TV Middle East and Africa MIPTV 2013

MIPTVEDITION

Sub-Saharan Africa

OSN’s David Butorac

www.tvmea.ws THE MAGAZINE OF MIDDLE EASTERN & AFRICAN TV APRIL 2013

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In This Issue

Africa RisingSub-Saharan Africa’smedia scene is expanding 6InterviewOSN’sDavid Butorac 12

Televisa Internacional’s overall business in Africa hasbeen “great,” according to Ricardo Ehrsam, thecompany’s general director for Europe, Asia andAfrica. “Thanks to the high quality of our content,and excellent dubbing, we have been able to solidifyand grow partnerships with market leaders through-out English-, French- and Portuguese-speakingAfrica.” Ehrsam points to the titles Carousel andAbyss of Passion as strong offerings in that market. Hesays that the universal themes of love, fighting for jus-tice and other overall positive moral messages con-veyed in Televisa’s novelas lend themselves nicely tothe African market. “As the African markets continueto expand and develop as a whole, there is anincreased demand throughout the continent for Tele-visa’s content,” he says. “The transition to digitalbroadcasts will only add to the need for high-qualityprograms, and our ever-increasing catalogue ofEnglish-, French- and Portuguese-dubbed contentmeans that Televisa is poised to meet this challenge.”

Televisa Internacional• Carousel • Abyss of Passion

Carousel

The hugely popular Mixed Martial Arts (MMA)sports property Bellator is already attracting a greatdeal of interest for FremantleMedia International inthe Middle East and Africa. The company has highhopes that its female-skewed entertainment showXOX, Betsey Johnson will also garner a high level ofinterest with buyers across the territories. Both theMiddle East and Africa have already proven to behealthy business areas for the company, according toJamie Lynn, the executive VP of sales and distributionfor EMEA. “As the region’s commercial channelofferings and services expand, there is increasingdemand for more varied content,” he says. “In theMiddle East, the Gulf territories have tended to fundthe biggest commercial projects on pan-regionalbroadcasters, but we are seeing huge growth specifi-cally in Egypt.” South Africa remains the leadingAfrican market, he says, adding, “we are also seeingincreasing demand and new opportunities in Nige-ria, Kenya, Ghana and Angola, amongst others.”

FremantleMedia International• Bellator • XOX, Betsey Johnson

Bellator

“Our biggestbrands are globallyrecognized andtheir appeal in theMiddle East andAfrican regions isas strong as anywhere.”

—Jamie Lynn

“Due to the manysimilarities in cultural sensitivity,African viewers arenaturally drawn toTelevisa’s content.”

—Ricardo Ehrsam

Ricardo Seguin GuisePublisher

Anna CarugatiEditor

Mansha DaswaniExecutive Editor

Kristin BrzoznowskiManaging Editor

Joanna PadovanoAssociate Editor

Simon WeaverOnline Director

Victor L. CuevasProduction Director

Phyllis Q. BusellArt Director

Meredith MillerProduction Associate

Cesar SueroSales & Marketing Director

Vanessa BrandSales & Marketing Manager

Terry AcunzoBusiness Affairs Manager

Ricardo Seguin GuisePresident

Anna CarugatiExecutive VP &

Group Editorial Director

Mansha DaswaniAssociate Publisher & VP of

Strategic Development

TV Middle East & Africa© 2013 WSN INC.

1123 Broadway, #1207New York, NY 10010

Phone: (212) 924-7620Fax: (212) 924-6940

Website:www.tvmea.ws

TV MIDDLE EAST & AFRICA 5

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frica is poised for significant growth, and a number of social and economic factors support the optimism many

in the media business have for this vast territory.There is no doubt that this diverse continent is undergoing

rapid transformation. Aside from the encouraging improvementson the human level—infant mortality and AIDS transmission ratesare declining, while secondary school enrollment is up—theeconomies in several countries are improving. GDP is expectedto grow by an average of 6 percent a year, and foreign invest-ment in the region has increased from $15 billion in 2002 to$46 billion in 2012, according to data released by The Economist.

The reality of Africa’s boom was reflected in the attendancenumbers at DISCOP Africa 2012. The seventh edition of the

only content market to service the sub-Saharan region attracted1,248 delegates, from 80-plus countries and 672 companies,representing a 150-percent increase in attendance year-on-year.

