HUSTLE & FLOW #11: Safaricom for the win, Flutterwave launches e-store for SMEs, Cinema exhibition meets its future, and more

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!

HUSTLE & FLOW #10: Warner Music invests in Africori, Apple Music expands to 17 African countries, insights from the Indian VOD market, and more

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!

HUSTLE & FLOW #9: “One World: Together at Home”, Instagram Live is the new TV, Africa's first lockdown series, and more

Dear colleagues and friends,

We seem to have now entered a new stage in this COVID crisis. After more than a month of confinement and with the fragile hope that the peak of the pandemic has been reached, European countries and American states are starting to consider plans to slowly re-open their economies. 

Meanwhile, according to experts and economists, Africa is either on the brink of a health, social, and economic disaster, or, with the myths of Western invincibility and Chinese dominance falling apart, presented with a major opportunity to finally complete the decolonization of the continent (and so, ultimately, a good thing).

Talking about China, it’s been fascinating to see the nature of Africa-Chinese relations evolve in the past couple weeks, starting with the shocking images of Africans being targeted and evicted from their homes in Guangzhou and the pushback from African governments, media and citizens, all of this taking place as negotiations over debt repayments were going on in the background. Indeed, not only is China Africa’s largest trading partner but it is also the continent’s biggest creditor. For now, China has indicated it will only consider potential debt relief measures on a case by case basis.

In any case, it is clear that turning inwards to develop local or regional skills, markets, and value chains will be crucial in a post-COVID world. But in the meantime, the only playground available for the African Entertainment sector is the internet. This week in HUSTLE & FLOW, I'll talk about how some artists have been building massive new audiences on Instagram Live, which is fast becoming the new television, and we'll get a sneak peek at Africa's first self-shot lockdown series.

Thanks to those of you who wrote recently with encouraging feedback and supportive words -- please continue to engage by emailing me at marie@restless.global.

Happy reading to all,

Marie


GENERAL RESCUE MEASURES

The African Union’s campaign to restructure the continent’s debt won a first victory this week with the G20 agreeing to suspend debt interest payments owed to them by some of the world's poorest countries for 2020. But the AU’s plan wants to go much further, seeking $44 billion of debt relief (out of a total $365 billion owed), a generalized suspension of interest payment for all of Africa’s economies, and a stimulus package of $100-150 billion. While the AU is facing strong opposition, especially from the US and China, it has the backing of several European leaders and international opinion is shifting in its favor. 

Recognizing that the moment presents a “cultural emergency”, UNESCO launched ResiliArt, “a global movement consisting of a series of virtual debates with key industry professionals and artists” to raise awareness on the impact of the current confinement measures on the culture sector. I looked everywhere but, sadly, there seems to be no financial measures attached to this initiative.


MOBILE

Kenyan operator Safaricom announced that it had recorded a 70% increase in fixed internet usage and a 35% increase in mobile data consumption due to the lockdown. Even more interestingly, internet traffic to Netflix has quadrupled from March to mid April in Kenya. 

The explosion in demand is pushing governments and operators across Africa to increase network capacity and lower prices, which we can hope will have a lasting positive impact. In Ghana, the National Communication Authority has allocated free additional spectrum to MTN and Vodafone for a period of three months, while browsing is now free with Airtel Togo and Opera. In South Africa, the Independent Communications Authority (ICASA) has received 35 applications from mobile operators seeking temporary allocation of new radio frequency spectrum. South African operators had been asking for access to additional spectrum for years, as it would allow them to serve a wider geographic area with existing towers while also carrying more data traffic, and thus help decrease the cost of data in South Africa. They can now thank COVID-19 for pushing the government to finally instruct ICASA to act on this in March. In parallel, Vodacom has also announced that it will invest $26.7 million over two months to boost its network capacity and increase the network’s resilience during the country’s national lockdown period.


E-COMMERCE

With COVID-19 fast-forwarding the adoption of e-commerce across Africa, Rwanda’s 2018 partnership with Alibaba, which led to the launch of Africa’s first e-commerce university programme developed with the African Leadership University (ALU) in Kigali, seems very prescient. ALU is also collaborating with Alibaba Business School's Global Ecommerce Talent (GET) Programme to organize the Africa edition of the GET Global Challenge 2020 entitled “Digital Solutions During COVID-19 and Beyond”, which is currently open for applications until May 4th. Successful applicants can win various prizes including up to $14,000 in business funding.


FASHION

The June 5th final of the annual LVMH Prize, the most prestigious fashion award for young designers, has been cancelled. Instead of postponing the event or moving it online, LVMH decided to split the 300,000 euros prize money equally between all of the eight finalists, including South African Sindiso Khumalo, and to set up a fund to financially support young design talent. Last year’s LVMH Prize winner was 26-year-old Thebe Magugu, another South African and the first African ever to pick up the prize, while Nigerian Kenneth Ize was a finalist. 

The rise of African designers to the select group of fashion’s most promising global talents is a testament to the potential of Africa’s fashion industry, which is also unfortunately one of the creative sectors hardest hit by the current economic shutdown. However, the African fashion community has also been quick to come together to discuss ways to build further resilience and prepare for a post-COVID future which is largely unknown, notably through a plethora of Instagram Live discussions and webinars. I talked last week about Lagos Fashion Week’s Woven Threads program. I particularly liked “How to Design like an African” by This is Us’ Oroma Itegboje: “First, state a multi-purpose intent. Then, find something beautiful that has been in Africa for a long time, and use what’s around you to create. Ask lots of questions.” All is said.


MUSIC

The place to be this weekend was online (ha!) at the One World: Together at home concert, which was organized by international charity Global Citizens, Lady Gaga, the United Nations and the WHO, and had as of Sunday morning raised $127.9 million for health and essential service workers. The ginormous event ran for 8 hours and was packed with A-listers like The Rolling Stones, Taylor Swift, Billie Eilish, Beyonce, Lizzo, Jennifer Lopez, Stevie Wonder, Paul McCartney, LL Cool J, as well as African artists Burna Boy, Black Coffee, Cassper Nyovest, Sho Madjozi, Nomzamo Mbatha, Idris Elba, Lupita Nyong’o, and Danai Gurira. The full video is now available on YouTube.

The forced digitalization of the live music experience is stretching the usage of existing platforms in an unprecedented way. I talked last week about how African DJs have been leveraging Instagram - which has clearly emerged as the platform of choice for all creatives seeking to transition their businesses online (more on this later). Now a group of European music industry organizations have launched the #NextStageChallenge, an online hackathon & support program to explore new solutions and business models to reshape the live experience in the digital space. The call for registration is open until April 24th, 2020. 


SPORTS

The Burundi Football Federation was one of the world’s last to finally suspend local matches, two weeks after the country confirmed its first case of coronavirus. Never heard of Burundian football? Well at least now you know it exists.

Faced with a total lack of live sports, fans now only have e-sports (as we previously discussed) or content about sports to fall back on. Supersport has announced that it will now broadcast a sports film every day for the next two months. The lineup will include Jerry Maguire, Senna, Any Given Sunday, Rocky 1-5, and Invictus. Meanwhile, the 10-part documentary series The Last Dance, about Michael Jordan and the 1990s Chicago Bulls’ journey pursuing their sixth NBA championship, is coming to Netflix today Monday April 20th.


VISUAL ARTS

Bloom Art’s founding director and curator Ugoma Adegoke has a great piece on CNN about private art repatriation and her work guiding wealthy Nigerians who have chosen to invest in art. “In the small arts community we have in Nigeria, private ownership is crucial: private collections serve as quasi museums, and collectors are custodians that can ensure art will remain here in the long term,” she writes.


FILM

Several African documentaries have been selected as part of the lineup at Hot Docs, one of the world’s leading documentary festivals, which was originally scheduled to run from April 30th to May 10th in Toronto but has been postponed with no clear indications so far as to which new form it will take. The festival would have opened with Sam Soko’s Softie, from Kenya, which had already played Sundance earlier this year. The other selected films include I am Samuel, by Kenyan director Peter Murimi and produced by Softie’s Toni Kamau, and Zibuye - The Occupation, by South Africa’s Dylan Valley. Kenya has a long tradition of documentary filmmaking and some serious local expertise. When I first arrived in Nairobi in 2006 from CNN New York, I was impressed to meet Kenyan Reuters cameramen with impeccable editorial skills who, contrary to their CNN counterparts at the time, were perfectly capable to produce and edit their own stories. It’s been great to see Kenya’s home-grown talent making headway on the world stage recently.


BROADCAST

TV Music group Trace has launched its new channel Trace Muzika focused on Ethiopian music. Coming after Canal+ announced its plans to enter the market at the end of 2020 and more recently its signing of a partnership with Nolawi Film Production for the provision of Ethiopian films, the Trace move confirms the interest of global players for the newly-opened Ethiopian media and communications market.

But what I really want to talk about this week is Instagram. And why in the broadcast section? Well, because Instagram Live has become the new television. Between funny skits from comedians such as unlikely breakout star FatherDMW, celebrity interviews, business experts panels or webinars, ‘Battle of Hits’ between music producers, DJ sets, game shows, and workout videos (finally!), there is so much content on Instagram Live these days that it is impossible to keep up. And a lot of it is of surprisingly good quality, a measure of the technology’s progress but also of the pent-up creativity that, with nowhere else to go, is suddenly being unleashed on what has long been the creative class’ favorite platform.

According to Instagram’s owner Facebook, Instagram Live usage has doubled in the past few weeks globally. Although there is currently no direct means of monetization, some creators have begun exploring brand placements and sponsorship, and in response to this Twitter thread, Head of Instagram Adam Mosseri has confirmed that it was working on ways to “support creators and artists using Live”, which I find really exciting. You can already watch Instagram Live on your computer or television rather than on your phone. My own suggestion from a viewer’s perspective: we need a TV guide for all these Lives with the ability to add programs to our calendars and create reminders, and an easier way to replay what you have missed.


VOD

As Disney+ reaches 50 million global subscribers and Quibi 1.7 million downloads, the next player in the global streaming wars, NBC Universal’s Peacock, is taking flight. Peacock’s launch was scheduled to coincide with this summer’s Olympics, but with these being cancelled, it had to review its strategy. What’s interesting about Peacock is that it is an ad-supported service, which as I’ve mentioned before could eventually be a workable model for Africa. The challenge of course is that Peacock is launching at a moment when brands are cutting their ad budgets due to the crisis, with the US ad market expected to drop 13% this year. To be continued.

Meanwhile, Netflix continues to bring premium African properties to its service, with cult pantsula-themed South African TV series Tjovitjo and Nigerian much-talked-about film The Set Up coming to the platform this month. I remember the time, not so long ago, when there was no way to watch this kind of quality African content anywhere. 


