Dear colleagues and friends,
A new month has started, for many the second or even the third spent in social isolation, and the coronavirus continues its steady reshaping of our world.
While the health situation shows slow, incremental progress in Europe and parts of the US, in Africa some are starting to wonder where exactly is the disaster we’ve been promised for weeks. At the time of writing, there had been 1,801 COVID-related deaths on the entire continent (most of them in Northern Africa), according to the African CDC. That’s 60% less than the number of COVID deaths currently being recorded in the US per day. In Africa, that’s just any other Tuesday. Sure, the worst could still happen. But maybe it won’t.
For Senegalese economist and writer Felwine Sarr, the widespread belief that Africa will be hard hit by the disease shows the persistence of Afro-pessimism in the global discourse. “Negative representations of Africa are so entrenched that you don't even bother to look at reality. And when present reality goes against representations, we then move them into future time. Even if the continent is doing quite well, we must predict a disaster. Everything, except admitting that Africa is doing well against the COVID-19. Currently, the new narrative is to say that there may not be a disaster but that we will starve to death because of the economic crisis. Always the same miserable image.”
HUSTLE & FLOW is a place where we look at the other side of the story. This week, among other tidbits I’ll talk about Safaricom’s continued, unchallenged dominance of the Kenyan mobile market, Nigerian fintech startup Flutterwave’s clever foray into e-commerce, and the COVID-sponsored preview of The Future of Film Distribution, which might look like a horror movie to some but that I am inclined to see more as a thriller.
Continue to engage with me by emailing me at marie@restless.global, or writing me @marieloramungai on LinkedIn, Facebook, Instagram or Twitter if you prefer (no, I am not on Tik Tok). And if you have subscribed recently and want more HUSTLE & FLOW, you can catch up on previous editions at www.restless.global/hustleflow.
Happy reading to all,
Marie
GLOBAL RESCUE MEASURES
European leaders have pledged to raise €7.5 billion during an online conference taking place today May 4th, as part of an “international alliance” that aims to “bring together the world’s best – and most prepared – minds to find the vaccines, treatments and therapies we need to make our world healthy again”. This effort would include the “strengthening the health systems that will make them available for all, with a particular attention to Africa” (they haven’t read Felwine Sarr).
The Facebook Journalism Project (FJP) announced a $390,000 investment to support African journalists during the COVID-19 crisis, split between $140,000 in grant money for South African news organizations that will be channelled through the International Center for Journalists, and a $250,000 video training programme for 10,000 video journalists across the continent. Facebook also committed $100,000 to fund a Video Storytelling Fellowship in Kenya this year.
The Bamako-based African Culture Fund is launching the SOFACO project, a solidarity fund for African artists and cultural organizations to support “resilience and artistic creation” in the fight against COVID-19. More information should soon be posted online.
INTERNET INFRASTRUCTURE
I’ve already talked about the major investment opportunity presented by the boom in demand for data centers services in Africa (which is rising two to three times faster than supply, according to research by Xalam Analytics) in previous editions of HUSTLE & FLOW. This week, Quartz has a great in-depth article about Amazon Web Service’s roll out of its first Africa data centers in Cape Town last month. While Amazon has been present in Africa for 15 years, it has so far chosen not to operate its e-commerce platform on the continent, focusing instead on the much more profitable web services business. While African numbers are always hard to come by, AWS’s just-released global Q1 results showed a 33% growth in revenue to $10.2 billion (around 13.5% of Amazon’s total revenue) thanks to increased traffic to clients such as Zoom and Netflix during the global lockdown, illustrating what will be a long-term trend for Africa as it already is in the rest of the world.
MOBILE
Kenya’s leading mobile operator and national treasure Safaricom wins the gold star this week with a slew of positive news. First, by comparing Safaricom’s 2019 results of $2,3 billion to the combined revenue of $2,7 billion for all Kenyan telcos, Techweez showed that Safaricom was responsible for a staggering 86% of the total revenue in the Kenyan mobile industry last year (as in previous years). Perhaps even more impressively, Safaricom made roughly the same amount from mobile data alone ($336 million) than the rest of the industry generated overall ($372 million). This number also represents a 12% increase for Safaricom in mobile data revenue, which can be attributed to the growth of 4G smartphone use and the introduction of more favourable data packages that included non-expiry data plans.
