market overview_overview 30/10/2014 16:13 Page 2
MARKET FOCUS
off their analogue terrestrial TV
signals as a result of a lack of
awareness amongst the public that
analogue switch-off is impending
and inadequate funds being made
available by governments to roll
out digital TV infrastructure; and
insufficient supplies of set-top
boxes.
According to Ovum this is
despite the mindset, prevalent
among many governments and
regulators in the region, that the
deadline must be met at all costs.
As a consequence, numerous SubSaharan TV markets are
considering switching off analogue TV signals
before the audience has transitioned to
digital. This would mean many homes will
lose TV reception, leading to advertisers
switching away from TV and, in turn, a
decline in TV advertising revenue.
According to Thomas, in Tanzania, the
switchover process was pushed through
recklessly, with damaging results.
“Thousands of homes lost their ability to
watch TV and advertising revenue suffered as
a result. But this mentality to rush the
process persists, not least in Kenya which
seems intent on repeating the same
mistakes.”
Ovum research also found an
understandable eagerness among regulators
to raise revenue from the sale of the
spectrum that will become available
following analogue switch-off and which will,
most likely, be snapped up by mobile
Insider's
View
Lindsey Oliver, chief
executive officer of
Africa Media
Distribution, an
international
distributor of thematic
channels, offers her
thoughts on the Africa
market.
l Africa, as a continent has,
for decades, been overlooked
by international distribution
companies but now these
very same companies vie to
secure contracts to provide
content to the rapidly
growing middle class
population.
operators. This is another factor behind the
rushed switchover.
Ovum’s Ismail Patel, who tracks media
and entertainment across the Asian, Middle
Eastern, and African regions, noted that
while the sale of spectrum would benefit the
mobile sector, regulators could harm the TV
business if they act with undue haste to get
their hands on potentially lucrative
spectrum. “African governments and
regulators need to accept that the 2015
deadline will be missed and shift their focus
on to getting the process completed as
quickly and efficiently as possible. Ovum
believes that forcing through analogue
switch-off is ultimately counter-productive.”
Ovum also reveals that initial digital
terrestrial TV (DTT) launches are dominated
by the pay-DTT services of the operators
StarTimes and Multichoice. This has created
a sector where the paid-DTT option
l TV production and
distribution companies are in
a race to control key African
markets to satisfy the soaring
demand for programming
fuelled by the continent's GDP
growth, which will translate
into swelling household
incomes.
l Great potential lies in
Nigeria and Kenya. Nigeria
had only 1.8m pay-TV
households by the end of
2012 while Kenya had only
232,000 which compared to
national populations of 173
million and 44m, respectively,
represents huge potential for
growth.
l Satellite TV subscriptions in
Sub-Saharan Africa are
expected to leap to more
than 25m by the end of the
represents an artificially high percentage of
total homes using DTT to receive TV – a
potential problem because people will be less
willing to transition from analogue to digital
TV if they believe this will mean they have to
start paying for TV. The result is that more
than 90% of terrestrial TV was still analogue
at end-2013.
According to Thomas, this early focus on
pay-DTT has created a misconception among
the sub-Saharan audience that DTT is
intrinsically a paid service. “Once there is
awareness that DTT can be received without
payment, then free-to-air DTT will be the
overwhelming choice for most homes and the
transition from analogue to digital will be
better placed to proceed. This may mean
StarTimes and Multichoice will be
disappointed with the number of pay DTT
subscribers that they can ultimately attract,”
he advised.
decade. Expansion will come
from the rapid growth of
uptake in Nigeria, where
satellite subscribers are set to
triple to more than six
million, combined with other
developing markets such as
Kenya, Tanzania and Uganda.
As the reach of television
increases, so too does the
appetite for new channels and
interesting content.
l It is the responsibility of
companies such