CONTENT DEVELOPMENT

Two shot-in-lockdown series are coming to the world and - really interestingly - they both come from Spanish producers. First, the half hour sitcom Quarantine Diaries, which was recorded in their homes by the actors themselves, is already being released on Radio Television Espanola (RTVE). The second project, En Casa (at Home), is a Spanish anthology series from HBO Europe comprising five 15 minutes episodes of different genres produced by five different directors also from their homes. You’re going to start thinking that I bring everything back to Netflix, but I do see the influence of the streamer here, as it was Netflix that brought Spanish series to the world (with its uber-successful Casa de Papel and Elite), leading to a kind of creative renaissance in Spanish television. I believe it will have the same impact on Nigerian TV series (Nigerian films were already doing very well pre-Netflix).

But actually, the big news in content development this week is that Africa’s very own first lockdown series is here. Self-shot in Kenya, Nigeria, South Africa and Ivory Coast, it is coming to us courtesy of the MTV Staying Alive Foundation. The 60-part MTV Shuga Alone Together mini-series is an extension of the well-known and very successful MTV Shuga brand and aims to raise awareness on COVID-19. Catch it on YouTube from today April 20th.

Meanwhile in Nigeria, director and animator Niyi Akinmolayan (who’s also behind The Set Up) has released another viral COVID-19 video, this time a lovely animation aimed at children which has already gone everywhere including on CNN. I am a huge fan of Niyi’s work and of his commitment to support his industry, and what he’s just done here is simply putting Nigerian animation on the map.

I’ll finish with this fascinating article on “the passion economy” and how new platforms allow anyone, and especially creators, to monetize unique skills. As the world is now trapped at home and glued to their screens, African artists are finding new ways to engage with and grow their audiences online. For some, the boost in numbers has been staggering. Viewers are discovering new talent, getting comfortable with new ways to consume, and hooked on new types of content. The next step will be to monetize, and we can bet that this will be solved soon.

HUSTLE & FLOW #8: 5G vs COVID, conspiracy theories and the power of Whatsapp, the State of Fashion, content creation strategies, and more

Dear colleagues and friends,

First of all, Happy Holidays to those celebrating Easter, Passover, or Ramadan this long weekend or later this month.

Welcome also to all new readers who joined us through HUSTLE & FLOW’s new open subscription link. I hope you will find this newsletter helpful and, dare I say, entertaining, in this time of upheaval. After all, this too shall pass.

Last week was, in fact, pretty entertaining by COVID standards. First, Nollywood star Funke Akindele was arrested for throwing a birthday party for her husband despite the lockdown. They were both fined N100,000 ($260) and sentenced to 14 days of community service during which they will “ educate the public on the consequences of non-compliance with the restriction order." The incident generated intense debate on Nigerian social media and in the end, the whole commotion turned out to be a quite effective #StayHome PSA. 

Meanwhile in Uganda, fed up with people who continued to work out in groups in Kampala’s public areas against his instructions, forever young 75-year-old president Yoweri Museveni took the matter into his own biceps and released a video of himself doing 30 push-ups in his office. When I wrote in a previous edition that now was the time for African online workout videos, that’s not exactly what I had in mind.

This week in HUSTLE & FLOW, we’ll continue talking about some of the sectors currently experiencing fast-tracked growth, such as mobile money, logistics and VOD, but we’ll also delve a little deeper into the power of Whatsapp and COVID-specific content creation strategies. 

If you have missed previous editions of HUSTLE & FLOW, you can check out the archives here. And as always, do not hesitate to send me your questions, feedback, and topic requests at marie@restless.global. I’m looking forward to hearing from you.

Happy reading to all,

Marie

GLOBAL RESCUE MEASURES

Last week the World Bank confirmed what most of us were already expecting: Africa will enter its first recession in 25 years in 2020. To help mitigate the impact, the World Bank has called for a pause in debt payments and is unlocking $160 billion in financial support. In addition, the African Development Bank unveiled a $10 billion Response Facility, while the African Union and Africa CDC launched an “Africa COVID-19 Response Fund”, a public-private partnership with the AfroChampions Initiative, which will raise an initial $150 million and up to $400 million in total. Internationally, Agence Francaise de Developpement (AFD) committed 1,2 billion euros to its “COVID-19 Health in Common” initiative, mostly directed at the immediate health emergency in Africa. AFD’s Director Remi Rioux also hinted at other upcoming initiatives targeting the social and economic aspect of the crisis. 

In billionaire news this week, Twitter and Square’s CEO Jack Dorsey committed $1 billion, or just under a third of his total wealth, to relief programs that will be channelled through his newly-formed company Start Small. In 2019, Dorsey had announced plans to move to Africa for up to 6 months in 2020 after a month-long trip during which he met with some of the continent’s top entrepreneurs, so we can assume that Start Small will provide support to African startups in one way or another. Talking about startups, here’s a great centralized document that crowdsources COVID-19 related resources and initiatives for and from the African startup ecosystem. 

Now more specifically concerning the Entertainment sector, South Africa’s Department of Sport, Arts and Culture has finalised the criteria to distribute the R150M ($8,3M) COVID-19 relief fund for artists, athletes, technical personnel and the core ecosystem that supports them. In Kenya, president Uhuru Kenyatta announced that the government had set aside Ksh.100 million ($944,000) for local musicians, artists and actors through the Sports Fund. Kenya counts 19,000 entertainment professionals registered with one of the country’s 3 Collective Management Organizations (CMOs), which might mean that each person could take home approximately Ksh5,200 ($50!). Meanwhile, HEVA Fund is currently compiling the results of its COVID-19 Creative Sector Relief and Recovery survey whose results will be used by partners such as the British Council, Goethe Institute, UNDP and the Kenya Film Commission to map out future support measures.

INTERNET INFRASTRUCTURE

Despite having more than $350 million at hand to finance its various expansion plans for Africa, telecoms tower infrastructure company Helios Towers announced last week that it was postponing (but not cancelling) its investments due to the on-going crisis. Helios Towers currently has operations in South Africa, Tanzania, Ghana, Congo Brazzaville and DRC, and has expressed interest in the just-opened Ethiopian market, but also Tanzania and Morocco. 

MOBILE

The big news in mobile money this week was the acquisition of M-Pesa by South Africa's Vodacom and its Kenyan subsidiary Safaricom from London-based Vodafone. Yes, the names are confusing and all these companies are linked to each other, but the aim of the transaction was to give the local operators full control of the M-Pesa brand, product development and support services to boost expansion into new African markets. M-Pesa is currently Africa's largest payments platform with some 40-million users in Kenya, Tanzania, Lesotho, DRC, Ghana, Mozambique and Egypt. 

It certainly feels like the right time to go all-in. According to statistics from a new report from the GSMA trade body, 50 million sub-Saharan Africans created a mobile-money account in 2019, bringing the total number of users up to 469 million. Boosted by coronavirus’ self-distancing measures, this number is likely to top 500 million in 2020. One country where we might see a strong rise in mobile money adoption is Nigeria, which suffered from an initial tepid support from the Nigerian government. The Central Bank of Nigeria is now planning to roll out a new payment licence system in order to streamline the regime for fintechs in Nigeria.

Still in Naija, the Nigerian Communications Commission has confirmed that the country has successfully completed its 5G trials. It also addressed the widely circulating conspiracies suggesting a link between 5G and coronavirus and clarified that 5G had not yet been deployed in the country. Nigeria is far from the only country where these theories have spread. What is particularly concerning is the speed and ease at which misinformation travels across Africa through the ubiquity of Whatsapp. But Whatsapp reacted quickly by limiting the ability to forward messages that have been sent through a chain of more than five people to only one more contact. Under South Africa’s coronavirus disaster regulations, Whatsapp group admins knowingly spreading false information may also now be held criminally liable.

Now, as someone always looking for the silver lining, what I see here is a proof of the power of Whatsapp when it comes to content distribution in the African context. Several weeks ago, WHO tapped into it when it launched a dedicated messaging “COVID-19 hotline” service in collaboration with South Africa’s Praekelt.org. Back in 2014, after discovering that pirated clips of our new Nigerian show Ogas At The Top were being circulated on Whatsapp, my team and I experimented with it as a distribution platform. We collected hundreds of phone numbers from people wanting to receive the videos directly to their phones, but Whatsapp Business didn’t exist yet (again, too early) and, faced with the platform’s anti-spam measures, we had to give up. The other issue was that there was no way to track where your content went after it was released into the wild, and of course no way to monetize. Facebook, if you’re listening, enabling the use of Whatsapp as a content distribution and monetization channel would be a major boost to the African creative industry.

LOGISTICS

The African logistics sector is facing intense pressure, according to Kobo360 which estimates that the industry in emerging markets has lost $7.5 billion since February because of the drop in imports from China and other countries. Confusion over which businesses qualified as “essential services” also led the Lagos State Environmental Protection Agency to seal off Jumia’s main warehouse on April 1st, but the matter was sorted out quickly and the warehouse reopened that same day. 

And there are of course concerns over the global food supply chain. But in the same week, Lagos-based deliveries startup kwik secured an undisclosed amount in new funding from the founder of French video games company Ubisoft to scale its operations in Nigeria. All these services are indeed demonstrating that they are indispensable, and I agree with Kobo360 Chief Strategy Officer Kagure Wamunyu when she says that “the pandemic will push the sector to its limits, however we  believe that in the end, we will succeed”.

For some interesting points of view on the future of Jumia now that Rocket Internet is out, this webinar on countercyclical investment opportunities in Africa is worth watching. Speakers Aubrey Hruby of Insider, Rob Eloff of Lateral Capital, and Iyin Aboyeji of Future Africa also discussed trends in tech, industrialization, housing, and human capital.

FASHION

I’m not going to lie, this is not a great time for the fashion industry. Mckinsey and the Business of Fashion just released a special coronavirus update to their State of Fashion 2020 report, which shows that revenues for the global fashion industry will contract by –27 to –30% in 2020 year-on-year. The COVID-19 crisis will fasten or enhance consumer shifts that were already visible previously, such as anti-consumerism, digital transformation, seasonless design, and the decline of wholesale. But it will also be an opportunity to reset and reshape the entire value chain towards more environmental sustainability and to foster collaboration within the industry.

One big unknown is how Africa’s resilience will interact with some of these global trends, but also with local ones such as the growth of e-commerce and a (hopefully) new focus on industrialization. After all, African fashion is built on the deep-rooted, sustainable tradition of made-to-measure tailoring for a hyper-local customer base which passes for the future now in developed markets, and is yet to be integrated into the international marketplace, meaning that it will barely suffer from the drop in sales in Europe or the US. For those who want to go further on this, the on-going (online) Woven Threads program by Lagos Fashion Week is currently exploring some of these themes. So here also, I remain hopeful. One positive example of Africa’s resilience as applied to the textile industry is this story about how a gardening clothes factory in Kenya transformed almost overnight to produce 30,000 surgical masks a day.

