Dear colleagues and friends,

First off, my apologies for skipping one week out of my planned publishing schedule (this edition of HUSTLE & FLOW was supposed to go out last week). It appears that many months of intense work with no play, combined with a dragged-out house renovation and a move to a different country, have led me to one of those dreaded COVID burnouts. Something had to give. But I am back now and excited to share fresh business insights on African entertainment with you. 

As we near the end of August, it is still unclear what the post-COVID world has in store for us. While the United-States are suspended in a state of limbo until the November presidential elections, and Europe is delaying its economic reckoning until the end of its sacred summer vacations, worrying signs of where Africa may be headed have started to appear. 

Nigeria has always been a tough market for outsiders, the latest victim being South African grocery retailer Shoprite, which threw in the towel a couple weeks ago and is exiting the country. But in recent months, a series of decidedly non-business friendly new taxes and regulations are making even battle-hardened local entrepreneurs seriously question their ability to survive in that environment. Tech startups are moving out of Lagos to escape harassment by the state government, which also just imposed a new 5% tax on film production; the controversial new broadcasting code may succeed in driving Multichoice away; and cinemas still haven’t been allowed to reopen (but airports have). 

Meanwhile Ghana, despite being the seat of the African Continental Free Trade Area secretariat, is now asking foreign traders and investors for a minimum of $1 million in cash or equity for the privilege of doing business in the country. Another approach to alternative revenue generation is that of Kenya, where some $400 million in COVID relief funds seem to have found their way into the pockets of #COVID19millionaires. All that extra taxing and looting is probably not what experts had in mind when they recommended that African governments take advantage of the crisis to diversify their economies.

This week in HUSTLE & FLOW, I’ll talk about Ethiopia’s about-face on the highly anticipated opening of its telco space to foreign investors (the inward-looking trend is definitely in motion); Cairo’s upcoming Grand Egyptian Museum and its big bet on Tutankhamun to lure tourists back; and Burna Boy’s star shining bright as he releases his P. Diddy-produced album Twice as Tall.

Going forward, I will continue to release HUSTLE & FLOW twice a month, instead of every week, as this new format seems satisfying for you and more sustainable for me. As always, previous editions can be accessed here. Please do continue to engage by emailing me at marie@restless.global or by reaching out on LinkedIn, Instagram, Facebook or Twitter @marieloramungai.

Happy reading to all,


Marie

MOBILE

MTN Group has appointed CFO Ralph Mupita as its new president and CEO. A couple of weeks ago, outgoing President Rob Shuter had revealed the organization's plans to exit its Middle Eastern markets and focus on the pursuit of a panafrican strategy. In June, the company reported a 9.4% half-year revenue growth and an extra 11 million subscribers, bringing its total panafrican subscriber base to over 260 million.

Local reports suggest that the Ethiopian authorities are considering applying the brakes on foreign investments in its telco space, just after the government asked for bids for a 40% stake in national operator Ethio Telecom. As we discussed in previous editions of HUSTLE & FLOW, the opportunity to enter this previously locked down market had generated a massive amount of interest from a variety of industry players, including MTN, Orange, Safaricom and Helios Towers. However the process has apparently encountered strong opposition from Ethio Telecom itself, which had recently announced strong annual revenues of over $1.3 billion and the growth of its subscriber base to 46 million people, or just under half the country’s population. As of now, the entire bidding process seems to be on hold, to the dismay of foreign investors.

In Senegal, Free (formerly Tigo Senegal) was imposed a heavy penalty by the regulator for blocking the launch of virtual operator (MVNO) Promobile for more than a year, despite Promobile being authorized to operate on Free’s network. According to Promobile, Saga Africa Holding, the company which owns Free in Senegal, wanted to sell voice communications for three times the price that it charges itself and refused to allow future Promobile users to receive calls and SMS from outside operators. 

Finally, Safaricom seems to be the latest telco player to jump on the super app bandwagon as M-Pesa announced an upcoming consumer “lifestyle” offering, which will embed a selection of goods and services into its mobile-money app. The offer is expected to be launched first in Kenya within the next 12 months and then extended to other African markets. 


E-COMMERCE

Continuing on the topic of e-commerce, Ethiopia’s Bank of Abyssinia (BoA) and Visa have announced a strategic partnership to acquire payment gateway CyberSource, through which BoA will become a member of Visa’s global payments ecosystem. The partnership makes BoA the first bank in Ethiopia to support e-commerce by enabling businesses to accept online payments using credit cards. 

Less than a year after Jumia exited the country, Tanzania is ironically experiencing an e-commerce boom, courtesy of COVID. Multiple e-commerce platforms have sprung up, from food and grocery delivery apps like Piki to ‘online malls’ such as Duka.direct or Inalipa. The new services recognize that Jumia has opened the door for them by educating the market. However, contrary to the e-commerce giant, they are taking the approach to grow slowly and sustainably.


