November 2017 - Digital TV Europe
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November 2017
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pIFC Spacecom DTVE MEA17.indd 1 26/10/2017 09:35
Digital TV Europe Middle East & Africa 2017 > Contents
November 2017
Winds of change Middle East & Africa
The Middle East and Africa are seen as emerging markets for pay
TV. Video consumption across both regions remains largely
dominated by free TV and there is plenty of room for growth.
2017
However, new OTT TV services are beginning to make an impact, and the Issue no 335
way pay TV operators are marketing their services is changing in response.
In Africa, multiple entrants offering lower-cost options have challenged Published By:
MultiChoice’s dominance of pay TV. These include recent entrant Kwesé TV KNect365 TMT
from Econet Media. In this issue of Digital TV Europe’s Middle East & Africa, Maple House
we interview Econet Media CEO Joseph Hundal about the company’s plans. 149 Tottenham Court Road
Africa has also seen the launch of multiple streaming services, the latest of which is Trace London W1T 7AD
Play. We interview Trace co-founder and CEO Olivier Laouchez about this and his plans for the
Tel: +44 (0) 20 7017 5000
launch of further channels, including a dedicated service for the Democratic Republic of Congo.
Fax: +44 (0) 20 7017 4953
The Middle East has seen multiple SVOD players pitch their offerings to a young and in-
Website: www.digitaltveurope.com
creasingly tech-savvy audience. We assess the strategies of Starz Play, Iflix, Netflix, Icflix and
others and look at the ways in which pay TV operators OSN and beIN Media – itself further
challenged by the regional boycott of Qatar – are responding. Editor Stuart Thomson
Finally, original content is increasingly seen as a differentiator in the Middle East. We report Tel: +44 (0) 20 7017 5314
on how the region’s content creators are now looking to a wider international market. Email: stuart.thomson@knect365.com
Stuart Thomson, Editor Contributing Editor Andy McDonald
stuart.thomson@knect365.com Tel: +44 (0) 20 7017 5293
Email: andrew.mcdonald@knect365.com
Contents Contributor
Rebecca Hawkes
Africa: the big picture 2 Commercial Director Patricia Arescy
Africa’s subscription TV market continues to grow, with competition between regional, local Tel: +44 (0) 20 7017 5320
and emerging digital players. We look at the numbers and likely future developments. Email: patricia.arescy@knect365.com
Kwesé right now 6 Art Director Matthew Humberstone
Andy McDonald talks to Econet Media CEO Joseph Hundah ab0ut his plans for Kwesé TV.
Marketing Manager Marita Eleftheriadou
Trace on track 10
Printing Wyndeham Grange, West Sussex
Stuart Thomson talks to Trace CEO Olivier Laouchez about Trace Play and new channel plans.
The Middle East: the big picture 12
A young tech-savvy population and growing broadband penetration is having an impact on pay To subscribe to this magazine or our
TV and OTT TV in the region. We look at the numbers and the evolution of the industry. daily email newsletter please visit
digitaltveurope.net/registerhere
Lines in the sand 18
Rebecca Hawkes assesses the changing face of pay TV broadcasting and the impact on the
market of new OTT TV services.
ME creators look to wider market 24 © 2017 Informa UK Ltd
All rights reserved
Reproduction without permission is prohibited
Middle East content creators are looking beyond the region. Stuart Thomson reports.
Visit us at www.digitaltveurope.com
1
p01 Ed Note MEA17v3am.indd 1 27/10/2017 17:22
Middle East & Africa 2017 > Africa and its growth prospects Digital TV Europe
November 2017
Africa:
the big picture
Long-delayed Algeria Angola Botswana
implementation of 12000000 350000 80000
digital switchover is 10000000 300000 70000
now underway in a 250000
60000
8000000
number of African 200000
50000
countries, while 6000000
150000
40000
pay TV competition
30000
4000000
10,929,712
2,113,527
100000
20000
314,000
is heating up.
78,000
11,250
73,688
80,000
41,275
2000000
2,500
50000 10000
0 0 0
Cabo Verde Egypt Ethiopia Ghana
20000 15000000 120000 500000
100000
12000000 400000
15000
80000
9000000 300000
10000 60000
6000000 200000
13,269,000*
40000
4,918,918
5000
102,625
406,354
237,237
156,602
45,000*
3000000 100000
52,300
22,064
13,558
18,720
20000
0 0 0 0
Kenya Libya Malawi Mauritania
400000 250000 80000 15000
350000 70000
200000 12000
300000 60000
250000 50000
150000 9000
200000 40000
100000 6000
150000 30000
100000 20000
105,558
382,582
184,491
250,000
50000 3000
63,731
12,262
91,500
1,310
6,050
2,000
50000 10000
0 0 0 0
Visit us at www.digitaltveurope.com
2
p02-03 Africa charts MEA17v2st.indd 2 27/10/2017 17:17
Digital TV Europe Technology focus > Africa and its growth prospects
November 2017
Mauritius Morocco Mozambique Namibia
200000 8000000 150000 100000
7000000
120000 80000
150000 6000000
5000000 90000 60000
100000 4000000
60000 40000
3000000
6,796,950
1,567,808
50000 2000000
146,000
140,823
187,966
30000 20000
41,750
35,500
12,815
69,600
84,750
85,250
74,208
1000000
0 0 0 0
Nigeria Rwanda Senegal Seychelles
6000000 40000 300000 25000
35000
5000000 250000
20000
30000
4000000 200000
25000
15000
3000000 20000 150000
10000
15000
2000000 100000
1,178,125
5,987,500
1,591,968
10000
254,750
5000
12,948
38,215
21,221
20,700
18,000
96,042
1000000 50000
5000
365
0 0 0 0
South Africa Sudan Tanzania Tunisia
8000000 80000 1000000 2500000
7000000 70000
800000 2000000
6000000 60000
5000000 50000
600000 1500000
4000000 40000
30000 400000 1000000
3000000
2,143,145
1,149,065
7,651,468
1,815,506
2000000 20000
181,079
247,261
948,970
79,000
200000 500000
35,750
92,362
3,000
1000000 10000
0 0 0 0
Uganda Zambia Zimbabwe
250000 150000 500000
200000 120000 400000
Key
150000 90000 300000
100000 60000 200000 Cable DTH DTT IPTV Broad-
band
462,720
139,735
235,302
121,408
100000 Notes:
86,500
50000 30000
36,795
* Q2 figures
0 0 0 Source: Ovum/WBIS
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3
p02-03 Africa charts MEA17v2st.indd 3 27/10/2017 17:18
Middle East & Africa 2017 > Africa and its growth prospects Digital TV Europe
November 2017
Africa: the big picture
Accurate data about TV numbers in Africa remains challenging, but the region’s
subscription TV market continues to grow, with more competition between regional,
local and emerging digital players.
