Africa: 2019 Must Be the Year Africa's Mobile Operators Adopt "Content+data" Bundles to Create a Pay-for Digital Mass Market of Users for Music, Video and Games


Digital content and services have been slow to take off, even in Africa's largest digital markets. The cost of data and the fear of running out of it still haunt's Africa's young digital natives. Russell Southwood looks at how things are going to have to change if there is going to be a mass market for pay-for music, games and VoD services.

In broad terms, there are two groups of Sub-Saharan African users for digital content and services: those who can afford them and those who can sometimes afford them. The former are the small number of reasonably well-off, middle class who have a debit or credit card and can afford to buy Netflix or Apple Music. However, in most countries the number of these people don't yet really amount to a mass market.

The latter are a much bigger group of people who - given Africa's demographics - are nearly always young and have much less disposable income. When they have the money, they look to find cheaper options to consume music, film and TV and games. The first of these options is still piracy. It may now come in a digital version as the seller now offers memory sticks but it's still an analog process. Nevertheless, users are spending either several US dollars a week or a month on it.

The alternative for them is to find free content on the internet, the most obvious source of which is YouTube. In every key digital market in Sub-Saharan Africa, it has a mix of music, TV drama, comedy and news that is being watched by significant numbers of people. This content is free because it is advertising supported but there are no more than a handful of these "free-at-the-point-of-delivery" types of sites at a local or regional level with the kind of audience reach that will attract advertisers.

So in terms of potential business models, you're back to "pay-for" services. The difficulty is that all the services eat data and other than general advice about levels of data required, it's hard for the young data user to know how fast their data is going. The cost of data means that many users will hesitate before using a service, particularly for video content where data "overhead" is so high.

Unless something changes, Sub-Saharan Africa will be stuck in this two-lane market: fast and easy for those who can afford things and slow and difficult for the small spenders. It's a classic high price, low volume market vs what could be a low price, high volume market. Operators are understandably loathe to lose the income from those high prices in order to commit to an unproven mass market.

One tactic to break through this logjam is for digital service providers to offer "data+content" bundles: in other words, when you sign up for a music, video or games service, the data you consume is covered in the price of the service. You know what it costs you up-front and you don't have to worry about running out of data.

Currently there are very few of these kind of "data+content" bundles on the market and the majority are aimed music streaming users. As with everything mobile operator, the deals are often very complicated. They either restrict the number of tracks you can listen to or videos you can watch. Or they even restrict the amount of data you can use which rather defeats one of the key purposes of this kind of bundle: to kill the fear of not having enough data.

We're hoping that 2019 will be the year that everyone begins to understand that there is a huge market for digital services out there but it will only become visible with a pricing and data structure that can open it.

It provides an overview of: Main Platforms Used and Advertising revenues; Social Media Platforms; Voice and Messaging Services; Media Platforms; Audio-Visual Services; Music Services; Payment and e-commerce Services and Other DigitalServices. It covers the 11 Top Digital Landscapes in Sub-Saharan Africa: Nigeria ; South Africa; Kenya; Tanzania; Ghana; Ethiopia; Cote d'Ivoire; Angola; Senegal; Cameroon and Uganda. The report concludes by looking at the new type of business models required to promote new digital content and services.

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