African Television’s new business models

Posted on March 1, 2017 12:00 am

Faster and better broadband have made Africa’s broadcast television’s more commercially viable proposition, and user numbers and revenues both appear to be growing rapidly. These point the way to dramatic changes in the business of television which have implications for producers, traditional television services, major film studios, and viewers around Africa. Online subscription video on demand services are increasingly commissioning and purchasing content for premiere screenings, rather than simply operating as aggregators of content from other sources.However most of the content available on video on demand platforms in Africa, productions are revivals of shows first screened on traditional television. Due to my involvement in development of various VOD platforms in the continent, i will not go into the details.There are also other platform based programs providing new opportunities for filmmakers. For producers, the prospect of online subscriptions video on demand services becoming a new funding source is a welcome development. The amounts paid for rights can however often be lower than that paid by traditional sources, especially for back catalogs. Some like South Africa’s SHOWMAXX have managed to leverage buzz on subscription video on demand services for shows that were cancelled by traditional broadcasters to revive their work through funding.The subscription video on demand services have freed African filmmakers from some of the disciplines of commercial television. No longer do producers necessarily have to follow the Tv networks’ requirements that an hour of scheduled program time equate to anything between 40 and 50 minutes, depending on the amount of advertising permitted in a market. Narrative curves are also changing, with binge viewing blunting the effectiveness of the end-of-episode cliffhanger.The prospect of continental distribution is particularly valuable for independent filmmakers with South African, Nigerian and Ghanian filmmakers being at the forefront of this revolution.

The African reach of some subscription video on demand services could enable them to overcome limited cinema releases and piecemeal local sales. But I spoke to a critic of African filmmakers business model who told me the idea that the streaming services can be Nigerian or South Africa film industry new arthouse circuit is just nothing short of lifesaving for the filmmakers. The optimism of independent producers was fired by the deals struck by likes of SHOWMAXX but the subscription video on demand activity pushed up the prices of many films across Africa. It also prompted established distributors to reconsider the relative values of streaming and theatrical rights.The rise of streaming services in Africa has also forced changes in traditional television broadcasters’ approach to online. While all of this activity in the online space might give the impression that the death knell has sounded for broadcast television, that platform remains financially, socially and culturally powerful and influential in African perspective. New mechanisms for funding and distributing content are emerging, with private equity funding and existing industry powerhouses at the forefront of innovation. And African viewers have never had it so good. As one of those at the heart of technology industry, every major technological advance has prompted misguided obituaries for traditional television but that in my view won’t happen soon.Traditional television’s current nemesis is subscription video on demand, a service that delivers television programming via broadband networks but now linear Tv networks are also launching their own products which means they won’t suffer the demise many amateurs experts to happen.

Although it is seen primarily as a challenge to traditional pay TV providers, but is also perceived as a potential threat to free to air broadcasters most of who dominate African market. No doubt it competes for spend, as well as for on screen talent, programme producers and writers, and viewer attention.Your blogger’s expectation is that most customers in Africa who subscribe to DSTV, STAR TIMES, ZUKU among others will add subscription video on demand to their existing pay TV content and will see it as a way of adding to their existing suites of programmes, equivalent to adding a family pack or a sports pack to a conventional pay TV package. The ability of subscription video on demand services to grow their share of the viewing market will be a function of their content budget. This in turn will depend on the revenues they can generate, as well as the sales, production and marketing costs. TV programmes are going to continue to either be leased through licence agreements or commissioned by African television channels and programme services. The more successful a series, or cast and production team, the more sought after it will become, and the cost of its rights invariably increases and hence more viewers for Tv network which owns it. No doubt the business models will continue to evolve in television industry but one thing that won’t change is the demand for good television content which is at an all-time high in the continent.There are signs in many African markets of incremental decline in linear television, but it is likely that the new and the traditional services will live side by side for some years to come.

Contador Harrison