Balancing Act (London)

4 July 2014

Africa: 2014 May Be the Year Africa's Mobile Operators Start Operating Vod Platforms - This Week Glo Nigeria Joins the Party

analysis

London — Issue no 713 4th July 2014

Operating VoD platforms is proving to be a tough call for Africa's mobile operators. Many don't have the network capacity to support video streaming by any great number of subscribers.

The income from it in the short term looks less than compelling. Nevertheless, Russell Southwood believes 2014 may be year they finally start doing VoD platforms at scale.

From our research, we have counted 73 VoD platforms operating in Africa either on the Internet, via satellite, through mobile apps and mostly these are Over-The-Top services (OTT).

The vast majority of these platforms have been set up by independents and although they may have operating alliances with mobile operators, they are not operated by them.

For nearly 18 months, we have been listening to credible rumours that 3-4 of the major mobile operators would be rolling out film and VoD platforms "any minute now" or by a certain date. Only recently has this started to happen and it has not been well publicized.

Africa's mobile operators have a number of options when it comes to film and TV VoD platforms. These might be summarized as follows:

Ignore it: It's a troublesome business that we know nothing about, the revenues are over-hyped and we're going to get the data revenues from video streaming whether we play in the space or not.

Get someone else to do it for us: There are many international suppliers who will provide a catalogue of international movies and TV content.

Unfortunately, most users are interested in a mix of content with the skew mainly towards local or African content from elsewhere. Well, OK then, make alliances with local VoD operators as MTN has with DoBox and Afrinolly in Nigeria and others will do elsewhere. This way you get to see their traffic figures and can take their business for yourself later if you want it.

Do it yourself: Because they are vertically integrated like the former incumbents, they tend to believe they can and should do everything. However, most of them know nothing about content: running a VAS department is poor training for what comes next. A couple have content in their group company portfolios - Orange and Millicom (with MTG) - but for most it's a completely new world.

Buy yourself an operation: Although not a film and TV platform, this is what MTN has done in the music area by buying CCA. See this link for the video interview.

Even more cynically, you can wait until one of the independent VoD platforms is successful and buy them. There's the tricky matter of timing as you don't want to leave it too late and end up paying over the odds.

This week Glo Nigeria announced the launch of its VoD platform Glo Total Entertainment. The new platform gives subscribers access to sports, movie trailers, comedy, celebrity gossip, TV series and music videos, which can be accessed using a mobile app on all major smartphone platforms. It seems to me that offering movie trailers indicates a certain lack of confidence in the streaming capabilities of the network.

And as the Tech Cabal blog noted:" Intending users have to subscribe by sending "sub" to 9999, then they receive a link to download the app. Subscription to Glo Total Entertainment costs N25(US 15 cents) a week or N100 (US 61 cents) a month. Your subscription allows you access to download content from its library. However, normal data charges still apply".

In the great "me too" race, Glo has taken last position as MTN is already in alliances with Dobox and Afrinolly, Etisalat is also in alliance with Dobox and Airtel has its own N5 Entertainment Store.

Elsewhere, Moov Côte d'Ivoire has responded to MTN's Play offer by bringing in Summview to provide the back-end and content for its VoD streaming offer.

So it's starting to look like the beginning of the roll-out of 3G in Africa. Operators will tell you it's very difficult to make commercial sense of it and then once their competitor has launched, they will also put an offering in the market. Once two are in the market, the rest will feel compelled to follow. So 2014 looks like the year when the mobile operators will amble into content on VoD platforms.

More details are provided in the market report.

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