African Video On Demand Platforms for Film.
On July 31, 2020, Cinema Ug hosted Agnes Aistleitner on their Facebook Live for their online discussion series, where they discussed the video-on-demand platform Eebo World in Uganda. Agnes Aistleitner, the CEO of this streaming platform, had pledged to revolutionize the streaming of movies and other video content in Uganda and eventually across Africa.
As of November 20, 2023, Eebo World's social media platforms last posted on July 9, 2021. The website they used, www.eeboworld.com, is no longer active. However, www.eebomedia.com is operational and prompts users to enter their email to be on the mailing list for an upcoming release, indicating that they are likely developing something new to be shared soon.
Eebo is among the many African startups in the video streaming sector struggling to gain traction with the African audience.
Why are start-ups failing?
One of the most significant reasons is the low internet penetration in Africa. According to Statistica, only 39% of Africans in Sub-Saharan countries had access to the Internet by 2022. This is compounded by high poverty rates in contrast to the higher prices of data. For instance, on average, one gigabyte of mobile internet in Sub-Saharan Africa amounted to 4.47 U.S. dollars in 2022, ranking among the highest globally, according to the source. In Uganda, as of November 20, 2023, it's around 0.8 USD, which is still a considerable amount compared to the poverty rate of Ugandans, with close to 30% still living below the poverty line.
In Northern Africa, the price for mobile data was significantly lower, averaging 1.05 U.S. dollars. Several factors contribute to the elevated prices of mobile data in Africa, such as high taxation by African governments and a lack of infrastructure. In June 2021, approximately 57% of the population in Sub-Saharan Africa lived within a range of 25 kilometers from fiber networks, leaving the other 43% unable to access the internet or requiring relocation to access it.
Eebo World aimed to address this problem by introducing Wi-Fi hotspots that people could use to download movies within the app at a set price (2000 Uganda shillings at the time). We can only hope that this proves to be a viable business model for survival.
State of Africa’s Video on Demand Sector.
As of June 2023, Netflix leads the African streaming service providers with over 2.6 million subscribers, who are mostly in South Africa. Showmax, owned by Multichoice, follows with about 900,000 subscribers, trailed by Amazon Prime and Apple Plus TV. However, these numbers are still modest compared to Africa's 600 million-plus internet users.
Netflix, like many international streaming giants, has more advantages over African streaming platforms. One of these advantages is the international market. With over 247 million worldwide subscribers, Africa contributes only 2.7 million, which is just about 1% of their total subscribers. This allows Netflix to balance losses in Africa with profits in other parts of the world. Additionally, it can distribute content from Africa across the globe, creating a bigger market for its African content. This is evident in its recently released viewership report where all the top ten most viewed African content was available globally. According to another Netflix report released this year, the streaming giant has invested over USD 175 million in Africa for content acquisitions (licensing) and commissioning between 2016 and 2022.
This is a significant amount but still lower than what Showmax has invested, which is over USD 330 million. This includes the production of African originals like Shaka Ilembe, which itself cost over USD 65 million to make and market. Despite high investment, 12% year-on-year subscriber growth, and launching a year earlier than international streaming platforms like Netflix and Amazon Prime, Showmax hasn’t benefited much compared to Netflix. It lags in the number of subscribers and suffered a significant loss of over USD 64 million last year (2022) alone.
With a strong streaming giant like Showmax struggling to keep up with the competition from international giants that have entered Africa, small upcoming streaming platforms face even bigger challenges in attracting and retaining new audiences. Retaining an audience is an even bigger challenge due to the lack of variety and consistently good quality content. This is mainly because producing and marketing good content to the right audience is expensive.
International platforms have it easier as they use existing structures to produce and market their content. They also pay better for their originals compared to African streaming platforms. To add salt to the wound, most African creators prefer international platforms due to the reputation and market they offer, even though most of their licensing deals may not be as lucrative. This complexity adds to the challenges faced by local platforms in acquiring high-quality content, a crucial factor in determining a platform's success.
