Dear colleagues and friends,

As many countries around the world get into full lockdown mode, African reactions to the crisis are running the gamut from the perplexingly laid-back to the aggressively proactive: In Nigeria, fashion prevails, while Senegal draws praise for its partnership with the UK to develop a hand-held test kit, and Kenya shuts down schools and air travel after only 3 identified cases.

The situation is evolving rapidly, and it’s now clear that things will get worse before they get better. In any case, as long as there is still some activity in the African Entertainment space, HUSTLE & FLOW will continue. This week we have a little bit of everything, but we’ll dig deeper into challenges and opportunities in the Broadcast space.

Thanks to your referrals, the audience of this newsletter has already grown by 50% as it celebrates its first month. As always, to get added to the mailing list for HUSTLE & FLOW, share feedback, comments or questions, just drop me a line at marie@restless.global.

A note to the newcomers: First of all, welcome! Now, if you’re suddenly finding yourself with extra time on your hands and want to catch up on previous editions of HUSTLE & FLOW, they are now available at www.restless.global/hustleflow (pw: hardouthereforapimp).

Happy reading to all,

Marie

FASHION

Senegalese ready-to-wear fashion label Tongoro, founded in 2016 by Sarah Diouf, is named one of Fast Company’s most innovative companies for 2020. Tongoro shot to prominence after Beyonce wore its designs in her music video for “Spirit”, the first single of her Lion King: The Gift album (a phenomenon in itself and the continuation of the Black Panther, well, spirit). Sarah Diouf has proven herself to be a very savvy entrepreneur and marketer, and she is clearly someone to back.

MUSIC

Afrobeats superstar Burna Boy is having a great year. After his 2020 Grammy nomination for Best World Music Album (which he lost to Angelique Kidjo), he recently distinguished himself as he first Nigerian artist to sell out a total of 15,500 tickets in the French cities of Paris, Lyon and Marseille. An impressive performance which, once again, speaks to the power and influence of Nigerian artists on the global scene, no matter the language.

It’s no surprise then that YouTube is now finally rolling out YouTube Music and YouTube Premium in Nigeria, with plans to launch in Kenya at a later date. The service was previously only available in South Africa. Both YouTube Premium and YouTube Music deliver an ad-free experience which enables downloads for offline streaming and access to YouTube original shows. Downloads have become a must-have feature for content platforms in Africa as it has proven to be an efficient way to bypass issues such as high data costs and slow internet (people use free wifi at the office or in public places to download and then watch later). Netflix implemented it back in 2016.

SPORTS

The Kenyan government has imposed a one-month travel ban on Kenyan athletes due to coronavirus. One might wonder where they would have gone though, as most international sporting events have been postponed or cancelled, leading some to ponder what a world without sports would look like. 

Still in Kenya, Quartz has a nice article about Enda, the country’s first performance athletic shoe company which was launched in 2016 but struggled to convince investors that Kenya could become an important manufacturing hub. Today its products are still partly made in China, although the goal is eventually to bring all production to Kenya. The idea of an athletic shoe and brand developed with the world’s top runners certainly appeals to me from a marketing point of view, and manufacturing in Ethiopia could be a good alternative. 

BROADCAST

Still on the topic of sports, pay TV giant MultiChoice, which built its continental dominance through a historic monopoly over sports broadcast rights, is getting seriously challenged on that point by governments in both South Africa (through the Independent Communications Authority of South Africa - ICASA) and Nigeria (through its National Broadcasting Commission). In 2018, MultiChoice made a case before ICASA against the breakdown of its sports monopoly, arguing that “the notion of "premium" content as "must have" is well understood to be obsolete”. Its presentation gives a fascinating insight into MultiChoice’s approach to its business, but quite a lot has changed in the past two years (Kwese has folded, Zuku is a shell of itself) so please don’t rely on this document for specific data.

The breakdown of sports rights monopolies may be bad news for MultiChoice, but regulating entities see it as a way to create more opportunities for local broadcasters. In Nigeria, the measure is part of a set of reforms to the broadcast sector that NBC started to implement this week. The reforms also include a new quota of 70% local productions, and various new regulations on online content, hate speech, and the issuing of licenses. Considering that practitioners of the Nigerian Broadcast industry already complain that their sector is over-regulated, will these new measures be a step in the right direction or will they just create a bigger mess? Time will tell. Otherwise, I actually believe that the Nigerian Free-To-Air market is currently underperforming, underinvested and undervalued and that it presents opportunities for experienced investors. More on this in next week’s HUSTLE & FLOW.

In addition to the sports rights issue, MultiChoice is also dealing with growing competition from Netflix and other platforms, and is speeding up its transition to streaming. Last week, MultiChoice made all its DStv channels available online to all subscribers for 3 days in an effort to drive the uptake of its DStv Now service (normally only available to premium subscribers). It was also a capacity test for its servers before it introduces a new, streaming version of its linear DStv service. 

According to a recent report by Digital TV Research, Pay TV will continue its growth in Africa with subscriber numbers set to increase from 30.7 million today to 47.26 million by 2025. However, revenue growth will be more muted as intense competition between major players MultiChoice, StarTimes and Canal+ but also OTT platforms drive prices and ARPUs down. I think Pay TV is a very, very difficult space. Many new players have failed over the past 15 years, with the exception of StarTimes which succeeded by driving prices to the ground. But that strategy can only work once and my feeling is that there is no more space for new entrants. 

FILM & TV

While country after country was going on lockdown this past weekend, Nollywood stars were strutting the red carpet at the Africa Magic Viewers Choice Awards (the African Emmys) in Lagos, which made for major eye candy. The AMVCAs, owned by the unavoidable MultiChoice, are Africa’s most glamorous Film & TV awards gala. I was lucky to win Best TV Series there back in 2013 with The XYZ Show, and that first trip to Lagos inspired my team and I to launch Ogas At The Top there a year later.

VIDEO ON DEMAND

Meanwhile, Netflix’s Africa expansion continues. The platform has signed a development deal with British-Nigerian actor John Boyega’s U.K.-based outfit UpperRoom to produce non-English language films from West and East Africa. UpperRoom’s Netflix slate already includes three features, two from Nigeria and one from Egypt, with the company to develop more projects based on African IP such as literary properties, remakes of Nollywood classics, plays and mythology. I can’t help but notice that Netflix’s first deals for Nigerian original content went to two filmmakers from the diaspora (Akin Omotoso has lived and worked in South Africa for many years). It also took Netflix a while to find these first projects. I believe this is due to the lack of development process and skills in Nigeria, which leads most producers to pitch their projects before they are ready. That’s one clear area in which investment in time and resources would pay off.

MOBILE VIDEO

And finally, to wrap up this edition of HUSTLE & FLOW, a follow up to last week’s conversation about mobile video models for Africa: Chinese short video/social media app TikTok has been investing quietly into African creators and influencers as part of a concerted strategy to gain a major foothold on the continent. Here’s a product that’s a perfect fit for Africa: from the app’s all-inclusive features, to its focus on dance challenges, its courting of local talents, and its partnerships with brands like Transsion’s Infinix, ByteDance (owner of TikTok) is getting a lot of things right.

EVENTS

Nope.