SPORTS

In 2019 BC (Before COVID), Deloitte had forecast a “golden” outlook for the sports industry this year. Now, it has come to a standstill. Sports will come back eventually, but the question is what will change in the meantime. With live sports on hold, sports TV viewing hours (which usually represent 30% of viewing time) plummeted by 91% globally last month, according to Conviva. But the company also believes that “sports will bounce back with a vengeance” as the pivot to e-sports has demonstrated that demand remains. Indeed, sports organizations have continued to transition as much of their activity online as possible to keep fans engaged, such as America’s most popular motorsport with its eNASCAR iRacing Pro Invitational, and the NBA with its NBA at Home and NBA Together Live initiatives, which saw for example Nigerian-American player Chiney Ogwumike take part in a three-point challenge and Mo Bamba, whose parents are from Ivory Coast, perform a ball handling circuit which fans can practice at home. Former players Luol Deng and Pops Mensah-Bonsu have also been holding live conversations on Instagram. Looking further out, virtual Reality might be in the future, as well as a boom of sports betting, as we discussed last week. And while everyone in Africa (including Don Jazzy) is now dancing on TikTok, I am still waiting for these workout videos.

BROADCAST

South Africa’s national lockdown has given rise to some record TV ratings, with MultiChoice reporting a 100% increase in its daytime audiences, and the same is probably happening across the continent. One long-term impact of the shutdown will be that millions of viewers will have been exposed to new content and formed new TV habits. Broadcasters (and platforms) are also currently buying finished programs to fill their gap in fresh programming, so if you’re sitting on films or TV series that you haven’t yet sold exclusively to Netflix or MultiChoice, you should be trying to make some sales right now.

More specifically, educational TV programs or channels aimed at children currently out of school are booming across the continent: South Africa’s public broadcaster SABC and the Department of Basic Education have rolled out a multi-media (TV, radio and online) learner support initiative titled “COVID-19 Learner Support”; the Ghana Education Service has announced the launch of Ghana Learning TV, a 24-hour free-to-air channel for high school students; whereas in Kenya Akili Network premiered Akili Kids!, the country’s first children Free-to-Air channel (in the works pre-COVID). Being far away right now, I am not able to watch any of these programs and I’m really curious as to whether they are locally produced or all foreign. Please email me to let me know. In any case I am hoping that this period will contribute to a change of perception among local and regional broadcasters as to the value of African children shows, which has long been the poor parent of TV content. Also, I don’t see why these special channels shouldn’t stay on the air even after schools reopen (with maybe some time slots dedicated to adult education).

VOD

In global VOD news, Quibi launched last week, and reported an unimpressive 300,000 downloads on its first day in the US. TechCrunch has some strong words for the fledgling service: “It takes either audacious self-confidence or reckless hubris to build a completely asocial video app in 2020 (...) Quibi manages to miss every trend and tactic that could help make its app popular.” The entire article, entitled “Quibi is the anti-TikTok (it’s a bad thing)” is a must read. I’ve talked in previous editions of HUSTLE & FLOW about how well suited to the African market TikTok was, and how Quibi is not (it doesn’t seem suited to any market, really).

Meanwhile, ad-supported VoD service Pluto TV, owned by ViacomCBS, has launched in 17 Latin American countries with 24 channels, and is aiming to expand to 70 channels in the next 12 months. I’ve been following the growth of Pluto closely because I think that model might work well in Africa (the main issue being the depth of the local online ad inventory). Its performance in Latin America, the world’s second-fastest growing mobile market after Africa, will produce some relevant insights, which I will of course bring to you.

CONTENT CREATION

I’ve talked at length in the past few editions of this newsletter about the global increase in demand for content. The question is: how can African creators take advantage of this trend? 

First, performers have been having some good success with live digital events as those become more accepted. Nigerian comedian AY hosted an online version of his AY Live this Easter Sunday on various platforms. The event gathered a staggering 84,646 viewers on Instagram alone. Online sets by DJs like Kenya’s Blinky Bill have proved popular, despite major issues with Instagram flagging their content (again, Facebook, if you’re listening…).

For other creators, if you’ve already sold everything in your catalog, the first thing to do is find a way to produce new content despite the lockdown. You can edit or repurpose unfinished projects, you can write, you can record podcasts (where are the African scripted podcasts?). If you are an animator, you can and should absolutely continue to do your thing as animation is one of the sectors that stand to eventually gain from this crisis. One strategy is to take advantage of the various grants and competitions currently open for the production of COVID-related content, such as the CcHub/African CDC initiative which I had already linked to, the Docubox Short Film competition, or the UN’s Global Call Out to Creatives (deadline tomorrow!). The BBC’s script competition is now closed.

But, you can also produce more ambitious video content remotely. In California, CBS courtroom drama All Rise has returned to production by tapping into FaceTime, WebEx, Zoom and additional online technology to film a new episode in which Judge Lola Carmichael virtually presides over a bench trial. Characters will be shown managing their “new normal” in the actors’ real homes, with VFX being used to create the necessary backgrounds, while a cinematographer operating solo from a vehicle will capture exterior footage of the empty Los Angeles streets. How cool is that?

So I’m thinking of you, Nigerian filmmakers, as this is right up your alley. If kids in Kaduna with a smartphone and a green screen can create content that goes viral and gets them in front of top Hollywood producers (I hear a deal is in the works), then you can certainly come up with a cool concept that can be shot remotely by various people in their homes. I’ll do my part and give you feedback on your concept or script, and if it’s really good, I might even help produce it.

HUSTLE & FLOW #7: African Entertainment goes all-digital: mobile payments, live streamed concerts, online art auctions, sports gaming, and more

Dear colleagues and friends,

The never-ending, traumatic month of March 2020 is finally over, and April is starting strong with an internet uproar over a live TV interview in which two prominent French doctors discussed testing a potential coronavirus vaccine in Africa “where there are no masks, no treatments, no resuscitation”, before making an unfortunate parallel that involved AIDS and prostitutes.

There’s been plenty of commentary on that episode already so I won’t add mine to the pile. Instead, I prefer to explore the less-obvious option which is that this crisis might turn out to have positive outcomes for the continent in the long run. Togolese economist Kako Nubukpo has written a great op-ed in Le Monde entitled “After coronavirus, another Africa is possible and it is not a utopia”, which I recommend you Google Translate if you don’t speak French. Islamic Development Bank’s Bandar M. H. Hajjar also wrote about how coronavirus could be an opportunity to reshape development in Africa.

When it comes to what interests us here on HUSTLE & FLOW, the move to all-digital is already having an impact on mobile payments, video streaming, e-commerce, home deliveries, content creation and gaming that will boost many businesses in the Entertainment space in the months and years to come. A new understanding of the urgency to industrialize will also eventually open new opportunities for the textile sector.

The painful, brutal transition will take a while though, so I am opening up this confidential newsletter and its archives to the general public for the duration of the confinement period. Anyone can now subscribe without the need for a referral and consult previous editions without a password. I encourage you to share these links with the creative entrepreneurs in your network who might be in need of support and inspiration in these unsettling times.

Happy reading to all,

Marie

GLOBAL RESCUE MEASURES

New rescue measures and support initiatives have kept pouring in, and the good people at Nairobi-based Maitri Capital have compiled a list of 70+ of Africa-focused funding opportunities here. The list includes most of the ones I had identified last week, as well as new ones such as impact investor Vital Capital’s new $10 million debt facility.

Large corporates have continued to announce sizeable contributions: South Africa’s Naspers committed R1,5 billion ($78,8M), MultiChoice Nigeria donated N250 million ($642,000) as well as N550 million ($1,4M) worth of inventory for public service announcements, mobile operator Orange added 3 million euros to its initial contribution of 5 million euros to help the countries where the company operates, and Facebook pledged $100 million in funding to news organizations with a focus on the hardest hit countries in the world. Also, NBCUniversal committed $150 million, and WarnerMedia and Sony $100 million each to support the entertainment industry - but this money won’t reach Africa unfortunately.

Locally, the governments of Botswana, Ivory Coast and Senegal, among others, have announced hundreds of millions of dollars in social relief funds. Kenya’s own emergency response fund’s initial allocation will come from monies received from government officials who committed to voluntary pay cuts, proving that miracles do happen, at least during the apocalypse. In Nigeria also, senators have surprisingly come through and will donate 50% of their salaries to the COVID-19 fight. It only took a global pandemic for some of Africa’s notoriously overpaid members of the political class to start behaving properly. On the same theme, Le Monde has a great article (in French) about the threat that coronavirus poses to the continent’s globalized elite, and especially to some of its older, most ineffective leaders - the kind who prefer to seek treatment abroad rather than invest in their countries’ health systems. The question is: could this lead to some “corona Spring” type of revolutions as the next elections roll around?

DATA CENTERS

In all this chaos, the surge in internet consumption continues to put a strain on the existing infrastructure globally. I’ve talked a couple times in this newsletter about the major opportunities that investors can find in the African data center space. For those of you who are interested in digging in, this new webinar on The African Data Centre Boom: A Regional Dissection is worth watching. The data center world is a complex, technical space with multiple moving parts. If, like me, you don’t know what a vendor neutral cloud operator does and why they currently have little competition, you can find out here.

MOBILE

In order to ease the financial burden on its now-confined population, Nigeria’s Minister of Communications and Digital Economy has ordered telcos (again) to reduce calls and data rates. He also announced that additional bulk spectrum would be allocated. According to the Nigeria Communications Commission (NCC), Nigeria has more than 174 million internet users, and its network is known for its unreliability. Now would be the time to push through some long-needed improvements.

Besides reducing data rates, telcos and financial companies across Africa have also reduced or waived mobile money transaction fees as governments have encouraged digital payments to reduce person-to-person contact and potentially slow the spread of the virus. Although East Africa is the world leader in mobile money adoption, in West Africa only one in four adults use these services, so COVID-19 could provide an opportunity to massively increase usage there. And once people get comfortable paying with their mobile phones for food or electricity, they’re only one step away from fully entering the digital economy.

Now is as good a time as any for Ethiopia to announce that it will allow non-financial institutions to offer mobile-money services, effectively opening up the lucrative business to telcos. Remember that a few weeks ago the country had already opened up two new mobile licenses, attracting the interest of MTN, Vodacom and Orange. Despite the economic armageddon that the corona crisis will likely leave in its wake in Africa, I believe that Ethiopia, with its 105 million population and still a greenfield in many regards, will continue to be an attractive destination for investors.