Gathering accurate data
about
penetration in Africa is highly challenging.
TV
Smaller players include Zuku, a signficant
pay TV force in the regional East African
market, Starsat, My TV and Azam TV.
overall pay TV market was worth €6.6 billion
at the end of last year and is set to grow to
about €9 billion by the end of 2021.
While satellite operators make a significant Angola’s Zap TV also has a significant base S0uth Africa aside, TV household
investment in counting heads, it is more in its domestic market. Recent entrant Econet penetration remains low in many markets
difficult to make an accurate assessment Media, which operates a pay TV service under across the continent, often hovering in the
about digital-terrestrial numbers – and also the Kwesé brand in several African countries, low-to-mid teens. Digital switchover is in
the still huge number of analogue TV homes. is profiled elsewhere in this publication. general progressing slowly, hampered by lack
Comparing penetration figures for different There are significant concentrations of pay of funds, lack of affordability, and regulatory
TV platforms is therefore extremely difficult. TV homes in Nigeria and South Africa – sub- issues.
The figures presented on the preceding pages Saharan Africa’s biggest economies – with Football rights remain a key driver of
are based on available information and do not these two markets representing about half of pay TV, with platforms focusing on a male
necessearily reflect the reality of the balance all pay TV homes. These two countries also audience primarily. However, the popularity of
between satellite and digital-terrestrial, account for over half of all TV households Nollywood content and telenovelas indicates
for example, in all cases. Pay TV numbers in sub-Saharan Africa, according to Ovum, a recent movement towards creating more
are possibly easier to gauge, but gathering which estimates that there are 13.6 million appeal for a female audience.
accurate statistics is nevertheless challenging. TV homes in South Africa – an exceptionally
According to analyst group Ovum, about high penetration of 81%. Pay TV services are
one third of all households in sub-Saharan taken by almost half of these. Nigeria, on the Digital platforms
Africa – just over 60 million – could be other hand, has an estimated 17.5 million TV
counted as TV homes at the end of 2016, homes, according to Ovum, with about 5.5 Digital platforms meanwhile remain in their
with pay TV homes representing about 40% million pay TV subscribers at the end of 2016. infancy, but SVOD services such as Netflix,
of that total. The vast majority of these pay Despite the presence of satellite as a key along with local players, do exist and are
TV homes took services from trans-national distribution mechanism in many markets, competing for eyeballs.
operators rather than local players, according Ovum expects that digital-terrestrial TV will The high penetration of mobile phones
to Ovum. MultiChoice is the leading operator be the dominant platform going forwards, across the continent continues to present
– accounting for about half of the pay TV with digital switchover completed by the end an attractive target to content providers.
total, followed by StarTimes, which has a base of 2020. The analyst group estimates that According to Digital TV Research, mobile
about two thirds the size of MultiChoice’s. DTT and analogue terrestrial broadcasting distribution will be the overriding factor in the
accounted for 37% of TV homes each at the take up of OTT services. With the number of
end of last year, with pay and free satellite fixed broadband homes only expected to reach
Pay TV subscribers together accounting for 24%. 13 million by 2022, the estimated 486 million
According to Ovum, digital-terrestrial is smartphones users in the region will be the
While Ovum estimates that there were about already the leading pay TV platform in terms key demographic for operators, according to
24.6 million pay TV subscribers at the end of of numbers even if the lion’s share of revenue the research outfit. SVOD is already the main
last year, rival analyst outfit Dataxis estimates still goes to satellite platforms. Dataxis, another revenue driver for OTT TV and video revenues
there were 23.7 million at the end of the research outfit, on the other hand estimates in sub-Saharan Africa, according to Digital TV
second quarter of this year. that DTH currently accounts for 70.8% of pay Research. While revenues were just US$22
The other major player, with a focus on TV homes, with DTT accounting for 24.2%. million, they are set for exponential growth
Francophone Africa, is Canal+, which has StarTimes has benefited significantly from by 2022, when they are predicted to reach
grown its base on the continent in leaps and the boom in DTT, while its satellite sister US$475 million, according to the outfit. In
bounds over the last couple of years, with company continues to lag MultiChoice’s DStv, total, there will be an estimated 10.12 million
growing in Africa regularly highlighted by the according to Ovum, which estimates that the SVOD customers, up from 525,000 at end-
company in its quarterly results presentations, overall pay TV market is worth about US$5 2016, and South Africa will contribute 2.7
compensating for ongoing subscriber losses billion (€4.25 billion). Another analyst group, million of these, followed by Nigeria with 2.64
in metropolitan France. IDATE, on the other hand estimated that the million, says Digital TV Research.
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4
p04 Africa Analysis MEA17v4st.indd 4 27/10/2017 17:20
p05 CSGI DTVE MEA17.indd 1 25/10/2017 14:19
Middle East & Africa 2107 > Kwesé Digital TV Europe
November 2017
Kwesé
right now
Econet Media’s president and CEO, Joseph Hundah, discusses this year’s launch of
Kwesé TV and talks about the company’s ambitious multi-platform expansion plans.
Andy McDonald reports.
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6
p06-08 Kwese MEA17v3st.indd 6 27/10/2017 17:35
Digital TV Europe Middle East & Africa 2017 > Kwesé
November 2017
Launched by Econet Media, a subsidiary Hundah says that while the 2017 launch may
of global telecoms provider Econet Wireless, not have been deliberate, it was nevertheless
Kwesé TV targets both the growing African pay good timing, as a number of sports and content
TV market and Africa’s huge youth audience. rights fell into their renewal phase in 2016
However Kwesé’s route to market has not been and 2017. This allowed Kwesé to snap up free-
entirely smooth, and its first launches came to-air rights to high-profile sports like English
more than a year Econet Wireless owner, Stive Premiere League football, NBA basketball and
Masiyiwa, announced plans for a sub-Saharan NFL American football and launch the fully free-
TV service that would offer a range of sports to-air sports channel, Kwesé Free Sports. This
and entertainment, including to mobile users. started broadcasting last year and preceded all of
Kwesé’s pay TV rollouts. As a result, sport has
become key to establishing the Kwesé brand.
