With streaming services today in a global race for eyeballs, market leaders such as Netflix, Disney Plus, and Amazon Prime Video have had to look beyond the borders of their home markets, especially with increased competition in North America and Europe.
With rapidly increasing internet connectivity in Africa, a youthful population, and a growing middle-class, Africa offers an opportunity for streaming services with positive growth prospects. Video-on-demand subscriptions in Africa are projected to hit 13.7 million in 2027 up from 4.89 million at the end of 2021 with revenues tripling from $623 million in 2021 to $2 billion in 2027.
Global market leaders are however not entering an unserved market. In Africa, they also face competition from platforms such as MultiChoice-owned Showmax which had over 861,000 subscribers at the end of 2021 in over 40 African countries and several more in the diaspora including the UK, France and Australia. This is in addition to legacy TV players that are also offering mobile subscription products.
Africa’s streaming market is mobile
Players on the continent are competing on several different fronts—including content and user experience, which includes data considerations and ease of payments in a complex market. In much of east Africa, mobile money is an overwhelmingly preferred payment option influencing consumers’ decisions when choosing streaming options and mobile broadband too is how most African users go online.
GSMA estimates that by 2025, there will be 613 million unique mobile phone subscribers—half of the population—meaning Africa is a mobile-first market. Cost of data will therefore be a key consideration for streaming companies. In South Africa, for instance, over 90% of the population has access to mobile internet while less than 10% of people have fixed uncapped Internet.
Local content is king
Over the past few years, streaming services including Netflix have opened up their eyes to the value that lies in producing local content, a departure from a time when they were more keen on promoting their most popular global titles in Africa and licensing a few local productions. Investment has been ramped up in different local reality shows, comedies, and dramas set across Africa.
This strategy is backed by data proving local productions’ popularity with audiences. On Showmax—whose catalog includes shows and movies such as HBO’s Emmy-winning Succession and Hollywood blockbuster Top Gun: Maverick—the most watched titles in 2022 were overwhelmingly local African productions.
“Showmax’s audience prefers local content, with seven of the 10 most streamed titles in South Africa, eight of the top 10 titles in Kenya and Nigeria, and nine of the top 10 in Ghana last year being African. This has been a key driver of Showmax’s growth,” the streaming service’s CEO Yolisa Phahle tells Quartz.
On the other hand, Netflix has since 2019 also been putting money behind African originals. Among them are the star-studded reality show Young, Famous and African featuring celebrities from across the continent, teen crime drama Blood and Water and Queen Sono, another crime drama, among several other titles. This is in addition to many more licensed older titles.
Recently, it has signed several multi-project partnership deals with leading African filmmakers and production companies. Its 2022/23 slate includes The King’s Horseman, the film adaptation of Nobel prize-winning writer Wole Soyinka’s play Death and the King’s Horseman. Others are Ludik, Netflix’s first-ever Afrikaans-language drama, African folklore inspired The Brave Ones and South African soccer drama Kings of Queenstown.
While Netflix’s global spending on content declined 5% in 2022, the streaming service is spending more than ever on African original content. According to Dorothy Ghettuba, Netflix head of African originals, they’re searching for Squid Game-like global hits from the continent.
“We believe that Africa is one of the major creative centers for great storytelling that resonates around the world, so it only makes sense for us to increase our investment with our slate, with an even more exciting slate,” she said in August last year.
In Africa, Netflix had an estimated 2.6 million subscribers at the end of 2021, or just 1.1% of its global subscriber base. The total number of Netflix subscribers in Africa is projected to grow to 5.6 million by 2026.
Showmax is proving to be one of Netflix’s biggest challengers in African markets including Nigeria, South Africa, Kenya, and Ghana. Its parent company MultiChoice also owns DSTV, the continent’s largest pay TV service with 22 million subscribers. This has given it something of an edge owing to its localized understanding of the market and access to a vast content catalog and broadcasting rights. According to the company, MultiChoice Studios is the largest producer of original content in Africa with over 73,000 hours of co-produced and commissioned titles in its library, in 22 languages.
Local content on Showmax ranges from reality shows such as Temptation Island South Africa, Big Brother, and Real Housewives franchises for Abuja, Johannesburg, and Nairobi, to hit series such as Pepeta, Crime and Justice, Blood Psalms, and Crime and Justice Lagos.
Its Showmax Pro offering incorporates news and popular live sports including the Premier League, La Liga, Serie A, and South Africa’s PSL among other sporting events, riding on MultiChoice’s control of the rights in Africa.
“MultiChoice has over 22 million paying subscribers across 50 countries in Africa, built up over nearly three decades. So Africans are used to paying to access films and TV shows,” Phahle says.
Canal+, ROK, Amazon Prime, Disney+
Vivendi-owned Canal+ is the largest Pay TV service in Francophone Africa, and also operates the VOD service MyCanal Afrique. To expand its African catalog and audience both on the continent and in the diaspora, Canal+ acquired ROK Studios from Nollywood-focused video streaming company IrokoTV in 2019 for an undisclosed amount.
ROK at the time had under its belt more than 540 movies and 25 original TV series. As part of the deal with Canal+, it would continue producing content for IrokoTV as well as several local and international Pay TV channels, including Canal+.
Amazon Prime Video has also been aggressively expanding in Africa; going on a hiring spree over the past two years, and signing partnerships with African producers to ramp up its local content. To tap into Nollywood, Prime Video is also “actively exploring the potential of a base of operations in Lagos.”
“We now have a dedicated local content strategy for the continent across the board, from originals to be developed and produced by Amazon Studios, to an exciting licensing slate with top-tier producers,” Ned Mitchell, head of originals for Africa and the Middle East for Prime Video and Amazon Studios, told Variety in February.
Disney+, one of Netflix’s biggest competitors internationally, expanded into several African markets last year, including South Africa, Egypt, and Algeria.
Streaming services are customizing for African audiences
Beyond content, customizing experiences for African audiences and adapting to market trends is also crucial for streaming services in the market. Netflix, for instance, rolled out its first ever free plan in Kenya in 2021 in a bid to get more people to interact with the service, designing it to encourage users to upgrade to the paid tiers.
“Content is key, but having an app built with Africa in mind also helps,” Showmax’s Phahle says. “Showmax was the first streaming service in Africa to make mobile downloads possible for offline viewing and to launch a mobile-only plan, and currently offers the lowest data streaming option on the continent.”
Legacy media companies in Africa have also entered the race with their own platforms attempting to gain a foothold. In Kenya, for instance, Royal Media Services (RMS) which runs the country’s most popular TV and radio stations, in 2017 launched ViuSasa, whose content is mostly local productions and music. In South Africa, public broadcaster SABC launched its own streaming service SABC+ in November 2022.
Mutana Gakuru, a producer and creative economist, says the increased competition is a net positive for African audiences as well as Africa’s creative industries. Competition creates more opportunities for everyone from actors to filmmakers among other professionals, and offers audiences greater variety, he says. The biggest losers, Gakuru says, are legacy media companies whose grip on news and entertainment is loosening fast.
He, however, argues that African filmmakers, actors and industry professionals should not hop on the streaming bandwagon simply to be on it, but should instead ensure that their deals reflect the industry’s massive growth.
“Overall the effect is positive because there are more opportunities for creatives. More shows require more people developing specialized skills. Competition is providing more opportunities at a large scale and provides for a lot of livelihoods, but streaming services don’t necessarily pay more than the traditional TV stations. It’s like changing employers, the good thing is streaming services are commissioning several productions, sometimes as many as 120 episodes at a time, and this creates a lot more opportunities than there were previously.”