According to research recently published by Futuresource Consulting, global pay-TV decoder shipments are growing, although this growth is mostly in Latin America and the Asia-Pacific region because developed pay-TV markets are approaching saturation.
At the upcoming DISCOP AFRICA multi-platform content market in Johannesburg in November, Richard Bell, CEO of the Wananchi Group, will present a season on the development of the pay-TV market in Africa.
Bell believes that Africa will soon become the worlds fastest growing pay-TV market. This is because penetration is currently so low and over the medium term is likely to reach global penetration levels.
Despite the steady improvement of free-to-air (FTA) offerings in Africa, FTA ad revenues are limited. Therefore, the ability of FTA broadcasters to generate content is constrained. Pay-TV operators have more revenue streams and can therefore invest in more content, so they have more to offer viewers. The growth of pay-TV offers a fantastic opportunity to grow local content and on the back of that, expand the entire creative arts and sports entertainment industries on the continent. Thats where the Wananchi Groups focus and passion lies, says Bell.
Positioned as East Africas leading home entertainment operator, the Wananchi Group is the second largest pay-TV operator in Africa after South African giant MultiChoice. Wananchi is the owner of the direct-to-home (DTH) satellite pay-TV offering, Zuku TV, and currently broadcasts in five countries to over 200 000 households.
Commenting on the present pay-TV landscape in Africa, Bell notes that there are a few home grown pay-TV operators in West Africa, as well as a few small ones across the continent. But theres nothing that we know of currently with much scale. In addition there are some DTH companies broadcasting from the Middle East on a free-to-air basis, but not with pay bouquets that were familiar with.
He cites as a negative milestone in the development of pay-TV in Africa the fact that GTV, HiTV, Smart TV and Top TV launched onto the market and went out of business.
A positive milestone is that Wananchi has now been around for four years and continues to go from strength to strength, says Bell.
The regulatory framework in Africa also presents challenges for pay-TV. Every one of the 53 countries in Africa has a different broadcasting regulator and different policies. The advent of pay-TV has coincided with a drive towards the digital switchover in Africa. This has caused a lot of confusion with regulators and the market.
Generally pay-TV is not regulated too heavily which is a double edged sword. On the one hand getting licences is fairly straight forward. However, issues such as equitable access to premium sports content (such as the English Premier League), as well as local content provisions, and the FTA must carry must offer are all being dealt with by regulators in a very haphazard fashion. The result is significant barriers for pay-TV operators in growing their businesses, explains Bell.
When asked about the viability of IPTV in Africa, Bell expresses the opinion that cable operations will grow exponentially in urban centres over the medium term.
Wananchi also believes that IP based streaming will grow dramatically, he says.