Building credibility Kwesé Free Sports now broadcasts in
some 10 countries across Africa and it has
Econet Media president and CEO Joseph affiliations in another 20, meaning it provides
Hundah explains that the journey the company programming blocks to partner channels.
went on for the launch of Kwesé TV started “Our intention was to become the biggest free-
“almost three years ago” and admits that 2017 to-air channel in Africa, and we’ve achieved it,”
has been “a difficult year for many reasons”. says Hundah, claiming that the channel rules
While the timing of Kwesé’s rollout “couldn’t the African free-to-air space in terms of both
have been better”, it was not necessarily viewership and geographical reach.
deliberate, says Hundah. “As you know it really Hundah explains that the channel has
takes a long time to get the right people in place, served a tactical purpose by introducing the
the right amount of content, [and] building up Kwesé brand to a much wider audience than
some credibility in the market,” he says. the pay TV subscriber base it is now targeting.
Kwesé TV initially launched at the start of this “The brand is out there and people understand
year in a handful of smaller African markets and associate Kwesé with quality,” he says.
such as Rwanda, Lesotho, Zambia, and Ghana. “As we are launching our pay TV business,
However, its full launch plans had to be revised we are finding that the penetration of the
after the company entered into a strategic market is much easier, because the brand is
transaction that “didn’t work out”. Though already well known in the market. I think from
Hundah won’t go into details, he says that this that perspective we have achieved what we
episode caused delays that put its subsequent wanted to achieve with our Kwesé Free Sports
launches back by about six months. platform.”
Fast-forward to the latter part of September Outside of sports, Kwesé TV’s content
and Kwesé started to go live in more markets, line-up has focused on a relatively slim
including some of its biggest territories. offering of channels, compared to the
Services in Kenya, Zimbabwe, Nigeria, hundreds of networks offered by many its
Botswana and Uganda are all now live and by pay TV counterparts in western Europe or
the end of November Hundah estimates that North America. Hundah says that by the
Kwesé TV will be available in about 15 markets end of November, Kwesé will offer roughly
across the continent. 75 channels, of which around 30% will be
At the time of this interview, the only exclusive. With the launch of two new family-
This year has seen the
introduction of a
major new player to the African pay TV space.
holdouts were Tanzania and Ethiopia. Tanzania
is the only market Econet Media is yet to secure
a licence – though Hundah is confident it has
oriented channels it will also have over 10
branded channels covering movies, kids
content, lifestyle programming and more.
Kwesé TV started to roll out its direct-to-home met all the necessary criteria – while Ethiopia, “As you know, in pay TV, the more exclusive
(DTH) satellite offering in January, taking on he says, is “quite a difficult market to enter in channels you have, the more traction you are
incumbent MultiChoice with a flexible TV general”. likely to have in terms of acquiring subscribers,”
package aimed at middle and upper middle “For us, it has really been almost a whole year says Hundah. “We’re happy with the balance
class customers. we’ve spent refining and testing our business, of our bouquet. It’s not large – deliberately so.
Kwesé lets viewers opt for three-day, seven- based on the markets in which we were in,” We’re quite comfortable with our 75 [channels],
day or monthly pay TV packages and its DTH says Hundah. “But I believe that we’ve now and we believe that we are better off with
service complements both free-to-air sports, entered into the markets that we will see real more quality than having quantity. That’s
and over-the-top and mobile offerings, the growth. This is the high-population markets what we planned for, from a channels-spread
latter of which is still being developed. with good penetration of TV households.” perspective.”
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7
p06-08 Kwese MEA17v3st.indd 7 27/10/2017 17:35
Middle East & Africa 2107 > Kwesé Digital TV Europe
November 2017
Kwesé TV’s content line-up includes Turner Kwesé TV launched its DTH pay TV offering
channels like CNN International, Cartoon in a number of African markets in January.
Network and Toonami; Scripps Networks
Interactive networks like Travel Channel and the local entertainment plans. “Sometimes you
Fine Living; Trace-branded channels like Trace have to start something and learn your lesson
Africa and Trace Gospel; two Zee Entertainment before you perfect it. We certainly are taking it
Enterprises channels adapted for the African easy initially, because we want to get it perfected
market, Zee Bollymovies and Zee Bollynova; with the local productions unit and how they
and a version of the AMC Channel. It offers a operate. Then from there we will proceed to
host of news channels including BBC World rapidly expand.”
News, Sky News, Africanews, France 24, Al us to compete with them. However, what we
Jazeera and Bloomberg. On the kids front it has decided to do was to partner with them.”
Boomerang, CBeebies and Jim Jam. It is also the Multi-platform focus Hundah believes “there’s a good future for
exclusive African home to Revolt TV – the US this part of the business”. Expanding with the
multi-platform TV network owned by US rapper, Kwesé is a pay TV operator that is taking various help of ISP partners will help Kwesé Play to gain
producer and businessman Sean ‘Diddy’ Combs. routes to market. Kwesé Play is its over-the-top traction, especially with the price of connectivity
Vice Media announced in January that its streaming service primarily aimed at a high- in Africa “dropping quite significantly on an
Viceland channel would launch exclusively in end demographic – owing to the fact it relies on annual basis” as LTE and cable rollouts continue.
Africa with Kwesé TV and at MIPCOM this year users having uncapped broadband connections. Kwesé also has a mobile plan in the offing.
the two companies expanded their partnership Currently available in South Africa, Hundah This will be based around a mobile-specific app,
by launching Kwesé Vice. This joint venture will says the service should be available in some 10 targeted at the youth market. Econet already
focus on developing, producing and distributing markets by the end of the year and that the next has a wide footprint across the continent and
local content and original video programming – phase of its growth will involve partnering with Hundah says that Kwesé has signed deals with
both for Kwesé Vice’s channels and third party the major African internet service providers. other major mobile operators working in Africa
platforms. The venture is due to launch in 2018 Hundah says that allowing them to offer Kwesé – including Vodacom, Vodafone, MTN and Tigo
and will involve the establishment of a new Play to their broadband subscribers will help – to supply them with content.
