challenges & opportunitities for digital tv in africa
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© NDS Ltd 2010. All rights reserved.
Challenges & Opportunities
A presentation by Jason Lobel, Regional Director: Africa
Opportunity Markets for Television
EQUATORIALGUINEA
NAMIBIABOTSWANA
ZAMBIA
SOUTH AFRICA
TANZANIA
ANGOLA
MAURITIUSREUNION
MOZAMBIQUE
SWAZILAND
LESOTHO
MALAWI
EGYPTLIBYA
MOROCCOTUNISIA
ALGERIA
WESTERNSAHARA
ETHIOPIA
SUDAN
SOMALIA
MADAGASCAR
COMOROS
SEYCHELLES
KENYAUGANDA
DJIBOUTI
NIGER
NIGERIA
MAURITANIAMALI
BENINGHANA
IVORYCOAST
TOGO
LIBERIA
SIERRALEONE
GUINEA
BURKINAFASO
SENEGAL
CAPE VERDE
GUINEABISSAU
CHAD
DemocraticRepublic
of CONGO
SÃO TOMÉ & PRÍNCIPE GABON
CENTRALAFRICAN REPUBLIC
BURUNDI
RWANDA
CAMEROON
Rep. ofCONGO
ERITREA
ZIMBABWE
Region 1a: South Africa
Region 1b: Southern Africa
Region 2: Portuguese Africa
Region 3: East Africa
Region 4: West Africa
Region 5: French West Africa
Region 6: French Central Africa
Region 7: French North Africa
Region 8: Arab North Africa
Region 9: Horn of Africa
Region 10: Indian Ocean Islands
POTENTIAL
100m TVs across 60m households
Over 100 Locally Produced Channels53 Countries
1 Billion People
SIZE
BUT... LIMITED SUCCESSOnly 1 Pay TV Platform has
managed to exceed 1m Subscribers and rest only have less than 400k each
EVEN FTA IS LIMITED Despite an explosion of FTA players, majority of ad spend in South Africa. Only 1 player has syndicated across Africa
Challenges in the African Television Market
Significant rise in the cost of Premium content particularly sports and these content rights controlled by established players
Access to Content
Cost of production is high with Typical production costs ranging from $7,000-$15,000 per hour
Cost of Local Production
Limited FundingHigh set-up costs
Limited CapitalFinancial System
Few consumer have bank accountsAvailability of funding
Foreign Ownership
Most market have restrictions on foreign ownershipKeep control strategic assets
Advances in the Africa Television Market
Regulatory Framework
New licenses for both private FTA and Pay-TVRegulation of content rights
Emerging Content
Growing market in local productionNollywood - world’s 2nd largest production market
Growth of Free-To-Air
Explosion licensed FTA broadcastersGrowth spurred by liberalisation across the region
Mobile Money
Concept of prepaid is African innovationAfrica is pioneering mobile money transfer
Affordable Pricing
Growth low cost bouquets on incumbent platformsNew entrants in the Sub-$20 range
Sub-Saharan Pay TV Players
EQUATORIALGUINEA
NAMIBIABOTSWANA
ZAMBIA
SOUTH AFRICA
TANZANIA
ANGOLA
MAURITIUSREUNION
MOZAMBIQUE
SWAZILAND
LESOTHO
MALAWI
EGYPTLIBYA
MOROCCOTUNISIA
ALGERIA
WESTERNSAHARA
ETHIOPIA
SUDAN
SOMALIA
MADAGASCAR
COMOROS
SEYCHELLES
KENYAUGANDA
DJIBOUTI
NIGER
NIGERIA
MAURITANIAMALI
BENINGHANA
IVORYCOAST
TOGO
LIBERIA
SIERRALEONE
GUINEA
BURKINAFASO
SENEGAL
CAPE VERDE
GUINEABISSAU
CHAD
DemocraticRepublic
of CONGO
SÃO TOMÉ & PRÍNCIPE GABON
CENTRALAFRICAN REPUBLIC
BURUNDI
RWANDA
CAMEROON
Rep. ofCONGO
ERITREA
ZIMBABWE
EQUATORIALGUINEA
NAMIBIABOTSWANA
ZAMBIA
SOUTH AFRICA
TANZANIA
ANGOLA
MAURITIUSREUNION
MOZAMBIQUE
SWAZILAND
LESOTHO
MALAWI
EGYPTLIBYA
MOROCCOTUNISIA
ALGERIA
WESTERNSAHARA
ETHIOPIA
SUDAN
SOMALIA
MADAGASCAR
COMOROS
SEYCHELLES
KENYAUGANDA
DJIBOUTI
NIGER
NIGERIA
MAURITANIAMALI
BENINGHANA
IVORYCOAST
TOGO
LIBERIA
SIERRALEONE
GUINEA
BURKINAFASO
SENEGAL
CAPE VERDE
GUINEABISSAU
CHAD
DemocraticRepublic
of CONGO
SÃO TOMÉ & PRÍNCIPE GABON
CENTRALAFRICAN REPUBLIC
BURUNDI
RWANDA
CAMEROON
Rep. ofCONGO
ERITREA
ZIMBABWE
Nigeria FTA Players- State FTA: 124 Channels- Local Terrestrial : 8 Players- Cable Operation: 4 Players
East Africa FTA Players- Kenya: 7 Players- Uganda: 24 Players- Tanzania: 5 Players
Ghana FTA Players- 6 FTA Players
Senegal FTA Players- 5 FTA Players
Subsidies into Africa
Launch: R499Pre Top TV: 399 (box only) Launch in Nigeria: Nr9,000
In 2009, the target price for DTT STB was around R700, what will the target price be for DVB-T2 box now?
