Streaming trends at AfricaCom
BLOG by Hans Belz, Account Manager, Switch Media
Last month, Hans Belz, who heads up our South Africa office in Cape Town, visited AfricaCom. Like many tradeshows around the world, the event suffered from the COVID quarantines but it has picked up over the last couple of years and is slowly building back to the size it was pre lockdown. Hans noted a couple of the big players were absent, including Ericsson. Traditionally a pure telecommunications expo, in recent years, AfricaCom organisers have widened the show’s remit to include TV and media but this hasn’t really taken off. AfricaCom now has to compete with Fame Week Africa, a show in association with MIP Africa, which launched three years ago and takes place in Cape Town, in September. This event is rapidly growing in popularity, and has become the predominant content and media expo for the region.
Amongst the interesting trends seen was a definite move from Capex to Opex models. Companies, either with content or wanting content, are trying to move away from large upfront costs and are looking for ways to revenue share, spreading costs on an Opex basis. AVOD is having a resurgence. Whilst traditional SVOD models are great for higher income households who can afford monthly subscriptions and are able to pay for quality content, in South Africa, the vast majority of the populace is in the lower earning segments. Subscription services for this demographic aren’t popular, which makes this market attractive to AVOD services providing tier-2 content.
Advertising companies are also struggling to see returns on dedicated AVOD services, which brings us onto everyone’s current favourite topic, FAST channels. Certain SVOD service providers are looking at options to generate critical mass on their platforms, and one is to bring in tier-2 content, on a AVOD basis, for free on their apps. The second is taking their SVOD premium content, putting it onto an ad-supported FAST channel and aiming for higher rates of advertising revenue. FAST is high on the list of priorities for some of the bigger telcos in Africa in 2024, with many in the process of setting them up for launch in early 2024.
Other than generating higher rates of advertising revenue, FAST channels also enable content owners to create tailormade channels, such as a Kids channel, thereby removing the issue of trying to search for content. The streaming services have an opportunity to upsell to their AVOD customer base in the future when the economy has settled.A highlight of the show, and what may prove to be a game changer within Southern Africa, is the Kayamandi Fiber Project, which launched last month and is the world’s first fibre-connected township. Together with multiple partners, including Nokia and investors, the Kayamandi Fiber Project has put together a package providing 250 Mbit/s uncapped fibre over a 5G network at R5 per day (US$0.26), which is really affordable.
It currently connects 6,500 homes in Kayamandi and the company has set a target to connect 150,000 homes by March 2025. By providing cheap, reliable and content ready connectivity, this opens a whole new massive growth market for content providers.
In conclusion, the insights from AfricaCom highlight a dynamic shift towards Opex, a resurgence of AVOD services, and the pivotal role of FAST channels in the evolving streaming landscape, while the groundbreaking Kayamandi Fiber Project emerges as a promising innovation set to revolutionise internet accessibility in South Africa.