E-COMMERCE AND LOGISTICS

E-commerce and logistics startups across the continent continue to adapt their businesses to respond to the surge in demand for home deliveries. In Senegal, delivery startup Paps is offering to collect and deliver medical products and lowering prices for food and water deliveries. And because there are no online grocery stores in Senegal, Paps is currently working on integrating a catalog of food and hygiene products to its website, effectively launching its own e-commerce platform, which is an interesting development that could inspire other delivery companies. Nigerian e-logistics cargo startup Kobo360, which operates across Africa, is limiting movement of non-essential items such as cement and construction materials to focus on food products, which account for more than 50% of the platform’s clients, and pharmaceuticals, which make up around 4%. And with perfect timing, Rwandan startup Kasha, an e-commerce platform improving women’s access to health, hygiene and self-care products, has secured a $1 million investment from Finnfund to expand further across Africa.

But perhaps the biggest e-commerce news of the week has been the announcement by Rocket internet that it had sold its 11% stake in Jumia. Apparently the sale took place before the onset of the corona crisis and it now feels strangely counter-cyclical. Although the platform has had a rough year since its listing on the New York Stock Exchange last April, with admissions of numbers tampering, mounting losses and some very public downsizing, if there was ever a moment where it could reverse the tide, it is now. I will be grabbing the popcorn to watch how this one unfolds.

FASHION

Many of the world’s fashion designers and brands have had to halt everyday operations due to the coronavirus pandemic, and several have been reallocating resources to the fight against COVID-19. In the fledgling African fashion sector, resources are limited, but one thing almost anyone can do is make masks, and make masks they do in Nigeria, Kenya, Ghana, and really, everywhere. Local designers are quick to say that they know fabric masks do not protect against the virus but that they can help in limiting the spread of the wearer’s own droplets and in reminding people not to touch their face. Journalists love this kind of stories and they are nice indeed, but the real opportunity for Africa’s fashion sector lies in preparing for the post corona world, one in which governments will be newly motivated to produce medical gowns and all sorts of uniforms locally.  

VISUAL ARTS

Sotheby’s sixth sale of Modern & Contemporary African Art took place last week, in a new online-only format. It featured over 100 works from 58 artists across 21 countries and realised $2,881,741 in sales. If the amount is modest, the stats are interesting: the auction saw a 46% increase in the number of bidders from last year’s sale, and 27% of buyers purchased lots for the first time at Sotheby’s. Participants hailed from 22 countries and almost 30% of bidders were under 40 years old. 

MUSIC

Meanwhile, African artists have joined in on the “making music on the internet” trend (what else is there to do?). YouTube hosted the second weekend of its #Stay Home... #WithMe" online African music festival with performers like M.anifest, Simi and Manu WorldStar. The first edition had hosted live stream performances from several South African, Nigerian and Ghanaian artists including Reekado Banks, Gigi Lamayne, and Asa. In Francophone Africa, Vivendi’s Universal Music Africa (UMA) launched Digital Live Play, a “live concert in an empty room” concept at the Majestic Cinéma in Abidjan, which was broadcast live on the local Orange TV channel. Vivendi is planning to organize 8 more of these concerts across several other countries, particularly in Benin and Cameroon, where the group recently opened CanalOlympia venues.

SPORTS 

The world of sports was in mourning last week after the death of former Marseille football club president Pape Diouf from coronavirus. The 68-year-old was being treated in a hospital in Senegal, the country of his birth, after contracting the virus.

In other bad news, the cancellation of all live sports events is already having consequences in terms of sports broadcast rights. Canal+ was the first to refuse to pay for the remainder of its Ligue 1 rights bill while matches are paused, claiming a fall in advertising revenue. BeIN Sports swiftly followed suit and announced it would suspend payments for Ligue 1 and Ligue 2 rights until the competitions resume. 

Global sports rights had already been in decline after reaching a peak a few years ago, and according to VC Matthew Ball, the COVID-19 crisis is now increasing the need for leagues and broadcasters to invest in alternative monetization models, such as gamified viewership and web-based gambling, especially since it will take time before fans are allowed back into stadiums. There’s been some quick thinking there already: on March 22nd, Formula 1 launched a new F1 Esports Virtual Grand Prix series, featuring a number of current F1 drivers but played on the official F1 2019 PC video game, and the NBA just announced the “NBA 2K Players Tournament”, opposing 16 current NBA players in a single-elimination, player-only tournament on Xbox One. The NBA and ESPN are also reportedly in discussions to create a H-O-R-S-E (shooting game) competition among several high-profile players in isolation. I haven’t yet gotten round to discussing Africans’ appetite for sports betting, a market which totaled nearly $40 billion combined in Nigeria, Kenya, and South Africa in 2018, but this medium article from blockchain startup Kamari does a good job at it. It feels like there might be a major opportunity there.

BROADCAST

The rest of Matthew Ball’s essay is a must read as it goes deep into the various ways in which the corona crisis is reshaping the Pay TV and OTT video space. Although his analysis primarily concerns the US and Europe, some of the trends he unearths could at least partially apply to Africa as well, such as Pay TV’s dangerous reliance on the aforementioned live sports rights, traditional broadcasters’ vulnerability to the current stagflation-like phenomenon of declining advertising revenue despite increased viewership, and the rise of aVOD (advertising video on demand).

In fact, African broadcasters must already be feeling the strain of having to offer more value for less money, with advertising revenue bound to fall with the cancellation of live sports events and the looming recession. Meanwhile, the Communications Authority Of Kenya (CA) has ordered pay-TV providers to grant access to the free-to-air channels on their decoders, and Nigeria’s National Broadcasting Commission (NBC) has called on all pay-TV subscription broadcasters in Nigeria such as DStv, StartTimes, GOTv, and FreeTv to immediately decrypt all the local channels on their bouquets. 

DIGITAL CONTENT

The CcHub has announced the name of the 8 companies that have been selected so far as part of its partnership with the Africa CDC and GIZ to provide funding support to innovative communication-related COVID-19 related projects that are focused on the delivery of vetted information in various African languages. The winners will be supported with grants of up to $5,000 to propagate the reach of their projects - a small amount for sure, but one that could still provide a much-needed boost to some digital creators.

VOD

An emerging trend is the potentially COVID-inspired renewed interest for the VOD space in Africa, after the initial wave of excitement (in which I was very much an active participant with Buni.tv) ended with the failures of many early entrants facing underdeveloped infrastructure. In the last edition of HUSTLE & FLOW I mentioned the launch of MGM’s VOD service in South Africa. Last week, two local platforms launched in Kenya: Africa 24’s factual storytelling platform and Savvystream, a free, ad-supported video streaming service by Dotsavvy. Although these solutions were of course developed pre-COVID, they could benefit from the on-going shift to all-digital and the temporarily lower mobile data rates. I’ve always thought the aVOD model would be a good one for Africa, but back in my day (2012! That’s what I call being too early) the African digital ads inventory was too small for this to work. The market may be ready now, although brands will themselves be impacted by the economic crisis and will tighten their advertising belts.

And finally, YouTube, already the leading online video site on the continent, is planning to release Shorts, a rival to hugely popular video-sharing app TikTok, by the end of the year. I’ve already talked about how well-suited TikTok is to the African market, and there is probably space for a competitor, especially if it’s YouTube (or Facebook).

HUSTLE & FLOW #6: Organizing the resistance to COVID-19, a roundup of rescue initiatives for African entrepreneurs

Dear colleagues and friends,

Last week saw the coronavirus-related deaths of two popular figures of the African media space: the iconic Cameroonian Afro-jazz legend Manu Dibango, who passed away at 86 in a French hospital, and 30-year-old Zimbabwean star TV journalist Zororo Makamba. Prevention measures also took a violent turn in Kenya, South Africa, and other parts of the continent as countries called on the police to impose lockdowns and curfews.

But despite the grim news, bright spots also emerged in the African fight against the virus, as wealthy individuals, startups, and governments came together to organize the resistance. Perhaps the most high profile example of this new kind of collaboration is the major donation of essential medical supplies by Chinese billionaire Jack Ma, founder of Alibaba, and the dispatch of these items free of charge throughout Africa by Ethiopian airlines.

In this edition of HUSTLE & FLOW, we will do a roundup to date of these rescue initiatives, especially those that can be leveraged by the Entertainment sector to limit the economic impact of the crisis. I don’t believe there’s any other comprehensive resource on this topic, so don’t hesitate to share this email with your network, and especially with the entrepreneurs in your portfolio if you are an investor.

We’ll also continue to look at how entrepreneurs can best protect their businesses and prepare themselves for a future that will offer different kinds of opportunities. Already, experts and commentators point to the urgency now for African countries to invest in their own value-added industries and supply chains. Not a new idea of course, but one that might finally have come of age as the continent realizes that it cannot count on China or anyone else for its strategic needs.

I always love to hear from you, so continue to email me your comments, questions, mailing list referrals and Zoom meeting requests at marie@restless.global. And remember that you can always visit www.restless.global/hustleflow (pw: hardouthereforapimp) to access previous editions of this newsletter. 

Happy reading to all,


Marie

 

GLOBAL RESCUE MEASURES

In the past few days, global finance and development aid institutions have gotten into formation to provide generous packages to help African countries deal with the impact of the COVID-19 pandemic. The World Bank and the International Monetary Fund have called on all official bilateral creditors to suspend debt payments from qualifying countries. Afreximbank has announced a $3-billion facility, named Pandemic Trade Impact Mitigation Facility (PATIMFA), while the African Development Bank (AfDB) also raised $3 billion through a record-breaking “Fight COVID-19” Social Bond. The United States will be providing $274 million in emergency health and humanitarian assistance to the most at-risk countries, including 19 in Africa. France has also hinted at a future economic rescue package for Africa. Regionally, the Central Bank of West African States has pledged FCFA 450 billion (about 700 million euros) to help the 8 countries of the West African Economic and Monetary Union (WAEMU / UEMOA in French). 

In Nigeria, in an unprecedented move the government and the country’s powerful private sector have come together to devise a concerted response to the crisis. President Buhari approved a total of N15 billion ($40 million) in financing for health initiatives, while Tony Elumelu’s United Bank for Africa (UBA) announced a donation of N5 billion ($13 million) and several wealthy members of the private sector contributed N1 billion ($2.7 million) each. The Central Bank of Nigeria, on behalf of the Bankers’ Committee and in partnership with the private sector led by Aliko Dangote Foundation and Access Bank, have come together to form the Nigerian Private Sector Coalition Against COVID-19. The Lagos State government has also partnered with Guaranty Trust Bank (GTB) to set up a new 110-bed isolation and treatment centre at the Mobolaji Johnson Arena (formerly Onikan Stadium). 

In South Africa, the country’ wealthiest families, the Motsepes, the Ruperts and the Oppenheimers have each pledged R1 billion ($57 million) to assist the government’s efforts, as well as small businesses and their employees affected by the coronavirus pandemic. And in Zimbabwe, billionaire Strive Masiyiwa is offering protective clothing, cash, life and health insurance and transport for nurses and doctors for the country’s health-care workers.