Some of the failed platforms include Kwese TV streaming platform by Zimbabwean company Econet, and Telkom One, a South African streaming service that also closed last year, following Vodacom in the same year.
African Content.
Nigeria holds the distinction of being the second-largest film-producing country globally, following India. Despite this prolific output, much of Nigeria's modern film content remains relatively unknown to many Africans. This lack of widespread recognition can be attributed to a combination of factors. Firstly, local streaming platforms in Nigeria have not actively expanded to other African markets for content distribution. Additionally, the strong cultural preference for local cinema plays a role in limiting the reach of Nigerian films beyond their borders since most income for producers is earned in local Cinemas.
The Nigerian content that gains visibility across the continent often does so on international platforms like Netflix (featuring titles such as Blood Sister (2022), The Origin: Madam Koi Koi (2023), Shanty Town, and more) and Amazon Prime (showcasing films like Brotherhood, Battle of Buka Street, Gangs of Lagos, and more). Consequently, local streaming platforms in Nigeria find themselves with a relatively small market to distribute their content—primarily confined to their own country.
A similar scenario exists in South Africa, where despite being a significant contributor to the African film landscape, the reach of local streaming platforms is constrained. Instead, South African content gains prominence on global platforms such as Netflix (e.g., Blood and Water), Showmax (e.g., Shaka Ilembe), and Disney+ (e.g., Kizazi Moto Generation Fire). This trend underscores the challenge local streaming platforms face in expanding their market beyond their national borders. Other countries have it even worse.
Situation in Uganda.
Despite the inherent challenges in the business landscape, Africans, including those in Uganda, remain undeterred in their efforts to develop new streaming platforms. In Uganda, numerous streaming services have emerged, although many have faced difficulties gaining widespread popularity. Telecom companies streaming services like Airtel Uganda-backed Airtel TV and MTN Uganda-backed Yo TV have struggled to curate compelling content for their subscribers.
Media companies, too, have encountered their share of obstacles with their streaming platforms. In 2014, NTV Uganda introduced NTV Mobi, a streaming app focused on news consumption, although its impact on the media landscape remains uncertain. In 2021, Next Media launched Afro Mobile, an app designed for Entertainment and News, offering access to various television and radio stations. They reported having over 500,000 subscribers by 2022, although the status of their paying subscribers remains unclear. Afro Mobile has expanded its offerings to include a film section in collaboration with Pearl Wood.
The streaming landscape in Uganda also includes small startups like Pearl Movies, Watufy, and Eebo World, among others. These startups face additional challenges in scaling, given limited marketing budgets and reluctance from content producers to share their content. Despite these hurdles, the drive to establish and grow streaming platforms persists in Uganda.
Conclusion.
The Video on Demand market in Africa appears to be viable mainly for companies with substantial budgets that can absorb losses in Africa through gains in other parts of the world. These large companies also possess the financial resources to produce high-quality content and effectively market it to diverse audiences.
Currently, this model is more successful in specific markets such as South Africa, Nigeria, Kenya, and Egypt. However, many other countries, including Uganda, have a considerable distance to cover in establishing a sustainable Video on Demand market. The challenge is exacerbated by economic factors, as the prevalence of poverty hinders widespread adoption of paid content consumption, impacting both Video on Demand services and traditional cinema culture.
To foster a thriving Video on Demand industry, there is a pressing need to find effective ways to encourage creators to produce compelling content based on African stories. Elevating the standards of quality required will likely lead to an increase in high-quality content production.
Streaming giants will naturally gravitate towards the best content, leaving room for other platforms to thrive with quality offerings.
Let's continue to cheer for small companies like Eebo, adapting to the African market with innovative business models. Their contributions diversify the Video on Demand landscape, adding unique perspectives that may in the long run help Africa control the narrative in Africa and at a global scale.
By Martin Kabagambe