And that’s not all. Patrick Zuchowicki, the general man-ager of The DISCOP Organization, predicts that the eighthedition of the event, which will be held from November 6 to8, 2013, “will see a 50-percent increase in the number of con-tent buyers at the market. It is clear that after China, Africa hasnow become the world’s fastest-growing digital marketplace.”

Indeed, digital households across sub-Saharan Africa areexpected to rise to 49 million by 2018. There are also indica-tors that are of particular interest to media companies that wantto do business in the region. Over the past ten years, real income

Improving economies and new digital infrastructure are contributing to thegrowth of sub-Saharan Africa’s media scene. By Bob Jenkins

TV MIDDLE EAST & AFRICA6

AFRICARISING

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per person has gone up by more than 30 percent. Consumerspending will double in the next decade, which will help boostthe nascent advertising industries in many countries, and, moreimportantly for the pay-TV and on-demand businesses, the per-centage of households that can afford some sort of discretionaryspending is set to grow: from 35 percent in 2000 to 52 percentin 2020.A statistic of particular note—there are three mobile phones

for every four people, the same ratio as in India. The general con-sensus is that as this extremely young population, of which theaverage age is in the mid-20s, starts to have money to spend, itwill reach for smartphones and tablets in the same ways its coun-terparts in other countries have. For international programmingdistributors active in the region, this opens up several interest-ing, if not out-of-the-box, business possibilities.“There is increasing opportunity and growth in the African

TV market,” says Jamie Lynn, the executive VP ofsales and distribution for Europe, the Middle East andAfrica at FremantleMedia International.“Pay TV still has the biggest appetite for finished

programming, while the myriad free-to-air broad-casters are increasingly interested in acquiring formatswhich are already proven successes elsewhere,”continues Lynn. “We believe mobile to be a veryinteresting space in the African content market, asthe take-up of smartphones explodes there. Insome cases, the phone is a primary viewing device,not a supplementary one, as phones can be cheaperto use and run than a traditional TV set. To thispoint, we are beginning to offer our buyers morecontent which has the flexibility to run either astraditional half hours or as ‘bite-size’ episodes ofsix or seven minutes.”

SIZE AND SCALEAny profile of Africa must take into account theenormous disparity that marks the continent, inparticular in sub-Saharan Africa. Countries runthe gamut, from severely impoverished andunderdeveloped with little if any media outlets,to the continent’s most mature market, SouthAfrica, which boasts a healthy free-TV business,divided between state-run SABC and commercialstations, as well as one of the leading pay-TVcompanies in the world, MultiChoice, whichoperates DStv and M-Net.

Of the countries in between these two extremes,the ones with the most developed media markets areKenya, Nigeria, the Republic of Ghana and Angola.Kenya, where Swahili and English are the major

languages, has not only the public broadcasterKenya Broadcasting Corporation (KBC) but alsoseveral free-TV channels, among them Kenya Tele -vision Network (KTN), NTV, Citizen Televisionand the news channel K24. Wananchi operates thepay-TV platform Zuku TV. Nigeria, where English is the official language, has

one of the most vibrant media industries on the con-tinent. The state-run Nigerian Television Authorityoperates numerous national and regional stations. Thecommercial stations include AIT Television, Silver-

bird TV and Galaxy TV. Nigeria is also home to Nollywood,a highly prolific feature-film-production hub.In the Republic of Ghana, English is one of the major lan-

guages, and private press and broadcast stations enjoy signifi-cant freedom. While radio has long been the dominant medium,television is expanding its reach. State-run Ghana Broadcast-ing Corporation (GBC) operates Ghana TV (GTV) and abouquet of digital networks, including the news channelGBC 24. In addition, there is Metro TV, plus TV3 and Viasat 1,which is part of Sweden’s Modern Times Group.In Angola, the television market has been dominated by the

state-run broadcaster TPA, Televisão Pública de Angola, butthe first privately owned TV station, TV Zimbo, launched in2008. Portuguese is the national language.The leading pan-regional pay-TV platforms include

DStv/M-Net, based in South Africa, Kenya’s Wananchi and


Fashion forward: FremantleMedia International, whose broad catalogue includesXOX, Betsey Johnson,is seeing a wealth ofnew opportunities in Africa.


A taste of Mexico: Televisa has built a strong telenovela-distributionbusiness in Africa with series like Abyss of Passion.


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StarTimes, which is run by a Chinese company. China is, infact, investing heavily in Africa. France’s CanalSat/Canal+Afrique is the other major regional pay DTH service.

