Pay-TV in Africa is thriving

Three groups are in a major battle for pay-TV subscriber eyeballs in Africa, a new report by London-based company Digital TV Research has revealed. Researcher Simon Murray discusses what he found out. by Glenda Nevillon

South Africa’s MultiChoice, France’s Vivendi and China’s StarTimes/StarSat came out tops in a study of 35 countries conducted in the last quarter of 2016.

“Most countries will see a lot of growth – but most are starting from a low base,” says researcher Simon Murray. “The Francophone countries in West Africa will see very strong growth.

“MultiChoice will continue to have a good market position, although this will be challenged by StarTimes. StarTimes will also challenge Canal Plus in the Francophone countries,” he says.

Digital TV Research found that MultiChoice had 11.61 million subscribers across satellite TV platform DStv and DTT platform, GOtv, by the end of 2016. Murray reckons this will grow to 17.66 million by 2022. Vivendi had 2.32 million subs to its Canal Plus satellite TV platform and Easy TV by the end of last year, but estimates are that this will climb by two million to 4.32 million by 2022.

But it was StarSat/StarTimes that had Murray most excited, saying it had shown the “most impressive” growth, and is only one million subscribers away from MultiChoice. The group had 4.18 million subscribers at the end of 2016 and this is estimated to grow by 10.61 million by 2022. Much of this growth will be achieved from satellite TV subscribers in new countries.

“StarSat is a Chinese company that is principally known for manufacturing set-top boxes. Its expansion in Africa has largely been down to it obtaining DTT licenses in several countries (and maintaining good relations with government relations),” Murray says.

South Africa, of course, is desperately behind in terms of migrating to Digital Terrestrial Television, which is now mired in political conflict, not just due to opposition political parties but from within the ANC itself after Communications Minister Faith Muthambi flouted a directive from the party to manufacture encrypted set-top boxes.

“Some countries are yet to start DTT transition, but some (especially in East Africa) have already completed it. South Africa probably had the hardest task, given that its analogue terrestrial network was the most complex in the region. However, DTT in South Africa has been held back more by politics than network construction,” Murray says.

Murray believes DTT will grow, as it is “a cheap way to supply and receive multichannel TV. Pay DTT (alongside free-to-air DTT) has enjoyed rapid take-up in several countries (Kenya and Nigeria for example) as a cheaper platform than satellite,” he says. “The major players have both satellite TV platforms and pay DTT platforms: MultiChoice has DStv and GOtv, StarTimes has DTT and satellite (usually called StarSat) and Canal Plus has satellite and the fledgling DTT service Easy TV.”

Murray believes streaming platforms will have an impact, but they will not prevent strong pay-tv growth. “Netflix is too expensive for most. MultiChoice has ShowMax in most African countries. There are also cheaper options such as Iroko TV from Nigeria. Many of these cheaper options rely on mobile delivery rather than fixed line,” he explains.

Murray says that in order to fight off competition in the sector, most companies lowered their prices last year, which had a knock-on effect. “Competition is forcing down prices for most operators outside South Africa and Nigeria,” he says. And,
he adds, while power outages on the continent remain a problem, most homes have just “learned to accept it”.

In terms of trends, Murray says top European soccer is a major attraction for subscribers, as is local content.

Pay-TV in numbers

From the 19.47 million pay-TV subscribers across 35 countries at the end of 2016, 12.14 million were satellite TV and 6.76 million pay DTT. The pay total will nearly double to 36.72 million by 2022, with satellite TV contributing 18.36 million and pay DTT 15.84 million.

South Africa supplied 6.39 million of the 2016 total pay-TV subscribers, which will grow to 9.14 million by 2022. Nigeria will close in on South Africa; increasing by 4 million from 4.46 million in 2016 to 8.45 million in 2022.

Sub-Saharan pay-TV revenues will reach $6.59 billion in 2022, up from $4.20 billion in 2016 and $1.65 billion in 2010. South Africa and Nigeria will contribute nearly half of the region’s pay TV revenues by 2022.

Satellite TV accounted for 87% of the 2016 pay TV revenues, but this proportion will fall to 78% by 2022. By contrast, pay DTT will climb from 11% of the total in 2016 to 18% by 2022 – or from $467 million to $1.156 million.

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