bureau and production studio in Johannesburg, create “stickiness and traction”. “We are still refining the mobile strategy, but
South Africa. Kwesé Play is available with the backing of we intend to launch the mobile product, probably
From its own branded channel stable, some high profile partners. The Kwesé Play by the middle of November if everything goes
Kwesé’s line-up includes Kwesé Info, Kwesé box is provided and powered by Roku, as part well,” says Hundah. “In essence the idea is to
Prime, Kwesé Stories, Kwesé Know, Kwesé of a ‘Roku Powered’ deal between Econet give this content to our mobile network operator
Kids, three Kwesé Movies channels, and two Media and the streaming platform provider. partners for them to exploit, because obviously
Kwesé sports channels on top of its free sports “The reason why we partnered with Roku was they’re looking at ways to increase data usage
offering. For these, it has active plans to make its because they have most of the online streaming and we are looking for ways to target a market
own original productions. “I’m fully of the belief services already integrated into their box,” says that we think might never own a satellite TV
that without local content, competition is going Hundah, claiming this made it “so much easier subscription.”
to be difficult,” says Hundah. “We’ve already to launch”. According to UN data, Africa has the youngest
commissioned about eight shows that will go While Roku supports more than 2,500 population in the world, with the median age
into our owned content portfolio, and we’ve tried streaming services, Hundah explains that for just 19.7 years old. Hundah says that Kwesé’s
to cover all genres.” Kwesé Play it decided to launch with a curated aim is to reach this mobile-centric audience
“We’ve done two dramas, we’ve got some line-up of roughly 100 channels – with the with short-form, mobile-optimised content –
lifestyle shows, some entrepreneurship shows. notable inclusion of Netflix as an ‘anchor tenant’ including sports highlights. He says Kwesé is
Our next step is probably to do something with on the platform. “It has taken us two years, but “working aggressively towards” realising these
shiny-floor [studio entertainment] formats. But eventually we’ve signed a distribution deal with plans.
local content is absolutely key in Africa and our Netflix for the African continent,” says Hundah. Hundah concedes that competing against
strategy has to include how we develop that part “We’re still very much in our infancy, but the MultiChoice, which has had more than a 20-
of our business quite quickly.” plan is obviously to add more services on the pay year head start in the African market, will be
For the free-to-air Kwesé Free Sports channel, side of the platform.” tough. But he believes Kwesé has built a strong
Hundah says that the plan is to completely The Kwesé Play line-up includes services like product and has made strong progress in a short
customise by country so that it has local content TED, Red Bull TV and YouTube and was based space of time. By targeting an affluent audience
in markets such as Kenya, Botswana and around the idea that Kwesé should not launch of young Africans aged 15-39, Kwesé is carving
Zambia. On the general entertainment front its own VOD offering for the platform. “I think out a compelling proposition.
it will take a different approach, focusing on if Netflix do what they do in terms of creating “We are cognisant of the fact that the
creating local shows for larger markets first. local content, they will win the space along with population is a young population,” says
“Our intent is not to go local in every single Amazon and there could be one or two more,” Hundah. “We’re trying to build a product for the
market – it’s just not viable,” says Hundah of says Hundah. “It didn’t make strategic sense for future.”
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8
p06-08 Kwese MEA17v3st.indd 8 27/10/2017 17:35Q&A: Steeve Huin, Irdeto
Steeve Huin, vice-president of strategic partnerships, Irdeto, talks about the rise of OTT, new methods of pay TV content delivery and the
challenges and opportunities for pay TV operators.
How significant overall is the evolution of OTT TV technology for This has led to increasing collaboration or strategic coexistence,
mainstream pay TV operators and do you expect them to adopt OTT rather than competition, between traditional pay TV operators and OTT
as their principal way to reach subscribers? players. Many operators today are looking for ways to collaborate with
The growth in demand for OTT services shows no signs of abating, such services as Netflix, or even non-traditional TV platforms.
with predictions suggesting that global OTT revenues will reach US$65
billion by 2021. This is largely being driven by the increasing uptake and What do operators need to think about in building a hybrid platform
global expansion of services like Netflix, which launched in the Middle that combines mainstream pay TV services with OTT offerings and
East and Africa last year. However, mainstream pay TV operators are also delivery of services to multiple screens?
getting involved in OTT as they see consumer attitudes changing. The common approach to achieve this collaboration is for operators to
As demand continues to grow in the Middle East and Africa, there are offer a hybrid set-top box (STB) with linear TV and OTT services – be it
three trends which are set to continue: consumers want OTT services their own or from partners. This way the operator controls the HDMI 1
on devices of their choosing, they continually expect more value for and gets consumers to pay attention to their content instead of the OTT
their money, and, they want customised experiences. While traditional apps on the smart TV.
methods of pay TV delivery will maintain their importance in the region An option for operators that want to launch a hybrid set top box
for many years to come, operators know that these trends cannot be quickly, with low development and operational costs, is Android TV. By
ignored. leveraging the built-in features of Android TV, operators can add their
broadcast service in six to nine months, or shorter if they leverage a pre-
What are the principal challenges faced by operators in securely integrated solution from a security partner. Android TV also brings an
delivering content to managed and unmanaged devices without exciting app ecosystem that consumers have come to expect.
duplicating costs and effort?
Operators now face the challenge of the higher security demands of What are some of the newer methods of delivery of pay TV content
new technologies like 4K UHD, combined with the undeniable consumer aside from set-top boxes?
shift towards viewing on unmanaged, connected devices. MovieLabs’ The Global Pay TV Revenue Forecasts report from Digital TV Research
Enhanced Content Protection (ECP) requirements around premium estimates that pay TV revenues sub-Saharan Africa will surge by 57%
content are upping the ante for delivery to unmanaged devices. Many of between 2016 and 2022.
these requirements we’ve come to expect in managed devices, but they Despite this continuing high demand, pay TV operators must still
have also raised the bar for OTT services to unmanaged devices, meaning look to capitalise on new methods of secure delivery of their broadcast
they must have similar security levels to the STB. Defining a solid hybrid content, to serve consumer convenience and make the sign-on process
strategy that meets both security requirements and business needs is easier and cheaper. Irdeto’s partnership with home and professional
therefore critical to ensuring cost and effort is not duplicated. appliance manufacturer, Vestel offers pre-integrated pay TV security
capabilities within a TV. This means that consumers can now have the
What are the challenges in opening up traditional pay TV platforms best of both worlds – instant access to their favourite pay TV service,
through partnerships with OTT TV providers such as Netflix and what on the big screen without extra equipment. For operators this has the
technology requirements are associated with this? potential to make subscriber acquisition easier, by providing consumers
A recent report from IDATE predicted that the number of pay TV with frictionless instant-access pay TV services on a new TV that they
subscribers will almost double in the next five years in the Middle East purchase.
