Nigera and South Africa TV on Demand Research Paper

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TV on Demand in Africa

TV on Demand models in Africa as well as the rest of the world are competing for market share via a number of avenues, whether by offering online streaming, original content, or unique content. This paper will discuss media and mobile trends/opportunities in Africa as compared to the rest of the world to show what the market is like for TV on Demand operators.

Market trends for TV on Demand throughout Africa are growing: this is based on the concept of TV content providers authorizing content through pay-for-service outlets like Hulu, Netflix, and Amazon. These providers essentially offer TV on Demand deals for clients that make regularly scheduled programming a relatively old form of viewing content, utilized mainly by low-income families that cannot afford on Demand access. Thus the trend not only in Africa but all over the world for TV on Demand is growing. In Africa, the trends show that across Africa, TV on Demand users also go to Hollywood films, with nearly 50% more Africans going to Hollywood films than to African films (63% vs. 17%), a trend which indicates that with TV on Demand comes a demand for more Western/Hollywood type of entertainment (Harrison, 2015). This trend is also global, as more Hollywood films are finding more success at the overseas box office and as Video on Demand providers break into non-Western markets (Ovum, 2015; Bond, Garrahan, 2015). In Europe for example, there are over 3000 on-demand services in the EU, with 1000 catch-up TV services and nearly 700 on-demand TV services for the continent (Balancing Act, 2015).Get full Download Microsoft Word File access
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Research Paper on Nigera and South Africa TV on Demand Assignment

Indeed, as Bond and Garrahan (2015) observe, on-demand TV is now drawing more viewers than traditional broadcasters are drawing. The reason is that content providers such as YouTube et al. make it hard for networks to keep people entertained with as many choices and options. Younger populations skew towards on-demand TV, while older generations stick with traditional broadcasting because they are not as technologically-driven as younger clientele. However, as the older generation declines, broadcasters are seeing less revenue because of their inability to draw from the younger generations, who want more choice which TV on Demand offers. In Africa, the biggest media company is Naspers, and it recently acquired ShowMax, a video-on-demand service, which shows that not all broadcasters are being left behind. Naspers is admitting that it must offer TV on Demand in order to secure market share in Africa, just like must be done in the rest of the world (Joseph, 2015). In Africa, there is also Trace TV,, DITV, RT, SABC, MultiChoice, which is facing stiff competition from Netflix for TV on Demand viewers; there is also StarSat, and sister company Platco Digital; Siyaya is also available for broadcasting, as well as other ventures -- CloseTV, Kagiso TV, Mobile TV and Mindset Media Enterprises (Gedye, 2015). These are located in Africa while throughout the rest of the world, the major players continue to be Netflix and Amazon in the West, with Apple making a play in regions in the East as well.

The growth of the market in Africa has been phenomenal, as more people tune into TV on Demand services, following the competition from new players and the need to supply original content to attract viewers. As Joseph (2015) points out, there is the potential to have 60 million + subscribers of TV on Demand in Africa alone, which ShowMax is looking to target for its market share.

This generation is consuming media in Africa through mobile devices such as mobile phones and tablets, laptops, personal computers, and televisions. These media devices utilize Internet connections that help users to stream the content of their choosing. TVs also use satellite dishes that relay data from satellites that broadcasters use to send signals to individual users. Each of these media devices is used by this generation in order to view TV on Demand.

Mobile subscriber numbers in Africa were in 2014 up to 329 million, which is 38% penetration, according to GSMA (2015). By 2020 it is expected that more than one billion mobile subscribers will be in the world (GSMA, 2016). Overall the mobile phone industry contributes over $100 billion to the country's economy (Winsor, 2015). This is a substantial contribution to the economy of several nations in Africa, although the biggest are Nigeria and South Africa.

The numbers for African Diaspora can be assessed by region. In North America, the number is 39 million; in Latin America, the number is 112 million; in the Caribbean, the number is 13.56 million, and in Europe the number is 3.5 million (World Bank, 2015). These numbers indicate that for Africans around the world there is some interest in having access to African television.

The same can be said for Nigerians who are also dispersed throughout the world. The numbers for Nigerian Diaspora in the U.S. show that 376,000 Nigerian immigrants currently live in the U.S. (Migration Policy Institute, 2015). These Nigerians abroad also have an interest in accessing Nigerian television.

While TRACE TV has acquired African VOD Service, what makes their VOD platform work is the fact that they have high-quality content that subscribers want to pay for to stream on demand. Content includes Ogas at the Top (Nigeria), the XYZ Show (Kenya) and other series from around Africa (Screen Africa, 2016). Furthermore, Trace will use Trace Play for its on-demand service. Trace obtains the rights to popular pay-TV shows and will be hosted by Trace Play until the two finally merge into one entity.'s subscribers will use the Trace Play catalog to access the thousands of hours of footage and content that the provider will have (Vourlias, 2016). uses Internet technology to deliver its content so users can access VOD over the Web using mobile phones or computers.

If I were a television company looking to tap into a subscriber base I would partner with MTN, AirTel, Glo Mobile or Etisalat. These companies are mobile providers and have the ability to offer the technology needed for streaming TV on demand in Africa. MTN has 62.5 million subscribers, Airtel has 31.1 million subscribers, Glo Mobile has 31.3 mobile subscribers, and Etisalat has 23.5 million subscribers. These companies make themselves very attractive for a television company looking to break into the market by capturing their market share and portion of mobile data subscribers who might use VoD services (NCC, 2015). I would partner with these four companies because of their reach into Africa and because they have so many subscribers who could be used to build my viewership. They are also well-known and would allow for our broadcasting service to become well-known and more visible as a result. They each have significant footprints in the African market place and are recognized as leaders that can be trusted for delivering dependable service. Their reputation makes them a good pick to partner with for a television company looking to attract subscribers, and their rates are affordable which also makes them attractive.

The cost of the proposed partnership with the companies stated above can be broken down into the following areas:

With MTN, the cost would likely reach into the high millions, as MTN paid $150 million for a third generation license.(Balancing Act, 2016). The revenue however would be near $40 billion for mobile subscribers of the MTN company and for the television company, charging $5 for subscription, the revenue, if acquiring 60 million subscribers for MTN would be $300 million for the television company. However, if fees are at $10 per user, then the revenue would be in excess of $600 million and fees could be raised for higher service rates and faster streaming so that revenues could even reach more than $1 billion for the service if subscription fees are $20 per user.

Further costs of doing business with MTN would require tapping into their network and doing marketing and campaigning to educate the public on the service being offered and why it is good. This would require advertising costs and that could reach into the $100 million range if executed properly and with blanket saturation advertising using every venue and marketing approach possible. Installation fees would also potentially be needed for those who join the network for the sake of VoD streaming and this would have costs associated as well, but they could put back by MTN as part of the partnership cost for implementing the service.

With Airtel, if subscription fees are at $5 per subscriber then the revenue would be more than $150 million, but if subscription fees are raised to $10 per person, revenues could double to $300 million. The cost of partnering however would probably also be high, around $200 million, so there would need to be higher charges, of around $20 per user, which would reach the revenue to $600 million.

The same marketing and advertising costs associated with Airtel as with MTN would be expected and these would include networking with subscribers… [END OF PREVIEW] . . . READ MORE

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