Can They Compete With Local Players? – Deadline

Africa is one of the fastest growing continents on the planet so it’s no wonder that global streamers have viewed the vast territory as the last frontier of growth in recent years. A young population coupled with a growing middle class and increasing internet connectivity (albeit the latter very slowly) has seen companies like Netflix, Amazon Prime Video and Canal+ battle it out with more established local players such as MultiChoice’s SVoD platform Showmax.

According to a report from Digital TV Research, Africa is expected to reach 18 million SVoD subscriptions by 2029, up from 8 million in 2023, bucking the U.S. trend. These are encouraging figures for global players who are already well established in Western and European countries.

While there are of course challenges (more on that later), what has become clear is that in  order to harness even a portion of Africa’s 1.2 billion population, you have to give the audience what it wants: local content.

And that’s what the major streamers in the market have been rolling up their sleeves to do. In the last few years both Netflix and Prime Video have been keen to establish themselves in the market and have been making homegrown series and films across the continent in the hopes of competing with local players. 

“Growth in Africa has been a priority since we opened in the market in 2016,” says Ben Amadasun, Director of Content for Netflix in the Middle East and Africa, which launched its first African original Queen Sono in 2020. “We’ve been investing in great local stories and creatives in the market in the last four years and even from the time we started Queen Sono, we have really seen the impact of African storytelling in the continent as well as beyond.’

In 2022, Prime Video signed its first African content deal with Nigerian production outfit Inkblot Studios in a move that it hopes will expand its footprint on the continent. It also signed a three-year deal with Sugar Rush and Isoken creator Jáde Osiberu, which includes original scripted dramas and feature films from her Greoh Studios This year, the global streamer launched its first African original movie Gangs of Lagos before it brought aboard former Multichoice Group exec Gideon Khobane as director for Prime Video Africa. The seasoned industry boss is overseeing what Prime Video describes as “continued, long-term investment in sub-Saharan Africa.”

“Amazon sees that Africa is a great opportunity for growth, just like any other territory such as southeast Asia, Latin America as well,” Khobane says.

But these players are not coming into an underserved market: African pay-TV giant MultiChoice launched its streaming service Showmax eight years ago in South Africa and now operates in 50 countries in sub-Saharan Africa. It has offices in South Africa, Nigeria, Kenya and Ghana and is the biggest producer of African content in the last three decades, creating 6,500 hours annually. Marc Jury, CEO for MultiChoice South Africa and interim CEO for Showmax says that figure “will double in the next three years.”

“The number of Showmax originals we are producing is growing rapidly,” Jury says. “Series on Showmax were some of the biggest winners at the most recent AMVCAs in Nigeria, SAFTAs in South Africa and Kalasha Awards in Kenya — so we’re winning the local content game.”

The streamer’s most popular series to date is The Wife, which has been viewed more than 50 million hours. The project follows criminal family the Zulu brothers and the women they marry. Showmax has content in more than 20 African languages and other projects include The Real Housewives of Lagos, drama Adulting, true-crime series Rosemary’s Hitlist and Devilsdorp. Last year, seven out of the 10 most-watched shows on the service in South Africa were local shows while in Ghana, nine out of 10 were local hits while Kenya and Nigeria each saw eight.

Showmax also has a strong sports presence and recently obtained rights to the English Premier League soccer games. Last year, Comcast’s NBCUniversal and Sky stuck a deal with MultiChoice for a content partnership, seeing NBCU take a 30% stake in the company for a new Showmax group, which is revamping and preparing for launch in March 2024.  These kind of offerings plus third-party content from HBO, Warner Bros International and Sony, say Jury, have seen Showmax subscribers increase by 26% year-on-year for the last four years. Moving forward, the company’s key focus will be on South Africa, Nigeria and Kenya, it says.

Territory targets

Netflix and Amazon Prime Video, however, are putting their efforts into growth in South Africa and Nigeria to start, mainly because production infrastructure is strong in both. Amadasun says that Netflix is also licensing titles across countries such as Zimbabwe, Senegal and Zambia.

“We’ve had some really interesting titles that have come from those markets, which have travelled such as Can You See Us? which we launched recently about a person living with albinism and it was very impactful in terms of our members,” he says. “It was consumed in its local country in Zambia but also all across the region in countries like Nigeria, Kenya and South Africa so we’re very encouraged by that. We’ve been very happy with the growth we’ve seen in key markets.”

Netflix recently released new young adult series Miseducation from Burnt Onion Productions (How To Ruin Christmas) and is set to release Season 3 of pan-African reality series Young, Famous & African.

For Prime Video, Nigeria and South Africa are the key targets for now. “We are looking at the broader continent but those analyses will be made at a later date,” Khobane says. “Nigeria is a vibrant filmmaking industry so we license a lot of those movies straight from theatrical releases, but we are also creating our own local content.” 

He points to crime drama Gangs of Lagos, as a show that did “particularly well” as well as recently launched series She Must Be Obeyed and upcoming South African original LOL: Last One Laughing, an unscripted comedy series hosted by Trevor Noah.

