MultiChoice Hopes to Ride the Waves of the New African Narrative

Joining the now common narrative of “Africa Rising”, the continent’s premium entertainment company is seeing challenging years ahead. In the immediate future, it is caused by rampant piracy, but inevitably, due to changes in how families obtain content, industry observers believe the pay-tv business model as it has been known so far will be shattered.

This is not a concern lost on the senior managers of MultiChoice Africa, operator of the pay-tv channels of DStv and GOtv – both popular across Africa. The competition comes in many forms, noted Nico Meyer, CEO for Africa, whose office is based in Dubai.

Meyer and his senior staff were in Mauritius last week, promoting their services to over 90 journalists from media across the continent, showcasing the many content providers to the premium channels, from the BBC to Warner, and from Disney to Telemundo – the latter being the producer of a Mexican drama series that has proven popular in Ethiopia.

It was a moment of showcasing where content providers for television have brought their best performers, including those who appear on channels such as History, Crime & Investigation (C+I), Supersport and the music channel MTV. Nonetheless, most find BBC’s LifeStyle chef, Ed Baines, a fascinating experience, with his cooking performance going out to households live every night. He went to Mauritius to showcase a combination of cooking, camera shooting and broadcasting – an event which thrilled his audience.

“Viewing reality shows on TV is one thing,” said Mahder Bekele, radio talk show producer hosting a three-day a week show on Sheger 102.1, and one of the three journalists invited to attend the showcase. “Seeing it live, when it actually happens, is another treat altogether. I was impressed with the level and quality of production.”

An author of “Entertain” and “Best of British”, Baines was only matched by the live performance of Magnus Scheving, the creator and producer of “LazyTown” – an educational musical program for children distributed by Turner Broadcasting System.

Based on the small island of Iceland, LazyTown promotes a healthy diet for children, avoiding scenes of violence and the promotion of junk food, according to Scheving, who created the show two decades ago, and has been casting up until last week. At 50, he is to retire acting as a “Superhero”. One of the many programs on Nickelodeon, a Warner company’s channel, “LazyTown” remains a popular show among children whose parents have a subscription to Digital Satellite Television (DStv).

Today, DStv has become a household name in Ethiopia and across Africa, expanding primarily for its sports and movie channels. Yet, its largest subscription base, with five million, remains in its home base, South Africa, while Nigeria represents the single largest market elsewhere on the continent, with numbers a little over three million. Subscription in Ethiopia is believed to be one of the lowest on the continent, although the company’s officials are wary of disclosing information on finance and subscriber numbers.

However, in three decades the company has evolved to become a multiplatform entertainment outlet, reaching over eight million subscribers in 50 African countries. Prior to the mid-1980s, it had been a small company managing subscriptions for M-Net, owned by the same parent company, Nasper. The parent company was established in 1915 in Cape Town, where it has print, internet and pay TV products, with a total revenue of 5.9 billion dollars last year. Its pay-tv segment, through DStv and GOtv, represents more than half of the profit for the fiscal year 2014, although in generating revenues its shares is below 50pc.

The pay-tv service under MultiChoice started out with less than 10 channels, leasing satellite space from others, to now offer over 100 channels in Ethiopia for an annual premium subscription fee of 948 dollars. Subscribers need to buy the high definition (HD) decoders from the company’s country retailer, MultiChoice Ethiopia, located near Bole International Airport, for no less than 2,050 Br.

With all these costs, MultiChoice finds it increasingly difficult to compete with new companies coming to the market it dominates, such as Chinese Star DTV – a digital TV service launched in 2009, which has reached to over a million subscribers.

“We’re born and raised in Africa,” Meyer reminded the media at a press briefing last week. “We are trusted partners on the continent. This will be a challenge to others coming into the continent.”

However, highly localised free to air broadcasting, such as the Ethiopian Broadcasting Services (EBS),  beams down to Ethiopian homes from Arab SAT, but also pirated cards smuggled to the country at prices far lower than what MultiChocie charges have come to the scene in competing for a slice of the market.

The expansion of internet bandwidth in Africa too is also an emerging challenge to the market position MultiChoice has been enjoying on the continent. An increasing number of people now resort to mobile and other portable devices to entertain, but for a price that is close to nothing in most cases. It is a development which Meyer describes as a “proliferation of devices”. His company’s competitive edge in buying premium content from production companies and distributors remains a turf under erosion.

“It’ll be online where people will watch content,” Meyer conceded. “This will require content, which is what customers come looking for.”

Largely a broadcasting company which depends on third party producers for its content, such could be the threat behind MultiChoice’s last week showcasing dubbed, “Only the Best”. Meyer and his team would be pleased to see the debut in Mauritius’ resort hotel, Trou aux Biches, help them mark the DStv brand in the African market, hoping to storm the waves likely to come in the near future.

He banked his optimism in investments the company is currently making in technology, local content, people and charities. It is in the technology development area where MultiChoice plans to make the payment system easier, considering the trouble of foreign exchange transfers across African borders. MultiChoice is soon to introduce scratch cards and an online payment system.

MultiChoice envisions in the long term a business model whereby it delivers content “anytime, anywhere and in any form”.

“We’re moving into an incredibly exciting era for television,” says Caroline Creasy, head of corporate affairs at MultiChoice Africa.

Creasy is behind the company’s new initiative in embracing the now common but controversial narrative of “Africa Rising”. First coined in 2010 by The Economist magazine, largely considering growth of African economies measured by their GDP, and the phenomenal expansion in mobile telephony, other international brands – from TIME to The Financial Times and Forbes – have since joined the chorus. Yet, critics continue to voice their scepticism, arguing that it is a “premature narrative”.

Yet, MultiChoice Africa decided to get onboard in promoting Africa’s arguably rising decades.

“This is Africa; our home where we want to make a difference,” said Creasy.

She hopes to see individuals and non-governmental organisations that do things that inspire others coming forward to MultiChoice, which will now give them a platform for promotion, and eventually some form of funding. The initiative was inspired by her own encounter with a mother in South Africa, who was feeding soup to families of miners on strike in her country.

“If you inspire others to greatness, it will take them there,” she told Fortune. “If you tell them they can’t, they then give up.”

Launched last week in Mauritius with a release of an album with music on “Africa Rising”, MultiChoice’s approach to giving back has yet to be tested in helping the company storm the wave.

“The honest truth is, we have never done this before,” said Creasy. “It is new and different.”

 


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