and Africa. This, combined with the growth in OTT, signals a clear demand In addition, Irdeto recently announced a partnership to offer a
for quality content through both broadcast and OTT. Therefore, the CI plus 2.0 USB CAM – another cost-effective way for operators to
main challenge for operators is to navigate this converging ecosystem provide consumers access to pay TV without a set-top box. This will
and ensure that consumers can receive premium content securely, and enable operators all around the world to leverage a trusted and proven
with the best possible user experience, however it is delivered. standard-based technology that was until now mostly limited to Europe.
p09 Irdeto Q&A DTVE MEA17.indd 1 27/10/2017 10:11Middle East & Africa 2107 > Trace Digital TV Europe
November 2017
Trace
on track
With the recent launch of streaming service Trace Play and the forthcoming launch of
an MVNO and new channels, urban music and culture specialist Trace is in the midst
of a period of frenetic activity. Co-founder, chairman and CEO Olivier Laouchez took
time out at MIPCOM to talk to Stuart Thomson about his plans.
Afro -urban music and entertainment
provider Trace is in the midst of a
period of heightened activity. The urban culture-
commercially in November, with a focus on
Africa, France, the UK and the US as its core
target markets. Currently the service has “a few
“broader choice than you can find on any one
operator”, where typically Trace will distribute
three or four channels as opposed to the
themed content provider recently launched thousand” subscribers, each paying €2.99, or complete line-up available on the player.
streaming service Trace Play – its biggest digital the dollar, sterling or local currency equivalent. “In many countries we think we will have
move to date – and is also forging ahead with In Africa in particular, Trace has focused a dual audience – of people just interested in
the launch of new regional channels and a on bundling Trace Play with mobile services, urban music alongside the different diaspora
mobile virtual network operator. especially deals that include a zero rating audiences who can find content on Trace Play
Trace Play is now available on multiple for data used to view the service. Laouchez that the they can’t find anywhere else,” he says.
platforms across some 200 territories, using a says that Trace is likely to close “six or seven” While the distribution mechanisms for
platform built by Trace’s technology partner for significant distribution deals before the end Trace content are many and various, Laouchez
the project, Simplestream. “This has been the of the year, including a deal already concluded is adamant that the key to success for Trace
most complicated project we have ever done, with Orange. The service is also available on Play will be a clear focus on its core proposition
I must confess. The technological dimension streaming devices including Roku, Apple TV – urban culture and music. “We put all our
has been complex,” says Olivier Laouchez, and Amazon Fire TV as part of the Amazon content budget into reinforcing our music
co-founder, chairman and CEO of Trace, Prime line-up. offering. We also do live concerts. We are
speaking to Digital TV Europe on the Trace Laouchez says that Trace Play use has been producing some musical content. We don’t buy
yacht at MIPCOM. “We learned a lot during concentrated on music and, primarily, on any content from American studios, because
the journey. It was more complicated than linear consumption. He says that “90% of we don’t think we can make the difference
we expected, especially because of multiple usage is somehow music-related” and that there,” he says. Recent scripted shows on the
territories, language rights, platforms, type of linear TV accounts for 65-70% of usage, with platform include Nigerian productions Wives
content and so on.” radio accounting for 20% and on-demand on Strike and Crazy, Lovely, Cool. Trace has also
Laouchez says that Modern Times Group- consumption the balance. put money into UK-produced comedy show
owned Trace will begin to market the service He says that Trace Play will give users a Brothers with no Game.
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10
p10-11 Trace MEA17v4st.indd 10 27/10/2017 17:24Digital TV Europe Middle East & Africa 2017 > Trace
November 2017
Live content will remain central to the “We are seeing the emergence of new talent
proposition, however. Laouchez points to the New channels from the Indian Ocean…and there is not one
fact that Trace is not only a broadcaster but an professional channel that covers all this music
organiser of more than 200 major live events Regionalisation of content meanwhile remains and culture,” says Laouchez.
this year alone. The company has a partnership a top priority for the company. Trace recently Regionalisation of its offering has long
with the Afropunk series of events and is launched Trace Prime, its new channel for the been key to Trace’s strategy where “it makes
also organising a Trace Roots event in South US. Laouchez is hopeful of striking a carriage economic and also cultural sense”, he says.
Africa on November 4, while in Côte d’Ivoire deal for the service, which will also be available “You attract more advertising and investment
it has teamed up with mobile operator MTN on OTT TV, soon. because you are more relevant for the region.”
to sponsor a live festival in December. He Laouchez says that the company is looking Trace’s biggest current localisation project
says that Trace is creating a dedicated section to create more programming blocks featuring is, however, a new channel that spotlights the
of Trace Play for live events in order to stream underground artists in order to differentiate it culture and music of Africa’s biggest country,
coverage of them. from more mainstream music offerings. In the Democratic Republic of Congo (DRC).
Finally, says Laouchez, Trace is working on France, Trace plans to launch a Trace Hip-Hop Trace Kitoko, which is set to launch at the end
a plan – still at an early stage – to potentially block on its flagship Trace Urban channel that of this year or the beginning of 2018, will be
launch a Portuguese version of Trace Play, with will air for up to six hours during the night “so versioned in the Ngala language that is spoken
expansion into the Brazilian market in mind. we can connect with this more edgy and picky both in the DRC and neighbouring Congo-
Trace Play is not the only new major initiative audience”. Brazzaville. The primary target market for the
from the company this year. Trace also has Trace also plans to launch a new channel channel is the 90 million-strong population of
plans to launch its own MVNO in South Africa targeting the Indian Ocean. Within the Trace the DRC, together with the five-to-six million of
as well as plans for the launch of new regional portfolio, the region’s musical currents have Congo-Brazzaville and a global diaspora of up
channels. hitherto been served by its Trace Tropical to 10 million – over 100 million in total.
Plans for the MVNO are already at an offering, which is primarily targeted at the “The DRC is the biggest French-speaking
advanced stage. Trace Mobile will launch in Caribbean market, despite the fact that the two country in the world,” says Laouchez. “Because
November on the Cell C network, building regions have distinctive musical cultures. of the civil war most international journalists
on an existing branded mobile resale The new channel, Trace Vanilla, will launch don’t go there [but] the reality – and I was in
offering. MVNO-enabler MVN-X is providing at the end of this year or the beginning of next, Kinshasa a few weeks ago and saw this – is
technology. Trace Play will be an integral part says Laouchez. that this is a country where everybody is not
of the MVNO offering. While the online just passionate but crazy about music. The big
service will be available to all Cell C customers, artists there are superstars.”
