Kathy Gibson reports from AfricaCom, Cape Town – Around the world, video is taking off. While Africa may be behind this particular curve, video on demand is set to be an important network driver in the near future.
Analysts believe that, in the next five years, video will be the biggest single application running on the mobile networks, and Africa is already joining the trend.
Sylvain Beletre, principle analyst at Balancing Act, points out that the population in Africa is expected to double by 2050, with young people making up the vast majority.
This new generation of users is following different entertainment trends, he says. “On the consumer side, a key driver is that people want to watch video anywhere, any time and on any device.”
Also driving a change in behaviour is the advent of the “me generation” where people wish to talk about themselves.
“Another thing to consider is the explosion of television channels in Africa,” he says. Although many African countries currently have just two or three analogue channels, the advent of digital terrestrial television (DTT) will mean a huge need for more content, specifically local content.
The number of television households is currently only a fraction of the population, with 24,3-million in Nigeria, 11,5-million in South Africa, 5-million in the DRC and 4,4-million in Kenya.
All of these factors point to the mobile device becoming the entertainment device of choice, Beletre says, while video on demand (VoD) also has a number of benefits for content producers.
“The distribution of African films has many challenges and it is not always easy to get them into mainstream cinema. Which is why VoD is a major opportunity.”
Some of the drivers include limited access to film distribution, a need for more revenue, reaching out to the African diaspora, getting in on the ground floor of VoD demand, sidestepping content pirates and being able to analyse audience needs.
The user benefits from VoD as well, as it is more affordable than traditional television, payment mechanisms should be easy, there is unlimited access, anywhere and anytime, a variety of content, and quality content with no piracy. In addition, instantaneous access with full security should also be assured.
For telecommunications operators, VoD is an opportunity to offer additional services to subscribers, Beletre says.
Benefits for telcos include finding new market segments and provided value-added services to avoid being simply a dumb pipe.
It will help telcos to attract and keep clients, leading to more subscriptions and increased ARPU (average revenue per users). It can also help to reduce churn.
As the VoD market grows, telcos will be well position, they have the opportunity to increase mobile payment usage, get to know their customers better and improve their branding.
Telcos have a role to play in developing local media and creative industries as well, Beletre says, fulfilling the demand for local content and leveraging their distribution networks and access to customers to offer more services.
There are a number of VoD players already operating on the African continent, Beletre points out.
YouTube in Africa is among the top most visited sites in Africa. It has a particularly strong presence in South Africa, with more than 700-million views on the local channels.
DStv currently offers two VoD services for catch up and film on demand. iRoko TV offers both free and paid VoD in Nigeria, Buni TV has free content, and Africafilms TV has paid VoD in West Africa.
Overall, there are more than 30 VoD platforms related to Africa, ranging from telecoms service providers and device vendors to broadcasters and content aggregators.
There is no doubt that the market is growing, Beletre says. In sub-Saharan Africa video uploads have increased 40% year on year, and aggregate views in the region growing 90%.
Some of the challenges that market entrants can expect to face include legal competition, piracy, regulation, content, rights fees and rights overall.
“However there is a plenty of opportunity to set up partnerships in the region,” Beletre says.