VISUAL ARTS

Over the summer, Le Monde has been running a multiple article series dedicated to African museums from Burkina Faso to Madagascar, including Ivory Coast’s first institution dedicated to contemporary cultures which opened recently in Abidjan’s popular neighborhood of Abobo. The museum is named after Adama Toungara, former minister of oil and energy, mayor of Abobo for almost twenty years, and one of the country’s biggest private collectors. Conceived by Ivorian superstar architect Issa Diabaté, the building offers a plurality of spaces designed to attract a diverse audience, with two exhibition rooms, painting workshops, media and book libraries and a space reserved for dance.


ARCHITECTURE

Al Jazeera has an in-depth profile of 84-year-old artist and architect Demas Nwoko, who was recently commissioned by the Nigerian government to design the new National Gallery in Abuja. For the past 60 years, Nwoko has developed and formalized a creative approach grounded in the knowledge of African art traditions, with the conscious addition of Western innovations where useful. Nwoko uses on-site materials such as laterite soil, trees and stones, which are resilient to the local environment and even become more beautiful with time and wear, and builds natural cooling systems through strategically placed ventilation portals. The result: his Ibadan home has never needed renovation or significant repair since completion in 1964.


HERITAGE

Cairo’s upcoming Grand Egyptian Museum is nearing completion and should open next year, after 8 years of work and multiple delays. The $1 billion, 500,000 square meters project is the size of a major airport terminal and was financed through loans from Japan. It will re-house and restore the country's most precious artifacts including the iconic treasures of Tutankhamun, which Egypt hopes will be enough of a draw to drive tourists back to a region which has suffered greatly from the double impact of the 2011 Egyptian revolution and this year’s pandemic.


FASHION

Loved Black is King? Looking to expand on the experience by acquiring some Beyoncé-approved African fashion? The singer is sharing her "Black Parade Route," a personal directory of Black- and African-owned small businesses curated by Queen Bey’s own stylist Zerina Akers, the founder of Black Owned Everything.

Not on the Beyoncé list however are Africain streetwear brands like Nigeria’s Waffles N Cream and Vivendii (which collaborated on a project with Virgil Alboh's Off-White and Nike) or Ghana’s Free the Youth, which are working hard to prove that there is more to African fashion than hand-made custom gowns and jewelry. Whereas the style has become mainstream in the West and in parts of Asia, in West Africa, where popular culture is largely shaped by the flamboyant Afrobeats party scene, streetwear (and its associated alté subculture - more on that below) conveys an aura of youth rebellion that may be closer to hip hop’s original roots.


MUSIC

On August 13, Nigerian megastar Burna Boy released his new album Twice as Tall, executive produced by none other than Sean Combs aka P. Diddy, and he “has the whole world listening” according to the New York Times. The album got over five million streams in just an hour after it dropped, and quickly reached number one in 31 countries. From the moment he sold out the Wembley SSE Arena in London in 2019, to his 2020 Grammy nomination, being featured solo in Beyonce’s Black is King, and now capturing the global charts, the 29-year-old artist has had one hell of a year, as I’ve written repeatedly in this newsletter. 

And he’s even got his name on the song of the summer - the remix of 2019 rhythmic South African gospel track Jerusalema by South African producer and DJ Master KG featuring vocalist Nomcebo Zikode, on which Burna Boy was called in to sprinkle in some Naija flavor. The result is so infectious that the song has reached every corner of the globe in the form of the #jerusalemadancechallenge. Master KG attributed the moves in the dance to a group of Angolan fans who put together a candid video, which quickly reached Portugal and then spread from there. 

The fact that Burna Boy calls his music Afro-fusion rather than the catch-all Afrobeats is a possible hint that the future Nigerian sounds to find success globally will be more diverse. On that topic, the French daily Liberation digs into the rising influence of Nigeria's “alté” subculture (The Guardian has a similar article here in English), which is carried by artists with different inspirations mixing jazz, r&b and hip hop, but who have in common to have broken out online and being committed to freely expressing their individuality in a culture that can be quite conventional.


DANCE

A couple of months ago, the video of a young boy ballet dancing, barefoot on raw concrete and in the rain, went viral with 20 million views worldwide. Since, then the internet has done its thing and changed the life not only of that boy (11-year-old Anthony Mmesoma Madu) but also of his teacher Daniel Owoseni Ajala and fellow students at Lagos’ Leap of Dance Academy, who have been offered resources and training opportunities by supporters from around the world. You can bet that it’s only a matter of time before this inspiring story finds its way onto the screens.