Government will need to formulate a Strategy to make DTT STBs affordable in comparison to DTH Pay-TV STBs
Current: R299Top TV 2010: R649Current South Africa: 599Pre Star: Nr20,000Current Nigeria: Nr10,000
TV Channels
Radio Channels
Its not just the box pricing…
=
Pay TV Providers will position their entry point offerings to compete head to head with FTA DTT services with
aim of later up-selling “DTT” acquisitions onto higher packages
Lack of Audience Data = Lack of Ad Spend
8
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50
100
150
200
250
Ken
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Zim
babw
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Nig
eria
Cam
eroo
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Gha
na
Cot
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Ivoi
re
Uga
nda
Ang
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Nam
ibia
DR
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Sen
egal
Tanz
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Bot
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Advertising Spend Excl South Africa (US$m)
3,424
968
South Africa Rest of MUSA
Advertising Spend South Africa vs. Rest of sub-Sahara(US$m)
Explosion of Free To Air players over the past 10 years in Africa
Outside of South Africa there are few industry wide Advertising Measurement bodies
Most of the players are small terrestrial operations with limited coverage
BUT CA gives each STB an unique address
User registers for the service and married to STB address
FTV
Signal distributed encrypted Can only be accessed by a STB that
has been entitled to receive the signal i.e. registered users only
Although there is CA, the service is still provided free of charge/subscription
Visibility on the exact number of households addressed and even what they are watching
Free-To-Air (FTA) vs. Free-To-View (FTV)
9
FTA
Signal distributed completely open Any compatible devise can receive the
signal BUT - no way to tell how many devices
are watching or even what they are watching
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OpenEncrypted
Not only who is watching but what and when are they watching...
10
EPG Advertising
Based on the EPG Framework infrastructure of EPG
Updates, the EPG enables operators to create new
revenue streams for advertising using
–EPG real estate
–Program banner
–As overlay on top of video
Ads can be targeted to
– Individuals or groups (based on card id, stb id)
–Channels (services) or Events11
Sharing to Generate Economies of Scale
PlatformA
PlatformB
PlatformC
PlatformD
Content
Headend
CAS SMS
Distribution
12
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Sharing to Generate Economies of Scale
PlatformA
PlatformB
PlatformC
PlatformD
Content
Headend
CAS SMS
Distribution
13
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Content
Headend
CAS SMS
Distribution
Ops TeamHeadcount
Call Centre
MUX
CPE
STB EPG
Each Platform compliments its own content with a bouquet of common content+
Single Operations Centre including full operations team & Uplink/Teleport
Common CAS and MUXHosted Call CentreHosted SMS
MUX
Shared Transmission Network DTTCommon Space Segment on a shared transponder(s)
Common STB Platform running Multiple UIs/EPGsCommon Smart Card Platform but individually branded cardsEach Platform still retains its own UI/EPG
Shared Distribution
The Power of a brand
14
Platform Branding EPG Branding
Device BrandingBranded OTT Clients
In Summary
Ensure STB conform to common standard
Develop long roadmap to address entire baseConformance & Brand
Market to be developed
DTT cannot be based on a build it and they will come attitudeContent needs to be compelling
New Players, New Standards
New Platforms
Market has evolved
Consumer Choice
Many players chasing the same consumersOffering needs to be compelling
Economies of Scale
Shared Infrastructure, common STB and EPG to generate economies of scale
Confidential ©NDS Ltd 2009. All rights reserved. 16
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