United States Agency for Global Media

By Paul Marszalek
BBG Office of Strategy and Development

While arguably nascent, there is considerable excitement and activity in the sub-Saharan TV market. But factors like demographics and business models will make this a market like no other…

Notes from DISCOP Africa

The sub-Saharan African television market is fast changing — driven by the tastes, expectations and usage patterns of an extremely young demographic, unsettled business models, and technological factors that include the rollout of digital television and consumer adoption of pay and satellite TV.

Before driving further, it’s worth acknowledging that describing the African television market as if it is a single continental market is a bit of a fool’s errand. 50-plus countries, all in different stages of economic development, and scores of major languages are only a few of the factors that make it complex.

That said, takeaways from November’s DISCOP conference, the global television content market for Africa, suggest there are indeed some factors that will affect the growth of television across the continent.

While numerous panel sessions within DISCOP cried out for more locally grown content, the exhibition floor screamed “import,” with Chinese, Mexican, Indian, and Filipino production companies hawking telenovelas, or soap operas.

Still, there were signs that things might be changing. South Africa has a robust production and film industry, Nairobi-based television companies are going regional, and Nigeria’s Nollywood, though despised by insiders for its notoriously low production values, is showing that locals will overlook poor production if the stories feel relevant.

For all, there appears to be opportunity — if one can adjust the content to catch the eyes of thirty-something gatekeepers and twenty-something audiences, while figuring out a way to pay the bills.

By The Numbers

Considering there are nearly one billion people on the continent, the total African television market is small – estimated at just 42 million households. Some suggest the number will cross 50 million by the end of 2013. This compares with the United States, which has 114 million television households, according to ratings firm Nielsen.

Further, while price points have become more accessible for satellite dishes and digital terrestrial television, it is estimated that just one percent of Africans have such cable-style bouquets.

The BBG has seen, however, in places such as Zimbabwe, satellite television adoption can seemingly come out of nowhere, suggesting that the landscape could be very different by 2015.

Factor: Demographics

Nothing will have more impact on a broadcaster’s ability to succeed in Africa than the demographics of the continent.

According to U.N. projections, the current median age of Africans is 20. In 2025, the median age will be 22, and in 2050, the median age will still be just 22. At the same time, the continent is projected to grow by an additional 500 million people in the next 17 years, making cities such as Kinshasa more akin to mega-cities like Mexico City, with some 15 million residents. (Related: Bigger Cities, Smaller Screens)

Against this forever-young background, there is increasing awareness among station management of target demographics and, in some markets such as Nairobi, actual ratings. The gatekeepers – the managers and programmers of the stations — are increasingly in their young 30s. If programming fails to catch their eyes, the content will be relegated to also-ran stations and secondary and tertiary markets if anywhere.

To put the situation another way, the problem for content creators is not that there won’t be opportunities for distribution (there will likely be many, as we will see below). Instead, success will be hindered by content that is not targeted and/or formatted appropriately for a very young demographic.

Factor: Content

DISCOP featured the finals of a programming pitch-fest, with local producers from across Africa pitching their ideas in front of a jury. Among the ideas were reality TV programs such as Master Farmer (agribusiness), Dad Can Cook (father/gender roles), and Am I Dating an Idiot? (despite pedestrian title, a program again about gender roles, conduct, etc.).

The point in highlighting these particular winning ideas is that each program had educational, cultural, and public service value — but all were packaged in the contemporary (and consumable) format of reality television.

DISCOP featured international broadcasters, including VOA, the BBC, Deutsche Welle, France 24, Japan’s NHK, and China’s CCTV. But by far the content on display was from the realm of general audience/entertainment.

The Chinese had the biggest presence, a pavilion from which it peddled everything from StarTimes DTT, which delivers a bouquet of channels over the air to a set-top decoder box, to CCTV and independent production houses hawking high-end series. Most of those productions appeared to be epic period pieces or telenovelas with names like My Economical and Applicable Man.

U.S. companies were there as well, such as CBS/Viacom – pushing MTV Base, Nickelodeon, and others; and NBC Universal which had rolled out a big booth for Keeping Up with the Kardashians.

Bollywood, Nollywood, and everywhere in between also had offerings – many in the telenovela genre or action movies.

Combined, these well-produced programs are gobbling up prime time slots, and in the case of some – entire stations themselves. There were rumors of a station in Zambia reportedly dedicating nearly half its schedule to the E! Network.

While there is significant talk about the need and desire for local content, the fact is that African television, is dominated by South African content (on the English side), and imports.

If there is a desire for more home-grown content, the question is, “Who will pay for it?”

Without a mature advertising or ratings industry, and few advertising categories beyond mobile carriers and a finite number of multi-nationals, there simply isn’t much to fund local production. In many parts of the continent, such as in Nigeria, the program producer generally must come to the station with the advertiser already in hand – essentially a time brokering arrangement.

As Africa transitions from analog to digital over the next five years, allowing stations to broadcast multiple digital channels, the situation is likely to get even worse. Simply, there may not be enough ad dollars to go around. Stations that are currently cash cows risk being cannibalized by their own sister stations – not to mention new competitors.

All of this will have an impact on content as new distribution opportunities will drive the need for more even content. Several scenarios could play out. Strong local stations may become regional players. Weaker stations will fill up their hours with low cost imports. As one Lusaka-based programmer put it, “It’s just easier to put on Filipino soap operas at $200 per episode.”

While the market cries for local, economics will hinder.

Factor: Technological Advances

The rollout of digital television may turn the African TV business into the Wild West – at least in the short run.

As experienced recently in the United States, African countries have set deadlines for the changeover from analog television to digital over the next few years. East Africa member states were targeting a year-end 2012 deadline for conversion. South Africa and Namibia plan a December 31, 2013 deadline, and Kenya plans a June 2015 transition. Nigeria has already converted.

The argument for the conversion is that it will free up significant broadcast spectrum to spur development and growth in digital. The downside is that every African with an old tube television will be required to buy a new flat screen or a $50 converter box – no small fee for many.

Considering their uptake of mobile phones, most bet that Africans will somehow find $50 for the box – if there is a compelling enough argument to do so.

Having no TV is a compelling argument, but a better one is the benefit of receiving more TV channels.

But what will be on those channels? Based on the argument made above, economics suggest most of it will be filler. It is possible that regional or multinational channels will make themselves available on digital channels despite the lack of an economic model – perhaps to expand reach, extend the brand, and bet on the future.

These transitions will experience fits and starts. As one DISCOP attendee noted; when Ireland converted to digital in 2011, 10% of the population wasn’t ready with a converter box or a digital TV set.

But looking long term over the next five to seven years, significant progress will be made with digital – especially since so many Africans will be entering the TV universe for the first time.

While digital television finds its legs, satellite TV and DTT (digital terrestrial television) hybrids are growing their subscriber bases.

Multichoice, a holding company that owns direct-to-home satellite service DStv, is reportedly approaching 6 million subscribers, the majority of whom reside in South Africa. StarTimes claims 1.4 million subs to a bouquet that includes the BBC, Al Jazeera, and a Fox entertainment channel, among others. New entrants are on the way.

One of those entrants, and one that may not currently be on the radar of any television provider, is IPTV. We already know that the $40 tablet is here. Is it a fantasy to believe that wireless broadband will arrive at an accessible cost? If so, some Africans’ first personal experience with television might not involve a television at all.

Above of any of these factors, household economics will rule. The disparity between the haves and have-nots in Africa means that the growth of television will continue to be uneven across the continent for years to come.