Dear colleagues and friends,
In recent weeks, voices across the continent have risen in favor of African governments coming up with local strategies to the coronavirus crisis rather than replicating the prevention methods of wealthier countries. And now, this seems to be happening.
On April 20th, Ghana became the first African country to ease its lockdown, citing improved testing and tracking capacity and the "severe" impact of the restrictions on the poor. South African President Cyril Ramaphosa also announced an easing of the confinement measures from May 1st, and provided this week’s comic relief when he struggled to demonstrate how to put on a face mask on camera. It’s clear from this video that the man hasn’t had a good night’s sleep in a while.
And in Madagascar, President Andry Rajoelina launched Covid-Organics, a local remedy based on artemesia, a plant originally from China but well-known across Africa as a treatment against malaria, both in its natural form and mixed with other molecules in antimalarial drugs. Responding to the skeptical western media, a Malagasy summed up the situation in a viral Facebook post: “Our president proposed his solution on a Malagasy channel in Malagasy for Malagasy people. It does not concern you. In Madagascar, when our car breaks down, we don’t wait for the car maker’s diagnosis or for original parts to arrive, we fix it and we drive.”
In the Entertainment space like everywhere else, African entrepreneurs will also find ways to fix their businesses and keep going, especially since the vibrancy of the continent’s creative and cultural output remains undeniable. This week in HUSTLE & FLOW, the focus is on the music industry, with the announcement of two major news: Apple Music’s expansion to 17 additional African countries and Warner Music’s investment in Africori.
If you’ve missed a previous edition of HUSTLE & FLOW, you can always access the archives at https://restless.global/hustleflow. For questions, comments, or if you’re looking to brainstorm ideas on how to pivot your business or investment strategy in this new world, I continue to offer free 30-min sessions. Just hit me up at marie@restless.global.
Happy reading to all,
Marie
GLOBAL RESCUE MEASURES
Afreximbank rolled out a $3-million grant to support the African Union's effort to combat the pandemic, adding to its other relief initiatives including its $3-billion Pandemic Trade Impact Mitigation Facility and another $200 million set aside to finance the production of COVID-19 equipment and supplies within Africa.
Besides his meme-worthy masked performance, last week South African president Cyril Ramaphosa also launched a $26.3 billion rescue package, equivalent to 10% of the country’s GDP. Meanwhile however, South Africa’s film professionals have been complaining about the difficulty to access the $7.9 million relief fund promised to the sector because the requirement to show proof of lost contracts is too strict for an industry that relies majorly on verbal agreements.
And in Nigeria, ordinary Nigerians are stepping up to fill the country’s major social-welfare gaps. Some have set up food banks, including musician and Nollywood star Banky W, while a group of tech entrepreneurs from companies such as Hotels.ng, Iroko, or Paystack have teamed up to crowdfund We Are Together, a COVID-19 relief fund for Nigerians facing financial difficulties as a result of the pandemic.
MOBILE
Loon, the high-altitude 4G connectivity company for hard-to-reach places owned by Alphabet (Google), has launched the first balloons that will provide internet access to rural Kenyans, in partnership with mobile operator Telkom. The approval of Loon’s service deployment by the Kenyan government, which had been stalled for a while, was finally obtained a couple of weeks ago - no doubt thanks to the forced digitalization of many activities spurred by the COVID lockdown. The service should be turned on in the coming weeks once testing is completed.
In a similar drive to bring mobile connectivity to underserved areas, the Ghana Investment Fund for Electronic Communications (GIFEC) and the OpenRAN provider Parallel Wireless have partnered to deploy over 2,000 OpenRAN sites across the country. Approximately 1,020 communities in Ghana receive no mobile signal.
Meanwhile, in Nigeria Airtel is rolling out its Ultra Plans, which aim to offer Home Broadband services at discounted rates, and in Tanzania Tigo has launched a cross-border mobile money service that allows Tigo Pesa customers to send and receive cash from M-PESA in Kenya, MTN in Uganda and MTN and Airtel in Rwanda.
Increased capacity and lower prices for both internet access and mobile money services across Africa have already become silver linings of this coronavirus crisis. And for those of you interested in learning more about how mobile networks are built and managed, Safaricom has a great article on its company blog.