The above initiatives mostly seek to address the health emergency first. When it comes to support to the private sector, South Africa has announced various measures including a temporary Employee Relief Scheme, tax reductions, and cash or loan support for businesses worth a total of R3.5 billion ($200 million). Kenya followed suit with a raft of tax reductions, Ksh10 billion ($95 million) in cash transfers to the elderly, orphans and people living with disabilities, and the fast tracking of various payments to improve liquidity in the economy. Last night, Nigerian President Buhari announced a 3-months moratorium on various government-backed loans, including on loans from the Bank of Industry (BOI) that includes those to the creative industries.

More business support measures are likely to be on their way across the continent, and I will do my best to keep track of them here. Globally, over $14.5 billion in COVID-19 capital relief is newly available for entrepreneurs, as compiled by Duke University’s CASE program. However this great tool needs to be updated with African resources as they become available. Regarding the creative industries, Germany has put other countries to shame with its staggering $50 billion dedicated aid package. In Africa, support to the sector can only come from international developmental organizations, which will probably come out with their own schemes. In Kenya for example, creative industries financier HEVA Fund is asking creative practitioners to fill in a survey on the impact of the crisis on their business in order to inform future support measures.


INTERNET AND MOBILE

Meanwhile, everyone is hanging out on the internet. According to a report by First Figures, COVID-19 has already led to a 70% increase in internet use, and 12% in streaming globally, especially in China and Italy. In Africa, operators continue to cut prices to encourage usage, such as Orange Cameroon which reduced prices to its services and products and waved Orange Money charges last week, and South African data provider Rain, which accelerated the launch of its unlimited 4G data offering at R479 ($27.3) per month. In Kenya, Airtel is offering free internet access to the Longhorn e-learning site to allow students to continue studying despite the school closures.


TECH

The African tech community has reacted fast to the #COVID19InnovationChallenge call for solutions, especially in Nigeria where VC fund Ventures Platform pledged both financial and structural support to tech founders, developers, and enthusiasts who can use their skills to develop technologies that can help the government in the fight against COVID-19. Lifebank, a health startup that finds and delivers blood to patients has created a national register to track hospitals with working ventilators and respirators - it has only found 100 devices so far. Booking platform Hotels.ng has partnered with hotels to create isolation centers across the country. Genomics research startup 54gene has launched a $500,000 fund to boost local testing capacity for coronavirus. 

And as mentioned last week, the funding initiatives from innovation incubator CcHub and investment fund EquaLife Capital are still ongoing.

Going further than the immediate focus on health, technologist Moses Kemibaro provides an interesting point of view from Kenya, which I like to call “a country of early adopters”, on how the Corona-tech boom will impact local lifestyles. In particular, he notes the churches’ forced move to live streaming, the strengthening of the already hot on-demand logistics sector, and the growth of Direct 2 Consumer digital businesses. I see these trends as potentially very beneficial to the African Entertainment sector in the long term as the health emergency is forcing investment in distribution networks (both digital and physical through on-demand delivery) that were cruelly lacking, but also the adoption of new behaviors.


E-COMMERCE

Talking about new behaviors, e-commerce is already seeing a revenue boost worldwide, which experts say could represent an added $175 billion (5% increase) in 2020. In South Africa, according to investor Manuel Koser from Silvertree Holdings, online health shop Faithful to Nature has seen order volumes double in the last two weeks, PetHeaven has seen a huge increase in sales, and UCOOK has had record order volume on cook-at-home meal kits. Meanwhile, leading pan-African platform Jumia has announced that it will donate certified face masks to health ministries in Kenya, Ivory Coast, Morocco, Nigeria and Uganda, drawing on its supply networks outside Africa. The company has also offered African governments use of its last-mile delivery network for distribution of supplies to healthcare facilities and workers, and will reduce fees on its JumiaPay finance product to encourage digital payments over cash. As I said last week, this crisis is a big opportunity for African e-commerce platforms to establish themselves as an essential service in the mind of thousands, if not millions, of new customers.


BROADCAST

Also driven by increased demand from people stuck at home, many of them with children, broadcasters across the continent continue to adapt their offering. Francophone pay TV operator Canal+ has made its channels accessible for free across Africa until April 30th. Forced to pivot by the cancellation of all live sporting events, MultiChoice’s SuperSport will convert its normal line-up to thematic channels for the foreseeable future, showing sports documentaries and other sports-related content. It will also feature a Viewers’ Choice block where viewers’ social media suggestions on their favorite sporting moments will determine the content. Radio programming is also impacted: the various stations owned by the Kenyan Broadcasting Corporation (KBC) will start broadcasting school programs from Monday to Friday. I am making a bet here that African broadcasters are realizing the dearth of quality local kids and educational programming and will start investing more in this type of content in a post-corona world.

Following the lead of Netflix and the BBC, MultiChoice has announced a series of measures to support out-of-work media staff. The Pay TV leader has set aside R80 million ($4.5 million) to ensure that current productions are able to pay full salaries of cast, crew, and creatives for the months of March and April, and will guarantee the incomes of freelancers on its SuperSport productions. Considering that MultiChoice is the single largest producer of content in Africa, this should shield a considerable number of industry practitioners from immediate disaster. Through the MultiChoice Talent Factory, Multichoice’s new online learning portal will also support over 40,000 members of the industry to gain access to courses and online masterclasses during the confinement period.


MUSIC

Leading streaming platform Spotify has announced that it will match up to $10 million in donations to organizations supporting artists in need through its COVID-19 Music Relief project. Quite a few African artists make money through Spotify and might be eligible to access these funds. Spotify is also working to add a new feature to its Spotify for Artists platform that will enable artists to fundraise directly from fans, waiving its revenue share from Music talent marketplace SoundBetter, and offering extended free trials for educators on its audio recording platform Soundtrap.


FASHION

Vogue editor Anna Wintour and designer Tom Ford have launched a Coronavirus Relief Fund for those in the American fashion community who have been impacted by the COVID-19 pandemic. In Africa, the African Development Bank has established itself as the leader in the fashion space through its Fashionomics program, but Afreximbank, the British Council and others have also traditionally been quite active. We can hope that these institutions are currently at work on a dedicated rescue initiative for the fashion industry.

According to The Africa Report, in east Africa, where hundreds of millions of dollars have been invested in the garment industry, hundreds of thousands of people stand to lose their jobs as US and European orders for African garments have dried up. A coordinated response could include wages subsidies for workers, a subsidized training package to retain manufacturing capabilities, and a retooling of garment factories to produce garments for medical needs. The Kenyan government has already reached out to the fashion and textile sector to assess its capacity to make face masks and other protective gear.


VOD

South Africans are getting more options to watch premium content online. Amazon has announced it is making its kids content including series and movies available for free on its global streaming service, including in South Africa. MGM will also be launching its new sVOD (subscription on-demand) service for the South African market, which will be available as a standalone Micro Pass subscription and also be part of Vodacom’s Video Play Premium service. The offering will take advantage of MGM’s large film and TV catalogue including TV series like The Pink Panther, The Handmaid’s Tale, Teen Wolf, Stargate SG-1, and movies like The Hobbit and Legally Blonde. 


MOBILE VIDEO

Continuing our exploration of mobile video models adapted to Africa, here’s one that is screaming for a Nigerian adaptation: Snoop Dogg-backed app Cameo is having a moment, as its revenue surged 30% last week, and orders are up 83% since the beginning of March. Founded in 2017, the venture, which has raised more than $65 million, lets anyone remotely famous essentially sell virtual autographs. Cameo currently features 30,000-plus (mostly B-List) celebrities, who set a price for a personalized video they send out, with Cameo taking a 25% cut of each. Nigeria’s fame-obsessed society seems like fertile ground for such a service, but I can see it working in several other countries as well. Something to chew on if your tech/video/music business has suddenly ground to a halt.


ANIMATION

The Hollywood Reporter has a fascinating article on how the US animation industry has adapted to remote working without missing a beat, with series like Fox’s The Simpsons and Bob's Burgers, Netflix's Hoops, Apple's Central Park, and Warner Bros.’s Animaniacs, and Gremlins: Secrets of the Mogwai still in production and pumping out new episodes on schedule. 

I hope this can inspire African animators, who are already used to learning and working at home, to persevere in their craft. To finish on a hopeful note, it’s also worth noting that in January, Cartoon Network Africa’s Shesha Fest, which showcased several shorts wholly produced in Africa such as Garbage Boy & Trashcan, Majitu and Intergalactic Ice Cream, outperformed some of Cartoon Network and Boomerang’s favorite shows in the same month. Nine months from now, on top of a baby boom and a divorce boom, will we see an animated content boom?

HUSTLE & FLOW #5: Special Surviving Corona edition, mining the crisis for opportunities

Dear colleagues and friends,

Writing each new edition of HUSTLE & FLOW these days feels like sending dispatches from a vastly different world every week as the ground continues to shift underneath our feet.

Last week, several countries in Africa started implementing confinement measures as reported cases rose above 1,000. But it’s easier said than done in places such as Lagos where local culture, behaviors, and the powerful influence of religion go against the very idea of social distancing.

In addition to the human toll, the global economy is now facing a particularly cold winter - one that is likely to last 18 months, according to London’s Imperial College. Many African countries will be triply hit by the combination of the general slowdown, local currency devaluations, and capital drying up as international investors turn away from the continent to worry about problems at home.

However, as we all know, in every crisis lie opportunities. For example, content consumption - for news, communication, education and entertainment - is at a peak right now. In fact, for millions of people trapped in their homes around the world, digital content is the only escape. For investors, the expected currency devaluations, especially when it comes to entertainment market leader Nigeria, will make certain deals particularly affordable.

In this special edition of HUSTLE & FLOW, I will take a pragmatic approach and focus on what we CAN do as entrepreneurs and investors in the African Entertainment space to protect our businesses and prepare for the future, even though we can only guess at what this future will look like. African markets will react differently than developed ones to this crisis. Also, African entrepreneurs will not be able to rely on the same generous rescue packages that many western governments have started implementing. They can only count on themselves, their creativity and resilience (and perhaps on the support of a few international partners). 

Before we get into this, an apology: the link I gave you last week for the HUSTLE & FLOW archives was incorrect. The right one is https://restless.global/hustleflow, and the password remains hardouthereforapimp. 

Continue to send me comments and questions, as well as subscription requests, at marie@restless.global. Also, if you are an entrepreneur or investor in need of strategic advice in these uncertain times, hit me up and I will give you a free 30 min session. We will work together to find some solutions for your business.

Happy reading to all,

Marie

INTERNET AND MOBILE INFRASTRUCTURE

Crises have the advantage to clarify what truly matters, and we can give Coronavirus credit for settling the debate on whether the internet should be considered a utility or a luxury. As millions of people shifted to WFH (work from home) over the past couple weeks, networks quickly started showing signs of saturation, prompting YouTube, Netflix, Amazon Prime and others to reduce streaming quality in Europe to prevent the internet from breaking. 