Laouchez says that “there will be a benefit” for However, Trace Kitoko is likely to have a
customers that access it through Trace Mobile. broader appeal, given the popularity of artists of
Laouchez says that Trace is hopeful of being Congolese origin in France. “Half of the biggest
able to launch Trace Mobile in other parts of hip-hop artists in France are from the DRC.”
Africa in the near future, with a target of “five Trace already took a step to enhance its
or six” markets to see launches next year. He presence in the DRC in August, striking a deal
adds, however, that the MVNO concept is with mobile player Africell to carry Trace Play
still relatively new for Africa’s major mobile and for Trace to acquire radio station AfriRadio.
operators, so it will take time for them to “see Laouchez says that Trace Kitoko will be
how it works”. For Laouchez, a Trace-branded distributed in the DRC via partners but will
telecom service is just one part of his overall be available globally via Trace Play. He says
mobile strategy. Bringing content and exclusive one of Trace’s missions is to bring different
experiences drawing on Trace’s media musical cultures together via its channels and
and event activities is what will ultimately digital platform. Localised channels typically
differentiate the MVNO offering, he says. comprise 70-80% local content supplemented
Trace is also making moves to extract greater by material from other parts of the globe.
value from its content IP and reach in the Laouchez is also mulling the launch of a new
African market, launching a new distribution international channel “taking the best from
arm – Trace Content Distribution – headed each region” in which it operates. He hopes
by former France Télévisions and Lagardère this global hits offering will be ready in time for
Studios executive Betty Sulty-Johnson. “It is Trace’s 15th birthday next year.
expensive to produce content so you need “We want Trace to be a bridge between all
multiple distribution partners,” says Laouchez. countries with a strong urban identify and
populations of African descent because this is
Trace Play streams Trace’s portfolio of linear what unites all the countries where we are have
channels and on-demand content. a strong presence,” he says.
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11
p10-11 Trace MEA17v4st.indd 11 27/10/2017 17:24Middle East & Africa 2017 > The Middle East and its growth prospects Digital TV Europe
November 2017
Middle East:
the big picture
Satellite remains the primary TV Bahrain
distribution technology in the Middle East, 250000
with free-to-air viewing still predominant,
but growing broadband penetration is
200000
providing an opportunity for new OTT 150000
TV players as well as existing pay TV 100000
providers. 243,399
50000
68,625
5,000
4,375
0
Iran Iraq
8000000 5000000
7000000
4000000
6000000
5000000
3000000
4000000
2000000
3000000
4,555,240
6,715,023
2000000
170,175
740,000
260,000
1000000
1000000
0 0
Jordan Kuwait
1200000 200000
1000000
150000
800000
600000 100000
400000
1,054,468
50000
173,000
160,348
358,479
200000
1550
0 0
Visit us at www.digitaltveurope.com
12
p12-13 ME charts MEA17v2st.indd 12 27/10/2017 17:15Digital TV Europe Middle East & Africa 2017 > The Middle East and its growth prospects
November 2017
Lebanon Oman
350000
1500000
300000
1200000
250000
900000 200000
150000
600000
1,386,500*
100000
343,449
288,550
59,375
300000
3,500
6,000
3,250
50000
0 0
Qatar Saudi Arabia
350000 4000000
300000 3500000
3000000
250000
2500000
200000
2000000
150000
1500000
100000
1,209,000
3,542,500
1000000
332,438
260,000
49,875
67,625
99,625
50000 500000
0 0
Syria UAE
800000
1500000
700000
1200000
600000
500000
900000
400000
300000 600000
1,330,500
200000
758,338
275,000
113,000
475,875
300000
100000
0 0
Yemen
2000000
1500000
Key
1000000
Cable DTH DTT IPTV Broadband
1,620,200
500000
174,000
Notes:
* Q2 figures
0 Source: Ovum/WBIS
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13
p12-13 ME charts MEA17v2st.indd 13 27/10/2017 17:15p14 TiVo DTVE MEA17.indd 1 25/10/2017 14:22
Q&A: Charles Dawes, TiVo
Charles Dawes, senior director, international marketing at TiVo, talks about the emerging need for sophisticated content discovery in the
African market.
TiVo is a well-known brand around the world but hasn’t operated in What solutions does TiVo provide that you think would be particularly
Africa until now. Tell us more about your plans. relevant for the African market?
Yes, TiVo is an extremely well-known brand in the media and TiVo has been active in the market with its discovery products for
entertainment space having launched the first commercially viable many years and this is an area where it can bring a robust offering to its
Digital Video Recorder (DVR) in 1999. The word ‘TiVo’ became customers to help them grow their pay TV businesses across multiple
synonymous with recording TV. Since then, the company has continued levels of consumer.
to innovate and stay at the forefront of helping consumers discover and From basic DTT (digital terrestrial television) services, to DTH (direct
consume their favourite entertainment content. In fact, just this month, to home) services with Push VOD (video on demand), to fully hybrid
it launched its new TiVo VOX product range in North America that solutions with integrated OTT (over-the-top) services like Netflix, TiVo
combines its latest TiVo Experience 4 user interface with its class-leading has the right level of product to help operators grow their presence in
conversational voice-led discovery services. their market. TiVo has a wealth of experience when it comes to deploying
TiVo has, in fact, been operating in the Africa market for many years both single market and complex multi-country products that meet the
under the Cubiware brand. However, in 2016, the company consolidated needs of operators in the region.
all of its brands into the new TiVo to give a clear, consistent message to
its customers, as it helps them to deploy the ultimate entertainment To what extent do you think content discovery in general will undergo
experience; something that it will be bringing to the African market in a major shift over the next couple of years and what technological
due course. innovations will have the greatest impact?