E-COMMERCE
In Nairobi, shoppers can now buy fresh produce distributed by Twiga Foods on Jumia Kenya, thanks to a new partnership between the farm produce aggregator and the ecommerce platform. This is just the latest example of a food retailer, supermarket or restaurant partnering with a logistics company to ease delivery of food across Africa in this new context of social distancing. For WeTrackers, what we are witnessing is more than just a trend but the real “unfolding of the African chapter of the food delivery business”.
FASHION
I continue to slowly make my way though the excellent Woven Threads program by Lagos Fashion Week, and this week I recommend this webinar with Tongoro founder Sarah Diouf on "How to Build a Direct to Consumer Brand". I've talked about Sarah and Tongoro before, and it truly is fascinating to hear about her journey, which took her from nothing to Beyonce wearing her designs in less than 4 years. Her business model, which is based on small-scale, sustainable production and online sales only, is particularly well-suited to the post-COVID world. She is definitely a creative entrepreneur (coming from a business and marketing background, she doesn't call herself a designer) to watch.
VISUAL ARTS
How are African visual art players holding up? Although galleries do worry about the loss of income, Valerie Kabov, Director of First Floor Gallery in Harare, argues that the African art world is in fact “much better positioned to address radical new circumstances than art sectors of the developed world.” Contrary to others, the African art sector is not “burdened by heavy operation costs, legacy infrastructure, over-regulation and conservatism of the older generation which makes implementation of new ideas difficult,” she says. “Most of us in Africa have started galleries in impossible situations and in impossible environments, so the notion that we don’t have means for hope is entirely untrue.”
MUSIC
As I said in introduction, the African music industry hogged the limelight this week, first with the announcement by the world’s third largest music company, Warner Music Group, that it had invested an undisclosed sum in Africori, a panfrican digital music distribution, music rights management and artist development company. The new deal gives Warner Music Group’s access to Africori’s catalog and network of 6,500 African artists and 700 independent labels, and enables WMG to establish a presence in many African markets for the first time. This is not, however, WMG’s first Africa move. Last year, it invested in Nigerian record label Chocolate City and signed a licensing deal with Chinese streaming service Boomplay, which covers multiple regions in Africa. A couple days after WMG’s news, Apple announced that it was rolling out its Apple Music service to 17 new African countries making it available in a total of 30 countries on the continent. Apple also seemed to recognize the growing role African music and entertainment would play in its global expansion, as it made a point of mentioning its locally-curated playlists Africa Now, Afrobeats Hits and Ghana Bounce in its press release.
Music streaming is still in its infancy in Africa (although less so than video streaming) in terms of usage and revenue, and the mass market remains dominated by ringback tones (RBTs). Indeed, the vast majority of digital music consumers still purchase individual tracks from their mobile providers to use them as ringtone or “waiting tone” for their callers, a service for which mobile operators take more than 50% of the revenue. However, with the maturation of the market the digital music landscape has been expanding. Boomplay, which raised $20 million last year, is the undisputed Africa leader with 36 of its 42 million monthly active users coming from the continent. Besides Apple Music and of course YouTube, other streaming platforms active in Africa are the French Deezer, Universal Music Group’s Digster, and several local services with telcos partnerships such as Safaricom’s Mundo or MTN Music Time, while world leader Spotify and Tencent-owned Joox are only available in South Africa, and Jay Z’s Tidal in South Africa and Uganda.
But for Africa’s digital music boom to happen, the various players will have to figure out how to offer affordable mass market music services beyond Spotify’s or Apple Music’s current “premium” offers, as well as how to work with telcos to achieve reach and ease of payment. “That’s when we expand from a best case scenario of 10 million users to 100 million,” says Africori founder Yoel Kenan. In any case, the availability of more music streaming services locally is a boon for African artists, who previously struggled with local music sales because of piracy. With lucrative live shows on hold for the foreseeable future, the time is ripe for artists, labels, platforms and telcos to focus more on maximizing streaming revenue.
SPORTS
The Ghana Premier League has been given a temporary relief as television rights holder StarTimes allocated $5,000 to each of the 18 clubs in the top-flight as a partial payment of the rights deal, despite the cancellation of all live games.
