Stephen Watson, MD of Discover Digital

The African market is significantly different from North American and European markets, so Over the Top (OTT) and Video on Demand (VOD) services for the continent cannot simply copy and paste models that have worked in the US and European markets.

This is according to Stephen Watson, MD of Discover Digital, an African OTT and VOD specialist company. Watson notes that streamed content is currently booming across the continent as people in lockdown both produce and consume video content.

“The COVID-19 pandemic is creating a whole new wave of thinking and illustrates the potential market for user- generated content. There has already been strong growth in short form and user-generated content in recent years, and now more than ever, we’re seeing that good content can be shot at home – without studios and production teams. Coming out of this, we will also have a far more digital-savvy consumer than before,” says Watson. “These developments can support the emergence of more viable, sustainable VOD and OTT services across Africa.”

“In Africa, telcos entering the VOD and OTT space in the past have tended to look at the likes of Netflix, hoping to emulate their success, but Africa is different. Here, even when telcos have zero-rated video streaming data, they haven’t been able to quickly scale up to millions of viewers. In Africa, it’s a long play with a lot of moving parts. You have to take into account key factors that are aligned with your audience’s interests, whether they are banked, and what your unique selling point is,” says Watson. Watson also points out that subscription pricing and payment models are challenges unique to much of the African continent. Africa is unique in that tablets and smartphones will be the first, and primary screens for many consumers, which points to the reality that high definition (HD) will not be a key requirement by most of the market in the foreseeable future.

With a presence and partnerships across several African markets, Discover Digital has found that local content and short videos are particularly popular among African audiences.

“Local content is crucial, especially music and comedy. Back catalogue helps to fill the shelves but only fresh, original and exclusive content pulls customers,” says Watson. “Because international content is expensive, aggregation and collaboration are key to realising a return on investment. If content is king, then data is queen. Data is the key driver of revenues for operators, and video is driving data consumption, but stand-alone VOD products do not sell well. Bespoke bundled offers that speak to African consumers’ needs and budgets, are critical.”

Linear TV also still has a place in Africa – more so than elsewhere in the world, Watson says. “African telcos need to be strategic in offering services they and their audiences can afford, and content that resonates with their audiences. For example, telcos should look to an affordable mobile quad play, offering combinations of voice, messaging, data, music and video, bundled along with devices. They could also incentivise the use of off-peak data for streaming, capped by time.”

Watson says the technologies used should also be designed for the varying conditions throughout Africa. “You need to think what will work best locally - you can’t just copy or accept global standards.”

“Players in this space will have the best chance of survival if they define their unique selling point and market value offering very carefully – especially the content offering and monetisation strategy, and if they create bundles with telcos to alleviate concerns about data costs. This takes time, so it is important to plan for this and ensure the runway is long enough,” says Watson. 

Watson concludes that VOD and OTT will continue to pick up across Africa, particularly as the cost of data drops and new innovative mobile payment options pave the way for simpler transactions for services.

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