IN JANUARY, movie streaming giant Netflix launched in 130 countries globally, including all 54 African nations. The question in Africa was whether South African pay TV service MultiChoice, which has dominated the continent for over 20 years, would survive.
It was an interesting question, but not the most important one that should have been asked. To understand why, one needs to take a view of what has been happening in the Kenyan capital, Nairobi, over the past few weeks.
Grammy-winning British singer Estelle Fanta Swaray, simply known as Estelle, had a well-attended show in July.
Before that, popular South African house band Mi Casa returned to Nairobi – they have been in town several times – and put up an electrifying show at a small but trendy bar in upmarket Nairobi called The Alchemist. Further down the road, the stylish Mafikizolo, a South African singing duo, will also put down a performance in late July.
CORNERING THE MARKET
The music tastes on which these musicians are riding are due in part to MultiChoice, and of course the FM radio explosion and YouTube.
MultiChoice has dominated the Kenyan pay TV market in the way it has in much of the rest of Africa. From a variety of cartoons for the young ones, to sports heavy content to African produced shows, they cornered the market by simply giving more than any other company had and taking advantage of the economies of scale that came from operating in 49 African countries.
In the process, it has extensively shaped the views of their newest customer, the African millennial.
With shows like Jacob’s Cross and Tinsel, the company attempted to tell locally-flavoured stories that appealed to wider African audiences.
While its Big Brother show was, to critics, debauchery at its very best (or worst), it still proved that at the core we are all the same.
With shows like Studio 53, Africans got a chance to see other sides of the continent rarely shown to each other, such as festivals in Djibouti and wonderful architecture in Tanzania. The show was a chance to visit your neighbours without leaving the comfort of your couch.
If local football ignites passions in Africa, European football drives people on the continent into a frenzy. Game days are big draws in many bars that make a killing showing the games.
An extra layer of business has been added to this, with the advent of sport betting. Now, the many league fans can put their money where their mouths are and bet on their teams – in some countries, the betting has reached epidemic proportions, leading to calls for bans. It is a business model that would not exist without Multichoice.
Easily the leading shaper of contemporary youthful Africans’ music taste, has to be Multichoice’s Channel O.
Its launch in 1997 gave young people the chance to view new music almost as soon as the rest of the world. They also got to learn about African music not from their countries. TK Zee’s kwaito hit Dlala Mapantsula was as well known in several African capitals in 2001 as it was in Johannesburg; the group had sold out shows on tour in the continent.
Before the flashy music videos of today, most African millennials were watching the trailblazers struggle with getting the blue and yellow balance right in their videos.
But times have changed. New music is released on YouTube at the same time for everyone now and conversations dissecting the imagery and message are held in real time. They are part of a global conversation.
Netflix’s entry into Africa then was less about access and more about Africa finally being seen as a possible market, because Netflix would not make a difference to countries like Mali, whose painfully slow internet speeds have led to the closure of businesses.
THE REAL BATTLE
The real battle then, is in a place where Netflix is not playing strong. Multichoice in recent times has been targeting the bottom of the pyramid with their GoTv packages.
It is a strategy that banks on size to drive sales. The theory is, margins are small in this segment of the population but the population size is huge, so you break even. According to Naspers, the parent company of Multichoice, growth from September 2014 to September 2015 was 1.4 million new subscribers on the continent, driven by “lower priced bouquets”.
Reliant on good internet, Netflix faces many challenges on the continent. A lot of their content is still restricted and to make it in Africa, there needs to be a focus on mobile, which is what a majority of the continent uses to access the internet.
Time will tell if the young Africans raised by MultiChoice will remain loyal as their options increase. What is not in doubt, is what they have become watching it for most of their lives.