Meanwhile, sports leagues are trying hard to keep their fans entertained and engaged. The NBA has tapped South African music star Sho Madjozi to present its new weekly basketball and lifestyle YouTube show called “NBA Africa Game Time”, while Fifa is launching its inaugural Fifa eNations Stay and Play Cup, a 40-nation online tournament specifically created by the football federation and Electronic Arts for the lockdown period. Rapper Cassper Nyovest, cricket star Kagiso Rabada and Mamelodi Sundowns midfielder Sibusiso “Vila” Vilakazi will represent South Africa, alongside well-known gamer Thabo Moloi, who is the country’s current leading player on the Fifa gaming rankings on PS4.
FILM
La Fabrique Cinémas, a development program for filmmakers from the global South that normally takes place every year during the Cannes Film Festival, will still be happening, albeit remotely. Film projects from Mozambique, Senegal and Egypt have been announced as part of this year’s class, which will be mentored by Algerian-French director Rachid Bouchareb.
BROADCAST
Two of South Africa’s most popular TV series, Uzalo and Isibaya, are the first daily dramas in the country to run out of episodes due to the current national lockdown and the cancellation of all on-going productions. SABC’s Uzalo is the number one TV show in the country with an average viewership of 10 million, while Isibaya, DStv’s longest-running telenovela that airs at the same time as Uzalo, is watched by more than a million people.
In Hollywood, studios and producers are itching to go back on set and have been working on plans to establish a new, social-distanced way of doing business that would include strict new health and safety standards for cast and crew. Besides the additional cost that these measures will involve, the main sticky point remains liability, as insurance companies are for now refusing to provide pandemic coverage. It will be interesting to see how African productions will adapt to a world in which possible infection may remain a long-term threat. My guess is that South Africa will follow the new global industry measures, but that those will be largely impossible to implement in other countries.
VOD
Chinese smartphone company Huawei has launched its VOD service, Huawei Video, in South Africa, with an initial 10,000 hours of content and 30 million short clips. Huawei Video joins the now-crowded list of streaming services locally available in South Africa which includes Netflix, Amazon Prime Video, MultiChoice's Showmax and DStv Now, DEOD, PCCW Media's VIU, VodacomVideo Play, Acorn TV and Apple TV+.
But what’s more interesting in the VOD space this week is Netflix’s release of its quarterly earnings report and announcement of a record 15,8 million accounts added between January and March - more than double its own January projections (before coronavirus spread worldwide) of 7 million additional subscribers for the three-month period. Actually, 7 million is exactly how many new subscribers Netflix added in the Europe, Middle East and Africa (EMEA) region only, which was its top growth region over the period by far. The United States and Canada, Latin America, and Asia Pacific territories only contributed between 2,3 to 3,6 million each. Unfortunately, Netflix’s public financials do not give any breakdown per sub-region or country, so we don’t know how many accounts were added in Africa. Netflix did warn shareholders that it expected growth to be more subdued going forward, but nevertheless immediately leveraged these impressive Q1 results to raise $1 billion in debt to fund new shows.
If you’ve followed HUSTLE & FLOW from the beginning, you know that I believe Netflix has won the streaming war in Africa before it even began. I will spare my early readers and won’t repeat myself, but you can see some of my arguments here. I do also think there are still opportunities in low-cost, hyper local mobile video (with a telco deal, otherwise don’t bother if you’re not Instagram Live or Tik Tok) and possibly for a strong AVOD contender, although of course advertising-based revenue models are going to suffer for a while post-COVID. I like to keep an eye on the Indian market as AVOD is dominant there, but also because its current explosive growth was boosted by a drastic slashing of mobile data costs and an increase in digital payments adoption - two phenomenons that the COVID crisis is accelerating in Africa at the moment. Overall, at the end of 2019 India had 14 million subscribers, $856 million in revenue from AVOD services compared to $268 million for SVOD, and the country’s 40 over-the-top (OTT) services had spent an estimated $360 million on original Indian content that year. Of course this is small by American or European standards, but these numbers are the stuff of dreams for the African film and TV industry.
And finally, to wrap up this week’s HUSTLE & FLOW on a funny (and truly impressive) note, I’ll leave you with this Naija-style Casa de Papel remake by young superstar mimikers Irokodu Bois. Enjoy!