Content discovery continues to evolve as we see more and more
Many of the emerging digital services in the African market are entertainment choices for the consumer. Around the world access
looking at the mobile video opportunity. To what extent does content to content from OTT providers like Netflix has meant that consumers
navigation and discovery on mobile devices differ from TV? can face overwhelming choice. Recent TiVo surveys have revealed
You’re right, the market dynamics across Africa means many of the how over one third of consumers have stopped watching shows they
emerging services are aimed at the mobile sector. In the content love because it became too difficult to find them (1), as well as how
discovery space, the foremost difference is the screen real estate that is consumers still spend an average of 19 minutes a day looking for
available on a mobile device; this means you have to be smarter with content (1), with over 50% of them sometimes getting frustrated with
how you display content to the customer. With smaller screens, knowing their experience (2).
your customer becomes more important, along with having the ability Technological innovations including the next generation of
to implement newer technologies such as content predictions and recommendation and accurate predictions that TiVo is already
recommendations. Additionally, voice-based input can help overcome delivering, along with new input methods like Conversational Voice will
some of the form factor limitations that exist. mean an improved experience that will lead to more satisfied consumers
TiVo’s product set is already mobile ready and can be deployed either enjoying the content they love.
as a stand-alone service or in conjunction with a more traditional,
set-top box based deployment to deliver a more advanced set of (1)
2016 TiVo Consumer Survey: http://bit.ly/2ySir2C
integrated services. (2)
Q2-2017 TiVo Quarterly Survey: http://bit.ly/2xp6Bd0
p15 TiVo Q&A MEA17.indd 1 26/10/2017 16:28Middle East & Africa 2017 > The Middle East and its growth prospects Digital TV Europe
November 2017
MENA: the big picture
Free-to-air TV has long dominated distribution in the Middle East, and pay TV services
have struggled to gain traction outside a few affluent pockets. But analysts predict
that a young tech-savvy population and growing broadband penetration will give a
fillip to SVOD services, albeit from a small base.
The dominance of free-to-air satellite
as the primary video distribution
technology has been a constant theme in
number of Middle East telcos have launched
IPTV services, notably in the Gulf. However,
IPTV penetration overall remains low – held
double from the 5.4 million it estimates for
the end of last year to about 10.4 million by
2022. It also expects Netflix to be the market
coverage of the industry of the Middle East and back by the perception that it is costly, by a leader with 3.9 million subscribers by 2022.
North Africa for years. However, broadband lack of fixed broadband infrastructure and Pay TV penetration, by comparison, is
penetration – and, more specifically, mobile by a general unwillingness to pay for content expected by Ovum to rise only by about 11%
broadband – is growing fast in many of the in a region where a large number of free-to- over the next five years, more or less in line
countries across the Middle East. As a result, air channels are available and piracy is rife. with the growth in TV households generally.
online and mobile video consumption is also Kuwait-based Zain, which does not offer fixed Digital TV Research, meanwhile, predicts a
increasing, which has helped fuel the launch services in its home market, has meanwhile more bullish 17.27 million SVOD customers
of multiple OTT TV services over the past teamed up with Malaysia-based SVOD service across the MENA region by 2022, up from an
couple of years. Iflix to tap into potential demand for OTT TV estimated 3.74 million at the end of last year.
However, a note of caution is necessary. offerings. Iflix’s new regional service features Digital TV Research also expects Netflix to be
There is in fact still a long way to go before Arabic and English-language TV shows the biggest single player, with 3.26 million
the region becomes a broadband powerhouse. and movies, and the company has made paying subscribers by 2022. The research
A recent report by Ovum highlighted the fact a commitment to produce its own Arabic outfit predicts that Icflix will have two million
that, while investment in broadband in the content. subscribers and Starz play a further 1.6
UAE and Qatar put both countries in its global Iflix’s entry into the region followed that of million.
top 10 in terms of their level of development, Middle East SVOD pioneer Starz Play Arabia,
overall the Middle East excluding North Africa which forged partnerships with Qatar’s
only ranked fifth out of eight world regions Ooredoo and other distributors, and of course SVOD base
measured in the analyst group’s Broadband Netflix, which has so far had a limited impact
Development Index. in the region in the view of most analysts. Both Ovum and Digital TV Research include
Nevertheless, says Ovum, the Middle East as The general preference for free content Turkey in their overall figures for the Middle
a whole has a young-skewing and increasingly notwithstanding, broadcasters in the region East, which skews the results considerably,
tech-savvy population that is enthusiastic have begun to invest in premium digital however. IHS Markit, by contrast, estimates
about consuming content on mobile devices. services. The region’s prime free-to-air pan- that SVOD services will only reach 1.3 million
The analyst group cites Google’s revelation Arab broadcaster, MBC, has invested in digital subscribers for the MENA region by the end
that Saudi Arabia has the highest use of service Shahid, including a premium option of 2017, with Netflix and Amazon together
YouTube per person in the world. featuring shows without commercial breaks accounting for just one fifth of the total, but
Ovum estimates that mobile broadband and some premiered content. Leading pay predicts that the overall SVOD base will grow
will account for 90% of mobile subscriptions TV provider OSN has meanwhile launched to 4.2 million by 2021.
in the region, excluding North Africa, by OSN Play and Go, a multiscreen OTT TV For IHS, low income levels in much of the
2022, while fixed broadband penetration will service that is also available to non-OSN region outside the Gulf, together with low
grow relatively slowly, penetrating just over subscribers. In August it also launched Wavo, bank-card penetration, are likely to hinder
half of homes in the Middle East in the same a new streaming service with a mix of live the development of SVOD beyond a relatively
time frame. and catch-up TV, movies series and a western small elite, even if its predicted compound
and Arabic content targeted at young, mobile- annual growth rate of 35% for such services
centric consumers. seems impressive. IHS expects that
OTT TV service providers While numerous digital services are international players with strong localisation
therefore now available, forecasts about the strategies such as Starz Play Arabia, Iflix and
These trends account for the rapid growth in growth of OTT TV services vary widely. Viu, and homegrown offerings such as Icflix,
interest in the region from OTT TV service Ovum predicts that SVOD subscriptions in Seevii, Wavo and Shahid Plus will contribute
providers, including Iflix, Starz and Netflix. A the Middle East, excluding North Africa, will significantly to growth.
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16
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p17 Magine_Wisi DTVE MEA17.indd 1 25/10/2017 14:24Middle East & Africa 2107 > Focus on MENA Digital TV Europe
November 2017
Rebecca Hawkes assesses the changing face of pay TV broadcasting in the MENA
region at a time of transition as new OTT TV services enter the fray and political crises
disrupt the market.