In Africa, which is still far from universal internet coverage, network saturation is an everyday occurrence even in non-Corona times. Safaricom was the first African operator to react last week by announcing it would double its home fiber speeds to encourage WFH. It also waived M-Pesa fees, and was promptly followed in this by competitor Airtel Kenya. MTN South Africa has announced that it will cut data prices for its 30-day bundles by up to 50% starting from mid-April and offer each of its subscribers 20MB of free data daily. Zimbabwe’s TelOne announced a discounted Home Intense Package to encourage its subscribers to “effectively work and learn from home”. It will be interesting to see what the impact of these Corona packages will be on consumer behavior.

In any case and as we’ve already discussed in this newsletter, increasing coverage and capacity through investments in high speed cables, data centers, and mobile infrastructure (including 5G) is a great bet on the future, no matter what shape it takes. Just a few days ago, pan-African internet service provider Liquid Telecom announced that it had secured a $4.8 million deal to manage Togo’s Carrier Hotel data center as well as the country’s primary internet exchange point. Opportunities are out there.

E-COMMERCE

The impact of Coronavirus on e-commerce worldwide has been two-fold: although platforms face supply chain disruptions, they also report a 50% increase in online sales as people avoid physical stores. Will Coronavirus force similar behavioral changes in Africa and contribute to a wider, faster adoption of e-commerce on the continent? I believe that the logistical challenges are still too important for us to see a global, long-lasting shift, except in the most advanced markets such as Tunisia, where sales on Founa.com, the country’s leading online store, have quadrupled in the past couple weeks. Nevertheless, it is definitely an opportunity for African e-commerce platforms to create market awareness and present themselves to new consumers as providing an essential service. This is what Jumia is doing through its partnership with global health product manufacturer Reckitt Benckiser to provide access to hygienic products.

FASHION AND CONSUMER PRODUCTS MANUFACTURING

Several producers of consumer goods worldwide have retooled their operations to shift to the production of essential items such as hand sanitizers, ventilators, or face masks. For African manufacturers who have the capacity to do so, this can be an opportunity to access new regional and international markets. I am thinking specifically of the fashion and textile industry in Ethiopia and West Africa.

But there might be other, longer-term opportunities besides face masks. One of the major Corona-trends that experts believe is here to stay is the mass adoption of remote working (with this new term, Work From Home) in developed markets, even if it is not a silver bullet. Africa might take longer to transition to this new way of working as stable internet and power supply at home remain a challenge. But it can certainly service the world. As someone who’s been working remotely since 2006 (and been a full-fledged digital nomad since 2015), allow me to share a personal insight: I see the need for a proper WFH apparel line that would be comfortable like pajamas but presentable like office wear, at least on top, for Zoom calls. Such a clothing line could be produced in Africa and sold globally. If you want to work together on this, let me know!

TECH

Talking about Zoom, here’s an example of a business that is uniquely suited to these strange times we’re living in. One of its great features is the ability to change the background of your video. Any solution that can contribute to improving the professional quality and ease of video calls, including in low bandwidth environments, would be worthwhile for African startups to explore.

Another big opportunity for startups: Africa’s largest innovation incubator CcHub is offering between $5,000 and $100,000 in funding to companies with COVID-19 related projects covering last-mile communication, help for people affected by the disease, production of essential medical supplies and support for disrupted food supply-chains.

And last but not least, EquaLife Capital is launching a $20M Africa Venture Debt Relief Fund that will support venture businesses starting with a preliminary focus on the East African region with loans between $200k and $2M. This is big and this is very needed, and I hope EquaLife can inspire other funds and especially DFIs to repurpose some of the vast amount of capital raised in 2019 to support other sectors of the economy across Africa.

PHYSICAL VENUES: EVENTS, SPORTS, CINEMAS, CONCERTS, RESTAURANTS

Of course, the hardest hit sectors are those which involve the physical presence of people in public spaces. As confinement measures and travel bans are rolled out across the world, cultural events have been cancelled and venues shut down. Festivals, galeries, museums and conferences are going virtual to avoid going dark completely. Hollywood studios, starting with NBC Universal, are giving up on theatrical windows after the closing of cinema chains to release new films directly online. World-class artists are streaming private concerts from their homes, and restaurants move to delivery only (will this be the comeback of Travis Kalanick?). But of course, this is not the same, especially in Africa where the communal experience is paramount.

Filming has also stopped in most markets (but not yet in South Africa) and on-going productions have been shut down, causing major disruption and job losses and spurring Netflix to launch a $100 million relief fund for out-of-work creatives (AGAIN: thank you Netflix) which we hope will also cover stalled projects in South Africa and Nigeria.

The first step to take for all these businesses unfortunately is to cut costs down quickly and dramatically, move as much of their activities online as possible, and attempt to renegotiate loan repayment schedules if they have any. But that’s far from enough. So, as George Clooney would say, what else?

CONTENT

As they stare a global recession in the face, African entertainment companies will have to rethink and reshape their strategic investments to survive. Although they will have to save money by divesting from some assets, they should also invest to preserve their future competitiveness. According to Nielsen, video consumption could soar as much as 60% in coming months. Broadcasters and streamers have already started to adjust their programming to match a viewing landscape dramatically different than even just one week ago. In Africa, StarTimes has opened up free access to more than 100 local and international channels on its streaming app, StarTimes ON, while MultiChoice is making several of its 24-hour news channels freely available to stream on DStv Now in South Africa. For now, news is getting most of the attention, but soon broadcasters will also have used up their backlog of original scripted content and they will need more, and more of different types of content. 

Studios and development executives are still looking for great IP, even if investment decisions may be delayed. Now is the time for African companies to invest in the content development and IP creation side of their business, through activities that are well suited to individuals or teams working remotely, so that they can be ready with solid projects when production can start again. Writing, of course, necessitates very little resources and can take many shapes and forms: news articles or blog posts, long form fiction or nonfiction, books, plays and screenplays, comics, or stand up comedy sets. Audio content can also be cheap to create: podcasts, audio book recordings, radio plays, music and songs of course. Animation and video games can still be produced by teams working remotely. And finally, even with the shutting down of film and TV sets, new video content can still be created by repurposing archive footage, finishing projects left on the back-burner, or filming short comedy or educational content at home with a smartphone and a laptop. In fact, after being bombarded this week by ads for online yoga and HITT classes, I find myself wondering why there aren’t any truly sleek African dance workout videos? Sherry Silver seems too busy to corner the space herself so it’s up for the taking.

And to finish this week, a special shout out to African creators doing their part by offering their educational content for free: Ubongo Kids, Bino & Fino, BRCK, and Nollywood’s highest grossing director and animation studio owner Niyi Akinmolayan who created an “understanding coronavirus” video in Yoruba, Igbo, Pidgin, Hausa and Effik versions after noticing that non-English speakers in Nigeria didn’t have access to this crucial information.

HUSTLE & FLOW #4: Global lockdown, MultiChoice challenges, TikTok Africa strategy, and more

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.

HUSTLE & FLOW #3: Data centers investment, telco growth strategies, mobile video for the mass market, and more

Dear colleagues and friends,

As international events such as the Africa CEO Forum, the Basketball Africa League kick off, MIP TV or SXSW get cancelled, companies ban all non-essential travel, and stores run out of toilet paper, it seems like the long-dreaded zombie apocalypse may be upon us. (One shouldn’t let a good disaster go to waste though - time to play the market). 

In Africa, if fake news is spreading much faster than the virus, stumbling oil prices resulting from lower Chinese and global demand are beginning to spell doom for oil-producers Nigeria and Angola. In any case, the show must go on, so welcome to the 3rd edition of HUSTLE & FLOW.

This week we are going to get a bit technical as we take a closer look at opportunities in data centers, telecommunications and mobile video. 

I've enjoyed chatting about African Entertainment in person with several of you last week in Los Angeles. Interest for African talents and stories is rising in Hollywood, and hopefully some of the exciting collaborations I’m hearing about will come to fruition soon. In the meantime, please keep your great comments, questions and referrals coming by emailing me at marie@restless.global.

Happy reading to all,

Marie

INVESTMENT NEWS

Emerging markets PE firm Actis has acquired a majority stake in Rack Centre, Nigeria’s leading provider of data center colocation and cloud services. Rack Centre hosts the Internet Exchange Point of Nigeria and has the largest installed capacity in West Africa servicing over 35 carriers, Internet Service Providers, and Mobile Network Operators. This news follows the recent announcements of Berkshire Partners’ acquisition of South Africa’s Teraco, the Africa launches of cloud data centers by Microsoft Azure and Amazon Web Services, and European data center giant Interxion's move into East Africa.

The development of local hosting capacity is a key ingredient of the growth of digital entertainment in Africa. At the moment most content consumed by African internet users is still hosted abroad, leading to long lag times and high costs. As the continent carries on its digital transition and demand for hosting capacity rises, data center trading is shaping up to be one of the largest investment trends in the coming years. If you have a few million (or dozen million) lying around, you might want to get in on this.

ARCHITECTURE

Nigerien architect Mariam Kamara, founder of Atelier Masomi, is set to begin construction on her sustainably-designed arts center in Niamey this summer. Like her previous projects in the city, the building will be built using compressed earth bricks.

And while we’re on the topic, here are more great examples of African architecture to feast your eyes on.

VISUAL ARTS

The new Yemisi Shyllon Museum, which opened last October in Lekki, Nigeria, would be a worthy addition to the above list. The museum is named after Prince Yemisi Shyllon, one of Nigeria’s biggest art collectors, who financed the construction of the building and its future maintenance to the tune of $1.7 million. 

BROADCAST

Multichoice’s VOD service Showmax has announced that more than 50% of its catalogue is now local content. Although Showmax is available across Africa, its investments in original content have so far been limited to South Africa.

Chinese pay-TV broadcaster StarTimes has added ESPN to its linear offering, making the sports channel available across Africa for the first time since a carriage dispute ended its deal with MultiChoice in 2013. Since then, fans in sub-Saharan Africa had been watching ESPN content on the ESPN Player subscription OTT service. The deal between Disney (which owns ESPN) and StarTimes was no doubt motivated by ESPN’s acquisition of the Africa broadcast rights for the NBA, which include rights for the new Basketball Africa League (BAL). 

SPORTS

Five-time boxing world champion Floyd Mayweather has announced its intention to expand its Money Team franchise in Africa, starting with South Africa, Nigeria, Kenya and Egypt. The Money Team offers specialized boxing programming based on Mayweather’s own training regimens, as well as virtual reality and personal training. The TMT franchise currently operates 44 outlets across the United States. 

