes tv and until recently Kwese TV. It is estimated that Africa will have 47 million pay-tv subscribers by 2025[1].

On the continent Pay-DTT (direct terrestrial television) overtook DTH (direct-to-home) in terms of subscribers in 2012, becoming the leading multi-channel platform, as the service is positioned as a more affordable alternative to DTH with the lowest ARPU (Average Revenue Per User) among all multi-channel platforms, estimated at $6.39 in 2017. At the end-2017, Kagan, a research group within S&P Global Market Intelligence, estimated 60% of Nigeria’s TV homes subscribed to pay DTT services, while DTH had a 34.8% share, with the remainder attributable to fixed wireless services. Growing at an 8.6% CAGR through 2027, pay DTT is projected to remain the leading multi-channel platform with a 61% market share in 2027. DTH is the most lucrative multichannel platform accounting for nearly 60% of the market’s total multichannel revenues in 2017. Pay-DTT follows, despite being the largest by subscribers, accounting for 34.8% of the total video service revenue.

Although ARPUs are much lower than in South Africa, leading to lower revenues, Nigeria may increasingly be an investment focus for operators due to its size (22% of all African TV Households are in Nigeria), low TV household penetration, and its rapidly growing middle-class segment that has disposable income for entertainment services.

At end-2017, Kagan estimated that Nigeria’s multi-channel market had over 27 million TV households and almost 7 million pay-tv subscribers, equating to a 9% year-over-year increase. Household penetration, however, remains low reaching nearly 26% in 2017 (compared to over 50% in South Africa), while multi-channel revenues equalled $835 million, translating into a monthly ARPU of $10.45. Nigeria’s multi-channel market is projected to add 8.7 million subscribers reaching close to 16 million by 2027, equating to an 8.4% CAGR. TV household penetration is projected to reach 39% in 10 years, while multi-channel revenues are modelled to reach $2 billion by 2027 remaining behind South Africa.

[1] https://www.telecompaper.com/news/africa-to-have-47-mln-pay-tv-subscribers-by-2025-study–1322258

RELATED INDUSTRIES

LEADERS

 

INDUSTRY LEADERS

In addition to having 3 state-owned broadcasters, South Africa has Africa’s top media company, Naspers. With a capitalization of $104 Billion, Naspers owns broadcast media houses throughout Africa. In addition to a State-owned broadcaster, Kenya has six large private corporations with television and radio stations. Kenya also has over 100 corporate and non-profit stations broadcasting throughout the country. In Egypt, 6 state-run TV, 30 state-owned radio stations, and 8 privately held stations comprise the country’s broadcasting industry.

South Africa

Kenya

old-Egypt