Going Digital: Changes, Challenges and Opportunities
The 80-year-old television industry is at the precipice of a distribution and content revolution. The widely anticipated convergence of personal computers, the internet and television is finally happening. Already, across the globe, every aspect of television creation and distribution is impacted, and for companies new and old, billions of dollars are on the line.
Sub-Saharan Africa’s television industry, the very last to embrace a viable digital ecosystem, is set to follow that trend as the power of the ongoing global digital revolution will leave no continent untouched. In the next five years, for example, viewers in more than 100 million Africans homes will have the option to watch their favourite shows, video clips and movies on smart, low-cost, mobile television devices, not to mention other gadgets connected to the Internet. Consequently, the television broadcasting sector across Sub-Saharan Africa is on the verge of a major transformation and is set to experience phenomenal change.
A summary of the fundamental changes that APBF believes will ensue across the African television market are as follows:
• Consolidation of existing pan-African DTH satellite television platforms • Entry of a new and compelling pan-African DTH satellite television platform • Challenging migration of free-to-air channels unto nationwide DTT platforms • Significant opportunities to create new regional radio and television networks • Introduction of new advertiser backed local content syndication business models • Mobile Network Operator led, DTH, Online, VOD, OTT and triple play operations
• Major challenges in the regulation of Africa’s converging digital ecosystem • A major overhaul of the national regulatory frameworks in order to remain effective
• Creation of dynamic, technology-driven, television revenue models • Introduction of new audience measurement technologies and systems • New and efficient encryption security to support television subscription services • Introduction of enhanced conditional access systems to drive effective data-mining
- A sophisticated contracts regime comprising:
- Content copyright law; music rights; performer licensing
- Work relationships: unionisation issues, third-party sub-contracting
- New media predicated, foreign direct investments & taxation issues
- Rights acquisition, distribution & finance; talent & service agreements
• A phenomenal surge in the demand for local content made for Africans by Africans. • Origination of new content comprising the following genres:
• Sports • Talk Shows • Music Video • Game Shows • Home Shopping • Daytime Drama • Prime-time Fiction • Religious Television • Local News Programming • Variety Shows & Specials • Children’s Programming &Animation • News Magazines and Documentaries
• First, the opportunity will initially open up to collaborate in joint-venture partnerships with:
• international satellite segment providers • direct-to-home satellite television operators • manufacturers of digital broadcast equipment and software
• Second, as the market settles, likely collaborations will ensue with major transnational multi-media players. Such collaborations will in all likelihood commence with non-African output deals and/or strategic minority investment holdings into new DTT licenses BY established industry players. The financial objective would be to ensure that there is a consolidated content distribution platform in play.
• Third, the big push, however, will happen after 2014, when Africa’s would-be key industry players - primarily in Nigeria and South Africa - begin to invest in establishing content factories and monopolise the continent’s nascent content production industries.
Africa-focused multi-media conglomerates will gradually emerge from the “woodwork” as the continent’s media entrepreneurial class effectively anticipate new market trends.
• The winning conglomerate (s) will be those that will
(1) invest in an efficient distribution system straddling the markets of Nigeria and Southern Africa (2) are prepared to invest in organising the current industry into a systemic and systematic assembly plant and (3) invest in the training and retaining of a quality skills-set of entrepreneurial creatives, straddling the following disciplines:
• Creative Talent • Production Talent • Production Scouts & Creative Agents • Specialist, Industry Attorneys & Multi-Media Business Managers
The impact of direct-to-home digital television and digital terrestrial television across sub-Saharan Africa’s television broadcasting markets will be revolutionary, given the prevailing, trans mutative and almost monotonous existence of the analogue, free-to-air television environment. The status quo will be replaced by a new interactive technology based market place and within the context of the following considerations:
• First, as more bandwidth becomes available, a rapid convergence of platforms comprising the mobile handset, the television set and the laptop will ensue. The incremental emergence of these as new platforms will be driven by the availability of more fibre, high-speed ADSL connectivity, and an increasing ease in the obtainability of new terrestrial cable systems, mass satellite coverage and a plethora of Internet television distribution platforms. As such, traditional television networks will begin to experience stiff competition in audience ratings and a significant, corresponding reduction of advertiser-generated income streams.
• Second, via Internet Protocol television (IPTV), digital technology has already created a new content distribution paradigm in which “borderless television”, anytime and anywhere, has become a virtual reality. For example, currently, except where internet connectivity is not readily available, viewers of Channels TV in Nigeria (who can afford an appropriate electronic IPTV device) are no longer confined by location in the form of Nigeria’s national spectrum limitations. Consequently, television platforms that are generated on the African continent, which create IPTV platforms, can be successfully accessed anywhere in the world at any given time provided the right technological configuration is in place.
• Third, from the viewer’s perspective, digital television will eliminate scarcity in the choice of access to and availability of quality African content brands. In all likelihood, new set-top-boxes that are sold within Nigeria and/or elsewhere on the African continent. would have inserted within, processing chips that have phenomenal download and terabytes of storage capacity and, the capability of storing well over 1000 hours of content channels on each local hard drive. What this means is that within the next 3 to 5 years, owners of set-top boxes in Nigeria and everywhere else in Africa will begin to control what it is that they wish to see and when it is they wish to view content. Instead of asking themselves “what’s on now”?, the new viewer paradigm will shift the question to “what can I or do I want to watch now”?.
• Fourth, a corresponding convergence of broadcasting and IP standards will arise and along with it, a new content continuum in which “the trusted brand” will be crowned king will also ensue. In essence, at any given time, once DTT kicks in, viewers will have a minimum variety of not less than 50 live-distributed channels to choose from and an unlimited choice of up to 400 or more live-distributed channels to decide on. Powerful and engaging brands - in the form of distribution outlets and/or platforms - that viewers can readily and easily identify with, will be the most sought after electronic media as digital technology unleashes it prowess across sub-Saharan Africa’s nascent television landscape.
• Fifth, a significant shift in the business of television as we know it is bound to ensue across sub-Saharan Africa, just as it already has within all other developed television markets. Within the United States, in Russia, China, Britain, and Japan and as well, across most of Europe, a new commercial matrix in which interactive, server-driven and software solutions-based infrastructures, are already singlehandedly determining the scope and magnitude of new commercial models. Likewise, with specific reference to Africa, television companies in Nigeria and South Africa in particular, which are able to successfully gear up their operations with the view to drive their respective businesses as a consumer data collection, processing and access points first and, then, as content clearing houses and distribution systems next (straddling DVB, Java, IP and MPEG solutions’ based infrastructure platforms), will hugely prosper. The synergy between ABN Consortium and the SABA is set to ensure the creation within five years, of a formidable digital television paradigm, worth tens of billions of dollars.