The health and fitness sector has been growing alongside the westernization of urban lifestyles across Africa, with gyms, spas and healthy food options popping up everywhere. I believe there is an opportunity here for entrepreneurs who will manage to create strong, fun, scalable regional brands.

TELECOMMUNICATIONS

Telcos are Africa’s overlords. They run the continent and own the customers. Any business with a digital component will sooner or later have to deal with them. That is why it is crucial to understand the main forces at play in the African telco space.

A flurry of recent activity is giving us some interesting insights. Ethiopia is set to open the bidding process for the awarding of two telecoms licenses which have attracted the interest of Orange SA, MTN Group, Safaricom, Econet Global and Etisalat. In Angola, US-backed group Africell Holdings found itself the only bidder for the country’s fourth licence to run infrastructure-based mobile, internet, fixed telephony and pay-TV services. Meanwhile, South Africa’s Telkom is preparing to auction off some real estate assets to finance the modernization of its network while loss-making Cell C is considering acquisition offers; and Zimbabwe’s struggling state-owned telco NetOne has failed to attract an investor to take over its majority shareholding.

Although a couple “fresh” markets (such as Ethiopia) may remain, what we are witnessing overall is the maturation of the $60 billion Sub-Saharan African mobile market, which is now facing the same headwinds that have hit operators around the globe: saturated markets, evolving consumer preferences, slower subscriber growth and falling ARPUs (average revenue per user). Bain & Company sees two strategies for African telcos to survive this next phase: either focus on becoming a world-class network operator (as quality of service is still an issue on the continent), or choose to own the customer rather than the network by developing innovative lifestyle platforms that include content streaming, financial services, gaming, but also e-commerce or logistics. Kenya’s Safaricom is a proponent of this second strategy. Both approaches mean lots of opportunities for companies that can work with the telcos to achieve their goals.

MOBILE VIDEO

That takes us in a roundabout way to an interesting question I received last week from a HUSTLE & FLOW reader about Quibi, Jeffrey Katzenberg’s highly anticipated short form content start-up, and whether its model could be relevant for Africa. First of all, let’s stop a minute to acknowledge Katzenberg’s and CEO Meg Whitman’s tremendous fundraising abilities, as Quibi just added $750 million to its war chest ahead of its April 6 launch, after an initial round of $1 BILLION. Other than that, I must admit that I am a Quibi skeptic. Do we (or even Millennials) really need “one more thing to do with our phones instead of ever being bored”? In any case, it is not a solution built for the African market: too expensive, too premium, too heavy. Quibi’s most innovative feature is its proprietary Turnstyle technology, which allows users to switch seamlessly between landscape and portrait, actually bringing up different points of view on the same story. But Turnstyle videos use 20% more data than standard mobile videos - and that simple fact would make the service dead on arrival in Africa, where the price of data is already the biggest hurdle to the mass adoption of mobile video.

To expand on what I said last week, the opportunities I see in mobile video in Africa are for hyper-local, cheap content (such as local celebrities lifestyle, music videos, soaps or comedy in vernacular languages) distributed to the mass market through partnerships with telcos pursuing the “innovators” strategy described above. This is not actually anything new: in recent years all telcos have launched their own mobile music or video stores, with some turning out to be quite successful (MTN Music+/MusicTime!, MTN Comedy+) while others have bombed. Indeed, the transition from “dumb pipe” to content platform is anything but easy (just ask AT&T how its merger with Warner Media is going), that’s why none of the telco-owned services has managed to scale past a few countries and why none of them has expanded into original content yet. I believe that the bottom-of-the-pyramid mobile video market is still up for the taking and that a (well-funded) start-up with strong telco links has a better chance at this than any in-house service the telcos can come up with. 

Of course, the higher segments of the market will go to Netflix, which is already on track to adapt its offer to local specs. After implementing payments in local currency for South Africa, Nigeria and Kenya, it is now considering expanding the lower-priced, mobile-only option it piloted in India to Africa.

EVENTS

The events below may or may not happen. Who knows anymore!

FIHA, Abidjan, March 23-25

ARES Fighting Championship, Brussels, April 3rd

Cannes Film Festival, Cannes, May 12-23

Africa-France Summit on Sustainable Cities, Bordeaux, June 4th-6th

HUSTLE & FLOW #2: Netflix takes Africa, tourism deals in Ivory Coast, the "historical breakthrough of African fashion", and more

Dear colleagues and friends,

First of all, thanks to those of you who wrote back with words of encouragement after the first edition of HUSTLE & FLOW. Your enthusiastic feedback strongly validates the need for more actionable, business-focused information on the African Entertainment space, so here we go with episode 2: 

The big news this week is Netflix’s one-two punch entry into Africa, with the official launch of Netflix Nigeria, and the release of South Africa-made “Queen Sono”, the platform’s first African original series. Netflix’s intent for Africa is bold and ambitious -- I’ll talk more about what this means for African content and for the VOD space below.

Another topic that is top of mind right now is how the coronavirus pandemic will affect Africa. At the time of writing, only 3 official cases had been reported on the continent (in Algeria, Egypt and Nigeria) and Kenya had suspended all flights from China. China is an important player and investor in the African tech and media space (through companies such as Huawei or StarTimes). Besides concerns over African countries’ preparedness to handle the virus, the longer term issue is how the current Chinese lockdown will impact African economies (Spoiler alert: it’s not looking good, but also temporary and nothing we haven’t seen before). 

Do continue to refer more people to this newsletter as you’ve been doing this past week. For the moment I am keeping HUSTLE & FLOW confidential so I haven’t activated a subscription link. To be added to the list just drop me a quick line directly at marie@restless.global.

And finally, please don’t hesitate to send me questions or topics that you’d like to see covered in future editions of HUSTLE & FLOW, as well as suggestions for improvement.

Happy reading to all,

Marie

INVESTMENT NEWS

International football star Didier Drogba recently concluded a roadshow that has helped his birthplace, Côte d’Ivoire, collect MOUs for a total of $15 billion in commitments to back a variety of tourism projects, including hotels, exhibition centers, waterparks, seafronts, resorts, tourist routes, retail centers and eco-tourism developments. Tourism is Ivory Coast’s third economic pillar after agriculture and energy, and the country forecasts 4 million tourists arrivals (up from 2 million today) bringing in more than $1.5 billion by 2025. Many other countries in Africa could benefit from similarly aggressive tourism development strategies.

BROADCAST

Ivorian public broadcaster RTI has launched its new television channel, RTI 3, dedicated to young fans of sports and music. RTI 3 will be available on the Canal+ and StarTimes bundles as well as on DTT (Digital Terrestrial Television / TNT en francais). 

Africa’s on-going (and fraught) transition to DTT has been one area of strong interest for global operators such as StarTimes, DSTV, Canal+, but also the very French M6, which acquired a 33% stake in Ivorian channel Life TV in 2017. However, the initial excitement of some investors over Africa’s DTT potential was based on the flawed assumption that more spectrum = more cheap channels = more content = more viewers = more revenue. That equation was false because it forgot to take into account the fact that in most African countries the pool of TV advertisers is still very small. So in reality what we’re seeing is simply more channels that end up competing over the same advertising budgets from a limited number of brands. My view is that investing in DTT is necessary and interesting for existing operators but very risky for new entrants. More on the (very complex) topic of Broadcast and what can be done in the space in Africa in future editions of HUSTLE & FLOW.

FASHION

Last week I mentioned the buzz created by Cameroonian designer Imane Ayissi at Paris Haute Couture Fashion Week. Well, turns out there were not one, but three African designers hogging the spotlight on the Parisian catwalk this year, as Ayissi was followed by Austrian-Nigerian 2019 LVMH Prize finalist Kenneth Ize and South African 2019 LVMH Prize winner Thebe Magugu, whose separate collections also garnered rave reviews. While Le Monde talks about “the historical breakthrough of African Fashion”, we might very well be witnessing the birth of the next global fashion brands. 

VISUAL ARTS

Not to be outdone, the Visual Arts also shone last week as collectors flocked to the 1-54 Art Fair in Marrakesh. While some fear foreign speculators will snap up major works cheaply leading to a masterwork exodus out of Africa, others point to the growing number of African collectors and their private museums. In any case, contemporary African art is becoming both an asset class in itself, and a new sector in need of structure and expertise. 

SPORTS

Here is a lovely profile of Sarah Chan, the Sudanese-born Africa talent scout for the Toronto Raptors, which would make a great film or TV series. I’m too busy to snap it up for myself so I’m offering it to you here :-)

I have Mark Kaigwa to thank for the link - and actually I highly recommend Mark’s awesome newsletter The Letter N and his company Nendo if you’re interested in smart African social media trends and analysis.

FILM & TV

Before we get to the big chunky piece of G.O.A.T. meat that is Netflix, let’s acknowledge the good performance of African filmmakers at the recently concluded festivals in Sundance (“Farewell Amor”, “Softie”, “Cuties”, “This is not a burial, it’s a resurrection”) and Berlin (several films including “This is My Desire”, the first Nigerian film to be selected). These are all talents to track.

Now on to our main story. Netflix began its careful exploration of the African market a few years ago, starting with a few acquisitions in South Africa and Nigeria. Last year, it announced the commission of its first 2 original South African TV series, and went on a buying spree in Nigeria, snatching up basically all the top Nollywood titles (it also acquired “Lionheart” before its release to brand it its first Nigerian original film). The success of these films on the platform, and especially of “King of Boys” and “Moms at War”, emboldened the streamer to push forward. Last week, Netflix Nigeria officially launched with a clever Twitter campaign and a star-studded event attended by Ted Sarandos himself, during which its first Nigerian original TV project, a 6-part sci fi series by Akin Omotoso, was revealed. Just a few days later, Netflix’s first ever African original TV series, the South African-produced “Queen Sono”, premiered on the platform. I binged-watched it of course.

Why is this a big deal? Netflix has solid plans for Africa, and this is only the beginning. Their presence and their approach in Nigeria specifically will lead to an increase in content quality (more than in quantity as Nollywood already produces prodigious amounts of content), and in demand for professional studio space, equipment, crew, and development expertise. It will also educate the global market about Nigerian content, and de-risk investment in the country’s film industry for other international players. So, thanks Netflix.

VOD

A question I often get asked is: is there still anything to do in the VOD space in Africa? Well, the short answer is no. The battle over streaming in Africa is over before it even started and Netflix has won (I don’t trust Digital TV Research numbers but the order of magnitude feels correct).

I know some people have a hard time believing this as it’s still early for African VOD. Yes, eventually the other global platforms will make their way to the continent as well. As the only deep-pocketed local player, Showmax might survive for a while, limping and sickly, but I’m not even sure about that. I also have great respect for Jason Njoku and what he has achieved with Iroko. His wife Mary Njoku, Founder and CEO of ROK Studios, which sold to Canal+ last year, is responsible for one of the very few exits of the sector. Jason has announced his plans to take Iroko public in 2021, but I do not see this happening neither do I see another path forward, especially now that Netflix is stepping up its Naija game. 