Lines in the sand
Pay-TV operators in the Arabic-
speaking world have
long aimed to transcend both the dominance
2017, Asian subscription video-on-demand
service Iflix, backed by western pay-TV giants
Liberty Global and Sky, entered the fray – in
Gaining ground
of free-to-air TV and the blight of content partnership with Bahrain-based telco Zain. Lionsgate-backed Starz Play Arabia, which
piracy. Now, being liberally added to the By the end of this year, research analysts at launched its Hollywood-rich SVOD service in
competitive mix is a dose of digital disruption. IHS Markit forecast that MENA’s OTT video April 2015, announced in July it had attracted
New sources of online entertainment players will have a combined total of 1.33 million 700,000 paying subscribers – in large part
are being lapped up by the growing digital- subscriptions, with the sector accounting for through localising its offering and teaming
savvy, youthful population of an increasingly US$80 million (€68 million) in revenues. up with local telecommunications companies
internet-connected Middle East and North Yet, by the end of 2021, these figures will for mobile and IPTV distribution and direct
Africa. In the space of just a few years, the have escalated to 4.2 million subscribers and billing. In addition, it has priced its services
region’s video-on-demand market has gone standalone revenues of US$360 million. according to the market, at US$7.99 in the
from sparse to distinctly crowded. Indeed, the compound annual growth rate Gulf, and US$4.99 in Maghreb countries
The first regional over-the-top video players for MENA’s OTT sector will be 35% between such as Morocco.
such as Icflix, Istikana and Starz Play Arabia 2016 and 2021, says IHS. The CAGR for the Starz Play’s CEO, Maaz Sheikh says the
were joined, in 2016, by US giants Netflix regional pay TV sector during the same period MENA-wide platform is now aiming to
and Amazon Prime Video. Then, in April is forecast to be just 6%. finish the year with over a million paying
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18
p18-22 ME Feature MEA17v4st.indd 18 27/10/2017 17:25Digital TV Europe Middle East & Africa 2017 > Focus on MENA
November 2017
subscribers. “We are holding the leadership in Algeria where the launch of Starz Play with great stories to tell from all over the
position in the market now and are on course bundled with Ooredoo Algeria has proved world, including the Middle East”.
for this but it’s still a challenging, competitive “very successful”. The platform is now Adding locally produced content to
market,” he says. “We have areas that are offering 2,500 hours of Hollywood content in predominantly western fare is a desire shared
performing better than expected at this point French, with prime content such as the latest by Starz Play Arabia, which hopes to enter
[of service development] such as the number
of paid subscriptions, consumption and user
engagement. However churn is higher than
“We are holding the leadership position in
predicted, which is challenging.”
Half of Starz Play’s UAE subscriber base the market now and are on course...but it’s
also subscribes to Netflix, says Sheikh. “In still a challenging, competitive market.”
the UAE Netflix’s premium western content
is relevant to the large western expatriate
population. However, when you go into North Maaz Sheikh, Starz Play
Africa, Netflix’s proposition is not so relevant
to the local population,” he says. In North Walking Dead shows airing on the same day the local production market in 2018 with a
Africa Netflix is also priced more expensively as the US with French subtitles for Maghreb strong Arabic drama series – both to attract
than its competition, with its region-wide viewers. subscribers and bring down the operator’s
tiered price tag of between US$7.99 and Diversifying its content further, Starz Play churn rate.
US$11.99. has also recently tied-up with YuppFlix to One regional SVOD operator with a
Constantinos Papavassilopoulos, senior provide subscribers with 1,500 hours of South head start on local co-productions is Icflix,
analyst at IHS Markit, agrees that while the Asian movies. Subtitled in Arabic, the films whose Moroccan film Burn Out, directed
US streaming giant remains a threat to the are proving popular with both the large Indian by Noureddine Lakhmari, celebrated its
regional players, Netflix is not the leading diaspora and Arab audiences. “Our Bollywood theatrical release on October 11 2017.
SVOD service across the whole of MENA. consumption is, as expected, highest in the CEO Carlos Tibi says that Arabic content
Netflix itself does not publish regional Gulf but it is also performing well in North has been the “key differentiator” for Icflix,
subscription figures. Africa,” says Sheikh. over the past 18 months: “We [also] co-
“The price is high for most of the population Netflix, meanwhile, recently unveiled what produced our first Tunisian feature Chbabek
living outside the Gulf, and the service is not is expected to be the start of its original Arabic El-Jenna (Borders of Heaven) and launched our
yet localised, which is also hampering its content push. In October, it announced first animated TV series Dunia, introducing
growth,” explains Papavassilopoulos. “It also development of a stand-up comedy special the first Arabian teen female superhero.”
doesn’t have many direct billing agreements with Lebanese comedian and actor Adel In addition, Icflix has produced the original
with local mobile telecommunications Karam. Produced by Creative Arab Talent and Arabic social comedy WOH! in Tunisia.
operators, like its competitors, and credit card filmed in Beirut’s Casino du Liban, the show Since the Dubai-based MENA-wide SVOD
penetration is low in MENA.” will stream to Netflix subscribers worldwide service launched in 2013, it has registered 1.5
Indeed, rival platforms Icflix, Starz Play in 2018. million users, says Tibi, to a service priced –
and MBC’s paid streaming service Shahid Given its stated aim ‘to become a leading
Plus have been very effective in this area, producer of quality localised content from all
securing more than 40 deals between them over the world’, similar announcements from
with regional telcos. Netflix currently has Netflix are expected to follow. Netflix’s director
an arrangement with Batelco in Bahrain, of technology and corporate communications
and Amazon is yet to announce any local EMEA, Yann Lafargue, says that “one of our
partnerships. desires in the region is to find a great scripted
series for the Middle East and this remains
the case”.
Shining Stars “With a US$6 billion budget for content
production alone this year and US$7 billion
Starz Play is hoping to maximise its early- for next year we are actively seeking to expand
mover advantage, particularly in North Africa. our Netflix audience base both in MENA and
For example, a recently announced strategic around the world through varied content
partnership with Orange Egypt will see Starz offerings,” he says.
Play now bundled with the mobile operator’s Lafargue adds that in order to do so the
4G service, in what remains a lucrative market company would look to “experienced creators
for content providers.
CEO Sheikh also points to a growing Content like Moroccan film Burn Out has
subscriber base in Jordan, Morocco, and given Icflix a head-start in local production.
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19
p18-22 ME Feature MEA17v4st.indd 19 27/10/2017 17:25You can also read