SPORTS BUSINESS

Global Pay-TV spending for sports media rights reached its apex with $48.2 billion spent in 2019 before the pandemic hit, according to sports marketing agency Two Circles. The company advises sports rights holders to end their current reliance on Pay-TV income, which is bound to decline, and transition to a ‘hybrid media model’ by developing new packages of content comprising live, near-live and non-live rights that can be commercialized through various media partnerships with free or paid linear or VOD services. Although this trend is likely to take some time to reach Africa, where StarTimes just announced the acquisition of the French-language broadcasting rights to the Spanish LaLiga and the UEFA Nations League, the signs of overheating are already there as Multichoice hesitates to renew its English Premier League rights in Nigeria, leaving the door open for more innovative deals.


BROADCAST

Still on the topic of African Pay-TV, Ndubuisi Ekekwe breaks down one of the major reasons (if not the major reason) why challengers have found it near impossible to build alternatives to Multichoice, and it has to do with how these businesses are financed. Indeed, Multichoice is backed by South African media and tech giant Naspers, “which has so much money that it could buy all the publicly traded stocks in Nigeria with just 30% of the Group’s market cap”, writes Ekekwe. This means that MultiChoice was not built with debt, while other players in Nigeria such as HiTv or TStv were saddled with 25% interest rate loans. “It is nearly impossible to grow faster than your bank interest rate. Yes, if the interest is 25%, it technically means that to have the capacity to pay that loan, you need to be hitting excess of 40%, on value creation. That is nearly impossible in a media business where leverageables are linear, not exponential. At 25-27% interest on debt, most businesses cannot survive and you will be a slave to the banks for life.” What Ekekwe says here is valid not only in the media space but for most businesses in Africa, and especially in the seed and growth phases.

Meanwhile, consulting firm Accenture is optimistic when it comes to the future of South Africa’s film and television industry, which it says has the potential to grow by close to $6 billion over the next five years by embracing digital technologies. That additional benefit could come from advertising revenue as well as investment in local film productions - particularly from global streaming platforms with deep pockets.


CONTENT DEVELOPMENT

Eighteen film or TV projects supported by the International Organization of La Francophonie (OIF) will be presented during the DISCOP AFRICA virtual market which will take place on October 28-29, 2020. The projects, which include 7 series, 7 feature films and 4 documentaries, are in various stages of development or production and have for the most part been structured as international co-productions between several African, Caribbean and European countries. The presentation of these 18 projects is organized within the framework of CLAP ACP, a program to strengthen South-South co-productions led by the OIF in partnership with FONSIC (Côte d'Ivoire), with financial assistance from the Union European Union and the support of the Organization of ACP States (Africa-Caribbean-Pacific).


VOD

Still in South Africa, Multichoice has finally introduced the much-awaited DStv dishless streaming service, which will enable subscribers to access its Pay-TV services directly through the Dstv app. The company confirmed that the DStv dishless platform would offer the same content and channels as the existing service. In case you weren’t sufficiently confused already, Multichoice also runs its standalone VOD platform Showmax, and recently rolled out two new offerings, DStv Explora Ultra, a new decoder with added features, and DStv Streama which lets viewers swap from DStv to Showmax or YouTube, making it a “one stop shop” for all things entertainment.

Talking about Showmax, executives at the company have announced that Multichoice’s hit show Big Brother Naija had "broken the record for the most-watched live-streamed entertainment show" on the platform. According to Showmax, "Nigeria accounts for almost 50% of the viewing hours, South Africa 30% and 15% from Kenya. Ghana, Botswana, Namibia and Uganda also see unusual viewing traffic for Big Brother Naija." The power of this show is currently without comparison on the continent. As I’ve said before, I believe this makes a strong business case for Netflix to get on the Naija-flavored reality show bandwagon now now.


SOCIAL MEDIA

Going viral today is truly like winning the jackpot. At least it’s how it must have felt to the Ikorodu Bois, the group of young Nigerian mimikers famous for humorously recreating the trailers of big productions such as Extraction or Casa de Papel, when they received a full film equipment package gifted by Netflix. They will also receive mentoring from star director Kunle Afolayan. The Ikorodu Bois’ Extraction video racked up 11.4 million views and more than 160,000 shares on Twitter, and received praise from star Chris Hemsworth and producers the Russo brothers, who also invited the group to the premiere of Extraction 2. No doubt that these ones are on their way.


ANIMATION

Leading Ivorian studio Afrikatoon has released King Keita, its new 26-episodes animated series recounting the adventures of Soundiata Keita, the Emperor of Mali who, after his accession to the throne, will have the onerous responsibility of implementing the “Mandé Charter”, the new rules decreed by him. 


COMIC BOOK

And finally, Kenya’s The Nest Collective has released two digital comic books, based on the stories of traditional female leaders Mekatilili wa Menza and Wangu wa Makeri. Over the years, the Nest has built a certain expertise in narratives that focus on women, sexuality or gender, and their diverse portfolio of works (spanning film, fashion, photography and more) is worth checking out if you are interested in these topics.