On the back of these results, Safaricom announced a device financing plan called Lipa Mdogo Mdogo (‘pay in instalments’), which will allow rural and low-income subscribers to switch from 2G phones to smartphones by paying a daily fee of $0.19. The program is currently being piloted in partnership with TeleOne and Google, with the objective to provide access to 4G smartphones to one million customers. Not stopping there, Safaricom also launched a new partnership with Visa to develop products that will support digital payments for M-Pesa customers. Subject to regulatory approval, the wide-ranging partnership would cover over 24 million M-Pesa customers, more than 173,000 Lipa Na M-Pesa merchants from Safaricom, more than 61 million merchant locations throughout Visa’s global network, and over 3.4 billion Visa cards in more than 200 countries and territories. Although Safaricom has been for several years facing criticism by competitors over its monopoly of the market, and even calls for its business to be split, so far the Competition Authority of Kenya has sided with the operator, agreeing with its argument that its “dominance position (has) been acquired through innovation”.
VISUAL ARTS
Still in Kenya, Al Jazeera looked into how visual artists are coping with the COVID crisis. Besides the shut down of galleries which limits their ability to sell, artists are also struggling to find the materials they need to produce their art due to the closing of art supply shops. The unavailability of art material and art tools in Africa is something few people are aware of, but it’s one crucial challenge in the typical journey of most African visual artists. When we started The XYZ Show in 2009, my team and I not only couldn’t source technical material like foam latex locally (we ordered it from Germany), but we also couldn’t find basic clay sculpting tools, because Kenya’s sculpting tradition was based on soapstone carving and not clay. So we had to make our own tools. Over the years, I also used my travels to bring back fabric gloves (to use inside the puppets’ hands) gifted by our friends at Les Guignols, art or history books, and Japanese drawing pens for my co-founder, the cartoonist Gado, who has a great profile in The New York Times this week. But as Plato said, necessity is the mother of invention, and after teaching ourselves how to overcome these obstacles, we were then able to train others.
E-COMMERCE
Nigerian B2B payments startup Flutterwave has launched Flutterwave Store, an eBay-inspired portal for African merchants to create digital shops to sell online, with pickup and delivery handled through partnerships with local logistics providers, such as Sendy in Kenya and Sendbox in Nigeria. Although the product had been in development for some time, Flutterware accelerated its launch to help SMEs and traders move their businesses online in response to the COVID crisis. This seems like a pretty smart move by one of Africa’s most successful fintech startups, which processed 107 million transactions worth $5.4 billion in 2019. Recently Flutterwave also established partnerships with Visa, Alibaba’s Alipay and Worldpay FIS, and just raised a $35 million Series B, so they have all the tools to make this work.
Flutterwave Store is not the only option for small vendors to open online shops in Africa. Facebook Marketplace is available in Nigeria, for example, and of course there’s Jumia Marketplace. Talking about Jumia, former BBC Africa Business editor Larry Madowo released a sharp piece this week entitled “Jumia: The e-commerce start-up that fell from grace”, in which he analyzes the platform’s rocky year since its introduction on the New York Stock Exchange. As I’ve written before, this global lockdown might be the “now or never” moment for Jumia. I was even rooting for the team to succeed after the departure of Rocket Internet. But one particular bit of information in Larry’s article left me doubtful: in 2019, Jumia’s two co-CEOs (both French) and its CFO collectively earned $5.3 million while the company’s losses rose 34% to $246 million, “the eighth straight year without profits”. As most seasoned African entrepreneurs know well, one of the keys to success in a low-margin market such as Africa, in good times as in bad, is to strictly control the burn rate. If Jumia’s leadership doesn’t understand that, it doesn’t bode well for the company’s future.
MUSIC
Tributes have been pouring out from around the world following the (non-corona-related) death of legendary Nigerian Afrobeats drummer Tony Allen last Thursday, aged 79. Allen started playing with Fela Kuti in the 1960s and recorded over 30 albums with him and the Africa '70 band, prompting Fela to say that "without Tony Allen, there would be no Afrobeat." Allen formed his own group in 1979 and developed a new polyrhythmic sound which he called "afrofunk," before moving to Paris and collaborating with a number of renowned African artists, such as the late afro-jazz pioneers Manu Dibango or Hugh Masekela.
Over on the francophone side of the continent, Canal+, its African channel A+, and sister company Universal Music Africa will be holding a major online musical event dubbed “Africa at Home, Together against Corona” on May 16th, with contributions from leading artists such as Fally Ipupa, Kiff No Beat, Magic System, Vegedream, Singuila, Toofan, Locko, Serge Beynaud, Tenor, and Hiro.
SPORTS
The Last Dance, the ESPN/Netflix 10-part series about Michael Jordan’s final season with the Chicago Bulls, has become the world's most popular documentary in the two weeks since its debut. According to Parrot Analytics, The Last Dance has surpassed Tiger King as the "most in-demand documentary in the world" on Netflix (restoring my faith in humanity), while also ranking as the most-watched documentary series in the history of ESPN. Adding to the thrill, the series was released early to take advantage of the pent-up demand for sports content during the global lockdown, despite the fact that the crew still hadn’t finished putting together the documentary. The team is scheduled to finish the final episode on May 10, just a week before it is due to air on ESPN on May 17.
