Africa Market Briefing 2013 - Page 6

africa2_africa 30/10/2013 09:34 Page 5 MARKET FOCUS ccording to findings from Digital TV Research, about 35.3% of TV homes (14m) in Sub-Saharan Africa took digital signals by end-2012. The Digital TV Sub-Saharan Africa report forecasts that digital TV penetration will rocket to 95.5% by 2018 – with household numbers quadrupling to 49m. Full digital transition will have been completed in Kenya, Tanzania, Uganda and Zambia by end-2015. Report author Simon Murray said: “Even we have been surprised by the pace of change and progress in the region’s television market in the year since the last edition of this report. These are exciting times for SubSaharan Africa.” Two-thirds of the region’s TV households still received analogue terrestrial signals by end-2012, though this proportion will drop to 4.5% in 2018. Two-thirds of television homes will take DTT (pay and free-to-air combined) in 2018, up from only 11.7% at end-2012. Sub-Saharan Africa will have 33.8m DTT homes by 2018 – 25.7m FTA and 8m pay – up from 4.6m in total at end-2012. DTT. The most prominent DTT players are China-based StarTimes (active in 10 countries with about 1.5m Sub-Saharan Africa subs) and MultiChoice's GOtv (operational in A Many industry observers expect the pay-TV sector in Sub-Saharan Africa to experience significant growth in the years to come. Here's Advanced Television's overview of the sector and its prospects. 2015. With cable operations established in Kenya, Wananchi launched its Zuku DTH platform in 10 East African countries in July 2011. PREMIUM. Only a small proportion of African homes can afford premium DTH packages. There were 7.36m pay DTH subscribers by end-2012, with the total expected to rise to 11.27m in 2018. Excluding South Africa, the number of pay DTH households will double between 2012 and 2018 to 6m. Of the 9.26m pay TV subscribers at end-2012, 79% were for pay DTH. The pay total will double to 20.39m by 2018. Pay TV penetration of television households will grow from 23.3% in 2012 to 39.8% in 2018. African market to global communications players is borne out by a recent blog post from satellite operator SES. SES notes that in the words of Obiageli Ezekwesili, former World Bank VP for Africa, this is Africa’s “golden moment”, suggesting that as economies around the world struggle with recession, no matter which metric you use, the nations of Africa are charging ahead. Investors worldwide have taken notice, and recognise the potential of this awakening giant. “Democracy is progressing as are the wealth and expectations of the people. A growing middle class is demanding better TV. Population numbers speak for themselves – it’s a huge audience, motivating savvy TV providers to devise commercial models that work in this fast-growing market,” says SES. SES notes that over 300m Africans live at least 50km from the nearest fibre. The distances between urban areas can span thousands of kilometres. So satellite, with its blanket coverage – and reach that’s unfazed by mountain, jungle and savannah - is the natural home for TV. HUNGRY. “Ambitious broadcasters are keen to beat their rivals to a market hungry for entertainment. And they are turning to SES to help them do it. It’s not just pay-TV. Terrestrial players are looking to satellite to grow audiences in this vast continent,” he notes, pointing out that leading Chinese operator StarTimes the fastest-growing digital terrestrial TV (DTT) platform in Africa with over 2.6m subscribers, chose SES-5 – at the flagship 5ºE African slot - to launch DTH across the continent. It joins fellow DTH converts Multi-TV in Ghana and free-to-view OpenView HD in South Africa. Further demonstrating its commitment to DTH, StarTimes just acquired SES's 20% stake in South Africa’s TopTV, also relying on SES to host DTH and mobile TV south of the Sahara. Platco Digital has also committed to SES-5 for its new free-to-air DTH and mobile TV offering for South Africa, with further expansion in its sights. To reach new viewers in Kenya, Tanzania, Uganda and beyond, Zuku TV is migrating its DTH package from SES’s NSS-12 satellite to SES-5 by yearend. In total, SES has no fewer than eight satellites beaming across the continent, Exciting times for Sub-Saharan Africa five countries). South Africa’s MultiChoice also owns DStv, its long-established pay DTH platform that controls valuable exclusive rights deals (such as live English Premier League soccer). Greater competition (especially from cheaper DTT players) led to DStv lowering prices to some of its packages. However, the launch of sister service GOtv gives MultiChoice the ability to target all demographics in the pay TV market. France’s CanalSat/Canal Plus Afrique is the other major regional pay DTH player, although it does not compete too much with DStv as they separately target countries with their respective languages. However, DStv faces more direct rivalry in East Africa from Kenya-based Wananchi Group. Wananchi is targeting the 15m TV households that it forecasts for East Africa by 6 AFRICA Briefing Sub-Saharan pay-TV revenues will reach $4.62 billion in 2018, up from $2.88 billion in 2012. DTH accounted for nearly all of the 2012 total, though pay DTT will make inroads (contributing $744m in 2018). South Africa will remain the dominant pay TV revenue generator. However, its share of the total will fall from 61% in 2012 to 47% in 2018. Excluding South Africa, pay-TV revenues will rocket from $1.12 billion in 2012 to $2.46 billion in 2018. IMPORTANCE. The importance of the