Here’s the thing: When it comes to Netflix’s play in Africa, it is not even about the money they’re bringing or the kind of deals they’re doing. For an industry and a continent that has struggled to be seen and appreciated for, truly, hundreds of years, the fact that a prestigious global brand now says “We’ve seen you, we’ve noticed your talent, we appreciate your stories and the way you tell them” is extremely powerful and will buy Netflix decades of goodwill (just like it did for Black Panther’s Ryan Coogler). And with this, they can go anywhere they want. 

A caveat though to my earlier statement: I do see opportunities in online video for local players or new entrants targeting the mass market with simple, basic, gamified, mobile-only solutions. Stay tuned for more in future editions of HUSTLE & FLOW.

EVENTS

FIHA, the premier hotel investment conference in Francophone Africa will take place at the Sofitel Abidjan Hotel Ivoire on March 23-25.

And finally, there are some concerns that the following events might get cancelled or postponed for corona-reasons, but at the moment they’re still happening:

MiP TV, Cannes, March 30th-April 1st

ARES Fighting Championship, Brussels, April 3rd

Africa-France Summit on Sustainable Cities, Bordeaux, June 4th-6th

HUSTLE & FLOW: a Newsletter about Investing in African Entertainment

Dear colleagues and friends,

I’m excited to launch HUSTLE & FLOW, my newsletter about business and investment opportunities in the African Entertainment sector. 

Why HUSTLE & FLOW? Well, partly as an homage to the iconic 2005 Sundance Audience Award winning film directed by Craig Brewer and produced by John Singleton. The press junket with star Terrence Howard for the release of the film was one of my very first interviews as a budding 23-year-old journalist at CNN in New York (he said he liked my outfit - I kept the tape). 

But HUSTLE & FLOW is also a reference to the entrepreneur’s hustle and the investor’s deal flow in the Entertainment sector, which are the core of what this newsletter will be about. Here I will be using the term Entertainment to encompass what is often referred to as the Cultural and Creative Industries (film, TV, animation, video games, music, fashion, visual arts, architecture and publishing), but also Sports and Hospitality, as all these sectors are related and intertwined, and present numerous synergies. 

The global Creative Industry generates $2.25 trillion annually (more than global telecommunications), is a major provider of jobs (30 million globally), and is particularly resilient to economic downturns, while the global Sports market in itself is set to reach $614 billion in 2022. But despite Africa’s undeniable wealth of raw talents, these sectors are very much under-funded and under-developed on the continent. That is the textbook definition of an untapped opportunity. 

For most traditional investors however, Entertainment is also a new, mysterious and slightly esoteric field which they perceive as very risky (“Artists don’t know how to run a business”, “There is no way to predict if a film is going to be successful or not”, “Piracy sucks out all the profit from content production”, “All football clubs lose money”, “Africans don’t have enough disposable income to spend on non-essential items”).

And yet they may have also noticed that every bar, club or festival they go to from Los Angeles to Tokyo now plays Afrobeats, that Zimbabwean-American “Walking Dead” star Danai Gurira just signed a juicy overall deal with ABC Studios, that Cameroonian designer Imane Ayissi was the talk of the latest Paris Fashion Week, or that Nigerian fighters squarely dominate the UFC.

What does this all mean? And really, where is the money? I have survived 15 years of being 15 years too early as a creative entrepreneur in Africa, during which I have launched several companies, closed down a few, advised many, and successfully exited one. These experiences have taught me what works, and what doesn’t.

In the meantime, the world has also changed and very crucially, entertainment consumption has gone truly global thanks to the explosion of content, social media and e-commerce platforms such as Netflix, Amazon, Spotify, YouTube, Facebook, Instagram or ESPN that are now connecting African talents to the world. That is a true game changer and the reason why you should be paying attention.

In this newsletter I will attempt to demystify the African Entertainment space and help you identify investment opportunities by sharing news, trends and key figures, as well as calls for projects and relevant events. Although I will link to existing articles or reports, I will also include exclusive market insights that I typically do not share widely or publicly. 

If you are receiving this email it is because our recent interactions have made me think that you might have an interest in these topics. If you know of anyone in your network who would benefit from some HUSTLE & FLOW, please have them email me. And if you would like to stop receiving these emails, just let me know ;-)

I am looking forward to your feedback, comments and questions as I work through the kinks of this new format.

Happy reading to all,

Marie 

INVESTMENT NEWS

Afreximbank makes a statement with the launch of a $500M fund to support the production and trade of African cultural and creative products over the next two years. The funds will be accessible as lines of credit to banks, direct financing to operators and as guarantees. The fund’s first investment is a $190-million facility to Kojo Annan’s Made In Africa Inc. (MIA) for the acquisition of Vlisco, the leading producer of African wax fabric whose Dutch ownership had been a source of controversy in Africa. An interesting move which can be seen as re-appropriating cultural appropriation.

Emerging Capital Partners acquires Burger King South Africa from Grand Parade. ECP, the investment firm that’s been quite successful at developing the Java and Artcaffe franchises in Kenya, believes that it can bring growth where GPI has failed.

Et ici en français dans le texte pour encore plus de details.

South African Pay TV operator Multichoice launches its Innovation Fund to invest in South African black-owned SMEs in the Video Entertainment and Technology space.

FILM

“Americanah” author Chimamanda Adichie hosted Kenyan Hollywood actress Lupita Nyong’o last weekend at Mo Abudu’s new EbonyLife Place in Lagos at a diner attended by heavyweights of the Nigerian Creative sector. Nyong’o is producing and starring in the TV series adaptation of “Americanah” for HBO which is set to start shooting soon.

FilmOne Entertainment, the leading Nigerian distributor and production company, has gone into production on the first movie of the $1 million film fund it launched with China’s Huahua Media and South Africa’s Empire Entertainment in December. FilmOne plans to eventually finance 8-10 films as part of this first slate.

The poster for 'Namaste Wahala', the Nollywood Meets Bollywood crossover movie which promises exciting images of an over-the-top Nigerian-Indian wedding, goes viral on social media. Let’s see if the film can live up to the hype when it comes out in Nigerian theaters on April 24th.

Grammy-award winning director Melina Matsoukas and British-Ugandan 'Get Out' star Daniel Kaluuya hit the red carpets of Lagos and Johannesburg for the release of their film ‘Queen & Slim’. This might look like your normal promotional tour except that it is not: US studios typically don’t bother sending their stars to promote the African releases of their films as these markets are considered insignificant. But in the past couple of years several Black Hollywood stars such as John Boyega or David Oyelowo (and Lupita Nyong’o - see above) have made the trip, pointing (just like the “Americanah” project) to growing links between Hollywood and Nollywood.

If this feels like a lot of Nollywood news it’s because A LOT is going on. I am very bullish (as you may already know) about the Nigerian film industry. I’ll have more opportunities to explain why in future editions of HUSTLE & FLOW. 

VISUAL ARTS

British-Nigerian artist Yinka Shonibare is building project spaces and artists residencies in Lekki in Lagos and on a farm in Ijebu to support what he sees as “an African renaissance”, citing the positive influence of Tokini Peterside’s Art X Lagos fair in growing the African visual art market. Less than a year ago, Nigerian-American artist Kehinde Wiley had opened his own Black Rock residency in Dakar, Senegal. Both are art world superstars who are financing their projects mostly through their own funds, but they will need financial and institutional partners to ensure their sustainability. 

SPORTS

The Basketball Africa League (BAL) announced the 12 teams (Angola, Egypt, Morocco, Nigeria, Senegal, Tunisia, Algeria, Cameroon, Madagascar, Mali, Mozambique and Rwanda) that will be competing in the inaugural season set to tip off in Senegal on March 13th. The launch of BAL shows the NBA’s commitment to growing the game on the continent. At the moment, African broadcast rights for NBA matches are still pretty cheap and basketball is clearly nowhere as popular as football, but the potential for mass adoption is real.

French development agency AFD and Paris 2024 announced a partnership to support 24 athletes to deliver social and environmental projects, both in France and in Africa. AFD is also currently building an online platform whose aim will be to promote and raise financing for sports development projects in Africa. The platform, dubbed “Sport en Commun” (Sports together), will be launched in June during the Africa-France Summit in Bordeaux.

The ‘Match in Africa’ opposing Roger Federer and Rafael Nadal in Cape Town on February 7th raised over $3.5m to support early childhood development initiatives in schools all over Southern Africa. It also hit a Guinness World Record for the highest number of people in attendance at a single tennis match – over 51,000.  

CALLS FOR PROPOSALS (ANIMATION)

The Africa Digital Media Foundation (ADMF), in association with Heva Fund, Rubika, ADMI, and the Association of Animation Artists will be supporting select East African animators to attend The Annecy International Animation Film Festival and Market, which has a special focus on Africa this year. Interested animators should apply here. 

The 4th edition of Digital Lab Africa, the platform dedicated to digital creative content, is calling all African creatives to submit their projects in animation, video game, digital art, immersive realities and music before March 1st, 2020.

See a trend here? Yes, French development agencies are very much interested in supporting the growth of the animation and gaming sector in Africa. Animation production requires big teams and the sector has the potential to create a large amount of jobs for the youth through outsourcing or original content creation. However the market for African animation is still basically non-existent, with only a couple buyers willing to pay ridiculously low prices per episode. There is a way to game the system (no quick fixes though, TIA) - hit me up if you want to hear more.

EVENTS

AfDB will be holding its Fashionomics Masterclass in Nairobi on February 26 and 27. The class will engage local creative entrepreneurs operating in the textile, apparel and accessories industries to equip them with the know-how to establish successful fashion brands from concept to execution. This Masterclass sold out very quickly - demand is very strong for this type of hands-on business training dedicated to the creative industries. There’s an opportunity here to standardize and scale - who will take it?

I will be at MIP TV in Cannes on March 30th, 31st, and April 1st, where I will be facilitating the MiP CLINIC - DRAMA on How to Producing in and with Africa, TV Drama’s Last Frontier:

With the steady rise of global platforms, the next hit TV drama can now come from anywhere. In this context, content from Africa is not only the last frontier, it also presents potential crossover appeal to audiences in Europe and America. What are the right strategies, opportunities and partners to produce the future top dramas from Africa?

Also keep an eye on the 2nd meet of the ARES Fighting Championship, the Afro-European MMA League launched by Vivendi Sports, taking place on April 3rd in Brussels. I think they are onto something - come see it for yourself if you are nearby.

And finally, mark the Africa-France Summit on Sustainable Cities in your agendas. It will take place in Bordeaux, France from June 4-6 and will feature several sessions on Sports and Creative Industries development and investment. I will be there!