FILM
With the film festival calendar thrown into chaos by COVID-19, the Tribeca Film Festival and YouTube have partnered to present a 10-day online showcase dubbed We Are One: A Global Film Festival, with the support of 20 other global festivals including Cannes, Toronto, Sundance and Venice. The online event will kick off on YouTube on May 29th with a lineup of films (largely expected to be library titles and not new movies), shorts, documentaries, music, comedy, and talks.
Cannes festival darling Rafiki, a film on a young lesbian couple in Nairobi by Kenyan director Wanuri Kahiu, remains unscreened in Kenya as its ban was upheld by the country’s High Court last week. The judges ruled that the Kenya Film Classification Board’s ban on the 2018 film "does not in any way violate Artistic Freedom of Expression, but instead protect the society from moral decay." This is not the first time that an LGBTQ film is censored in Kenya, or elsewhere for that matter. In fact, local cultural sensitivities and strict censorship laws routinely limit filmmakers and artists’ ability to tackle subjects such as homosexuality, religion, and politics across the continent.
FILM DISTRIBUTION & VOD
Meanwhile, the future of global film distribution is happening right in front of our eyes. Last week, Universal revealed that Trolls World Tour, the sequel to its 2016 animated movie, did better in its first three weeks of VOD rental than the original film did over its entire five-month run in US cinemas. With nearly 5 million unique rentals since its April 10th debut amounting to $100 million in digital rental fees, and without the need to split revenue 50-50 with theaters, Trolls has already generated $77 million in revenue for the studio. The theatrical exhibition world has long feared (and fought against the idea) that bypassing theaters might become a viable model of distribution for studios - and here it is. AMC Theatres, the world's largest cinema chain which just stared bankruptcy in the face, swiftly announced that it would no longer play any of Universal's films.
What does this mean for the future of cinemas in Africa? Well, first of all, out of Africa’s 54 countries, only South Africa, Nigeria, Egypt, Algeria, and Morocco have what could be generously called “proper” physical cinema networks. Everywhere else, the number of cinemas is insignificant. For countries that have no or almost no cinemas, the premium digital release of new Hollywood, Bollywood, and the rare local films is a no-brainer, especially considering the fast-tracked digitization of all economies prompted by the current crisis.
For the five countries mentioned above, the picture is more complicated, as they also have sizable local film industries that largely depend on local box office revenue to survive. Because of the overall stage of digital development that these countries are in (more specifically in terms of bandwidth, cost of data, ease of payment, disposable income, etc), digital revenue will not be immediately sufficient to replace box office revenue. This means that there is still a need to protect, and - in the case of Nigeria - grow, the local cinema networks, while preparing for the inevitable evolution of the market. At this stage, two clarifications are necessary. First, premium VOD (PVOD) refers to the early release of a film (at the same time as the cinema release or soon after), at a premium price ($19,99 in the case of Trolls), and on a transactional basis (the customer only pays to rent that one film, as opposed to an all-you-can eat subscription such as Netflix). Second, not all content is created equal. Some films can be well-suited to a digital-only release, if their budget is limited and they appeal to a niche audience. Others, which we could call “event films” or “blockbusters”, are more expensive to make and need to be exploited fully throughout all windows, in cinemas and online. This is why I believe that in order to get the best of both worlds, cinema exhibitors in these countries should aim to develop a mixed strategy based on the geo-blocking of specific locations. With this approach, new films would still be released in theaters, but also online on the exhibitors’ own platforms in areas, cities or regions that are not served by any cinemas.
To finish with VOD news this week, Nollywood platform iROKOtv, crushed between lower revenues from users paying in the devaluing naira and infrastructure bills to settle in dollars, has announced that it would furlough 28% of its employees in Nigeria. Meanwhile, streaming giant Netflix is going full speed ahead with its African expansion plans, renewing its first African original Queen Sono for a second season, greenlighting another African original, a South African dance drama called Jiva!, while bringing online African favorites such as Jerusalema, Intersexions, and Love is War.
COMICS
I’ll leave you with Roye Okupe’s YouNeek Studios, which quickly blew past its Kickstarter goal of $5,000 to raise over $13,700 for its new comic book project Iyanu last week. YouNeek is behind last year’s viral animation Malika, produced in partnership with Anthill, so they’re not new at this. There are still 26 days to go on the Kickstarter - chip in if you can!