As ever, the hope is that local content will travel, such as Netflix’s Blood & Water, which the streamer says fared “very well” in South Africa and then traveled broadly within the rest of sub-Saharan Africa and beyond to big territories like the U.S., UK and France. Nigerian crime thriller Blood Sisters also was a strong series for African audiences on the streamer.

Vivendi-owned media group Canal+ (which has just over a 30% stake in MultiChoice) has taken a different approach, focusing its efforts on the 29 French-speaking countries on the African continent as well as some non-francophone countries such as Sierra Leone, Nigeria, Ghana and Cape Verde. It’s been showing its muscle by trying to grow subscribers to its satellite platform Canal+ Afrique. In 2019, it acquired production, content distribution and channel assets of iRoko Partners. (Canal+ declined to contribute to this article).

But there’s a difference between what’s going on in the English-speaking countries versus the French-speaking countries, says Simon Murray, principal analyst at Digital TV Research. He points to Canal+’s recent decision to offer its SVoD service for free to existing satellite TV subscribers as an interesting sign of how some streamers are viewing growth potential.

“Canal+ gave up the idea of making any money out of SVoD,” he says. “Meanwhile, U.S.-based platforms are being questioned by the financial analysts about how much money they’re making from new services so the currency — which used to be subscribers — isn’t the same.”

As for other international entrants to the market, Disney+ expanded into several African markets in 2022, such as Egypt, Algeria and South Africa. The streamer made its 10-part anthologies series Kizazi Moto: Generation Fire, a pan-African animation. “But Disney+ has yet to really show it’s hand,” says Murray. “And I think it’s going to be limited to South Africa and Nigeria.”

Africa is booming but “from a very low base,” Murray says.

The challenges

“There are quite a few obstacles to overcome before we get toward penetration,” he says, pointing to issues of poverty and a lack of fixed broadband. “People have to be more pragmatic about how they approach it and realize that there’s not going to be loads of money coming very quickly. You have to take a long-term view and you have to establish a presence there if you want to make any money.”

Jury notes that it’s been “a tough time for our South African audience” across the last few years. The market was hit badly after Cape Town’s drought from 2015 and 2018 was followed by the Covid-19 pandemic, an electricity crisis and 10 consecutive interest rate hikes.

“We’ve had to really innovate to sustain our growth,” says Jury, adding that Africa is “not a simple place to do business.”

“You can’t take for granted things like credit card or internet access or reliable power,” he says. “MultiChoice has learnt those lessons over the last three decades. Showmax was built with these realities in mind and was the first streaming service in Africa to make mobile downloads possible for offline viewing and the first to launch a mobile-only plan. Showmax also introduced the lowest data streaming option on the continent and accepts payments in most local currencies and payment platforms.”

The issue of broadband connectivity in Africa is a huge challenge. Khobane says that household broadband is much less compared to the U.S. or Western Europe and most streaming happens on a mobile phone.

“Africa has one of the highest levels of mobile penetration in the world so young people are online in many countries and there are more people with mobile accounts than the people in the population, which tells you that our role really is to work with telcos across the continent to say it’s in our interest to help digitize Africa,” Khobane says.

“Because when we digitize Africa, all kinds of commercial transactions can take place. And that’s what young people are looking for so our efforts in the sphere is to really work with telco operators.”

Prime Video has worked with MTN in Nigeria, one of the biggest telecom operators in Africa, as well as Vodacom in South Africa and Khobane says that the company is “working with many others across the continent to make sure that we can create bespoke partnerships that can offer trials to our customers at a subsidized rate.

He adds: “We recognize that we can’t wait for the infrastructure challenges of fiber into the home because that will take forever but we understand that Africans are all on their mobiles and mobile penetration is very high so that’s why it’s in our interest to make sure that we partner with the telcos in Africa.”

There’s also the issue of scaling up the sector’s talent pool. According to Amadasun, “the biggest areas we face challenges in are mainly in that production skills area. But we are continuing to invest in guiding and growing and nurturing the talent pipeline.”

Netflix recently partnered with UNESCO for a short film competition called African Folktales Reimagined, to promote African cultures by retelling folktales for modern and global audiences while supporting young talent in the business.

Furthermore, the advertising market in Africa is a small one which contrasts to other markets such as India, where platforms are cheaper because of the advertising model. And budgets are not as high as in other continents. “Budgets remain a challenge in Africa, but we are increasingly co-producing with international partners, which is allowing us to work at higher budgets than ever before,” Jury says.

What is clear is that Africa has a wealth of content and new stories but there is a long road ahead and entrants into the market need to be there for the long-game.

“We don’t want to rush the process,” Khobane says. “We want rich, multidimensional stories and we will invest in stories with young producers, emerging producers and seasoned producers to make sure we are actually able to create stories that are authentic and that will delight    our customers.”

Jury adds: “The content that resonates the strongest with our audiences isn’t always the biggest budget content — it’s the content that feels the most authentic. We have great relationships with our local filmmakers because we’re empowering them to make content for their communities, in their local languages, without the need to overexplain or dilute anything. And there’s something incredibly exciting and freeing about that.”