A few weeks ago I posted a thought-piece on LinkedIn and Knect365 about the mobile future of video. Now, writes Divitel's Hendrik Haandrikman, I'd like to explore some reasons why Africa might be of particular interest for that mobile video future.
1. Africa is 'The Mobile Continent'
Africa counts a staggering 1.13 billion mobile subscriptions. This currently makes it the world's second largest continent in terms of mobile subscriptions, second only to Asia. The mobile penetration rate was just approaching 50 percent in 2010 and is now expected to pass 100 percent in 2021.
(Image courtesy of The Ghanaian Times)
What makes Africa different then other big mobile markets, is that Africa is truly 'mobile first' and often even 'mobile only'. Even in remote regions where electricity isn't particularly reliable or even present, mobile phones can be found. As such, mobile phones form the first - and sometimes only - contact many Africans have with the internet. This means that in some case, phones aren't just an option to consume video content - they're literally the only option, even with the growth of satellite TV in countries like Nigeria and Ghana. With 84% of broadband in Africa accessed via smartphones and tablets, mobile devices are the logical place to present Africans with video.
PS. A recent example of just how important mobile internet is for the population of many African nations can be seen in Zimbabwe. Here the government enforced new mobile data floor pricing only to reverse it days later after massive public outcry.
2. Real-Time Entertainment Consumption is Growing at Breakneck Speed
In a recent paper by Sandvine, the network policy control company found that real-time entertainment (both video and audio) made up 18,1% of mobile downstream internet traffic in Africa in 2015. This is notably less than it is in other regions, where it's usually the dominant category. At the same time, it's up from 8,6% just a short year ago. This staggering growth from 8,6 to 18,1% in the span of a single year is probably just a precursor. More users are expected to move from feature phones to smartphones and network speeds will greatly increase as telco's go from 2G/3G to LTE.
Above, we're only looking at the share of mobile data used by real-time media. While that share grows, the total amount of mobile data grows as well. According to Ericsson's Mobility Report of November of 2016, the amount of mobile data used in Africa will experience a twelvefold increase in the coming 5 years.
3. Young People Love Mobile Video: Africa is a Continent of Young People
(Image by Animoto)
In Sub-Saharan Africa, 57 percent of the population is below 15 years old. This new generation is much more likely to see mobile devices as their first screen of preference for consuming video content. According to Nielsen's Global Digital Landscape Report, mobile video participation rates for generation Z (15-20) and millennials (21-34) eclipsed those for any other generation. As a continent of young people that has a strong mobile culture to begin with, Africa is poised to be among the first regions where mobile video consumption eclipses every other form of video viewing.
4. Africans are willing to pay for entertainment
According to a recent report by eMarketer, North-Americans are currently still the only ones that are more likely to pay for cable TV than for VOD services. At the same time, another report by the same firm suggests that North-Africans are overwhelmingly prepared to pay for digital video content. Even though there are definite societal and economical differences between most North-African and Sub-Saharan nations, it's relatively safe to assume that - given the opportunity - most Africans would agree.
5. They're Still Lacking Many Local Powerhouses
When looking at the dominant streaming apps in different countries, the picture painted is usually the same: YouTube, Netflix and - in some cases - Amazon make up the only global brands in a field filled with multiple local content creators, broadcasters, telco's and cable operators that all offer their own VOD or live streaming platforms. Most African nations currently seem to have a shortage of these local alternatives. Notable exception is iROKOtv - a 6-million subscriber movie streaming service with thousands of Nollywood films - but even there users struggle to find the functionality they can find in global alternatives. As a side-note, iROKO does offer offline viewing, which will be must-have functionality for any possible competitor.
For big African telco's like South-Africa's MTN or Ethiopia's Ethio Telecom this looks like a golden opportunity. As they hardly face competition of the cable operators that we view as traditional for the video market in the rest of the world, a well-funded and technically sound mobile VOD and live TV platform could turn out to be a winner-takes-all proposition. That this opportunity hasn't escaped the attention of some of the global tech powerhouses is clear when looking at NuVu. This collaboration between Ericsson and Nigerian telco Airtel was supposed to fill the gap left by other telecom providers, but has failed to get significant traction. It has yet to move beyond Nigeria, isn't available through other providers and is only available on Android. Personally, I suspect this to be an issue of a non-African company trying to jump into an opportunity uniquely tailored to be filled by one of Africa's own.
For the short term, the necessary investment in technology will be a barrier preventing African companies without the telco's deep coffers to enter the space. As time goes by and the tech necessary to offer competitive OTT video streaming services becomes cheaper, it's likely that a lot of content-creators and broadcasters will present alternatives, though. The question will be if bigger African services powered by the telco's have managed to divided up the market amongst themselves by then.
How can Divitel help?
At Divitel we're uniquely positioned to help you set up and manage your IPTV, OTT and/or VOD offering for the African market. As an independent systems integrator we excel in finding the right hard- and software partners for your project and deliver in record-breaking time. Our aim is the highest possible quality, with the lowest total cost of ownership (tco) and fastest time to market (ttm) possible. Our consultancy service can independently supply you with unparalleled insights in the technology and the business side of (mobile) video, while our managed services will present you with a scalable way to drastically decrease CAPEX while maintaining the highest possible quality of service (qos).
Do you want to know more about Divitel or are you interest in discussing your business challenges with one of our many knowledgeable Divitelites? Reach out to your Divitel contact or drop us an email at email@example.com