HUNTING FOR HITSGiven the differing levels of maturity of the various AfricanTV markets, broadcasters have divergent needs and acquisi-tion budgets, but buyers in the region want quality shows,and like their acquisition brethren in other territories, theyare looking for hits.“Our biggest brands are globally recognized and their

appeal in Africa is as strong as anywhere,” says Fremantle -Media’s Lynn. “As the region’s commercial channel offeringsexpand, there is increasing demand for more varied content.“We sell a full range of drama, lifestyle, entertainment,

comedy and kids’ programming across the continent,” hecontinues. “All of our best-known entertainment shows, suchas Idol, The X Factor and Got Talent, have sold both as formatsand finished shows to both pay-TV and terrestrial channels.Other programming, as diverse in style as Project Runway, theJamie Oliver franchise and Merlin, has also sold into theregion. DStv/M-Net remains the leading pay-TV platformacross Africa, but there is increasing competition from region-ally focused pay platforms in a range of sub-Saharan markets.”One imported genre that has been performing exception-

ally well in Africa has been the telenovela. Leading LatinAmerican distributors have been doing brisk business acrossthe region, including Televisa, the world’s leading producerof Spanish-language programming.“Televisa’s overall business in Africa has been great!”

says Ricardo Ehrsam, the general director for Europe, Asia andAfrica at Televisa Internacional. “Thanks to the high quality of

our content, and excellent dubbing,we have been able to solidify andgrow partnerships with market lead-ers throughout English-, French- andPortuguese-speaking Africa.“Due to the many similarities in

cultural sensitivities, African viewersare naturally drawn to Televisa’s con-tent,” continues Ehrsam. “Theyempathize with downtrodden hero-ines struggling against socialinequities in order to persevere.Moreover, the universal themes oflove, fighting for justice and the otherpositive moral messages conveyed inour novelas lend themselves well tothe African market.”Adela Velasco, who is in charge of

sales to Europe and Africa forComarex, agrees. “African audiencesare totally fascinated by the conceptand attracted to teleno vela storiesand formats,” she says. “Business inAfrica has been actively moving for-ward over the past few years, and webelieve this is as a result of theexpertise the African players havebeen acquiring. [Africa is] an emerg-ing territory with great growth

potential, [and] we have been in constant touch with all thechannels in the region and have made inroads there by offer-ing quality programming and great story lines.” Brazil’s Globo is finding an equally enthusiastic reception to

its product. “The region as a whole offers good businessopportunities, and the economic growth has increased thedemand for our products across the board, whether teleno velas,series, documentaries or one-off specials,” explains RaphaelCorrêa Netto, the company’s head of international sales.Netto reports that several of Globo’s titles are successfully

playing in prime time in a number of African countries,including Kenya, Zambia and Namibia. Traditional licensing of programming is not the only busi-

ness Globo has in the sub-Saharan region. Brazil’s leadingcommercial broadcaster also operates a digital channel, TVGlobo Internacional, available worldwide on satellite, cableand IPTV. Of the total global subscriber base of 620,000,about a third are located in sub-Saharan Africa.

PROGRAMMING PREFERENCES There are a total of 47 countries in the sub-Saharan region ofAfrica. While opportunity is spreading everywhere in the region,some of the countries are developing at a faster pace and offergreat potential. Micheline Azoury, the head of international salesand brand manager for Mondo TV, opines, “while it is fair to saythat, right now, the entire sub-Saharan region is boiling and mov-ing ever faster in media, South Africa and Kenya really stand out:South Africa because it is the biggest economy in the region,and Kenya because the building of digital infrastructure there willsee many new channels launching in 2013.” Africa is a focus for Passion Distribution, which specializes in

factual entertainment, reality, documentaries, lifestyle and game



Ladies night:Comarex has sold numerous telenovelas intoAfrica, includingUntamed Beauties.

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TV MIDDLE EAST & AFRICA 11

shows. Rebecca Thomas, a sales manager at Passion, points to“Ghana, Kenya and, of course, the jewel in the crown, SouthAfrica, with its strong pay sector,” as three of the most promis-ing countries in the region. “There are countries such as Zim-babwe from which we could have hoped for more, but theregion as a whole is definitely opening up.”One of the key features of the sub-Saharan market has been

the divide between regional and pan-regional channels. “Cur-rently we work primarily with three major pan-regional chan-nels that buy several Globo programs annually,” Netto says. Hedoes acknowledge, however, that, “local channels do havegreater traction with the audience, which does mean that, ulti-mately, our programs get watched by a larger audience.” To a kids’ company such as Mondo TV, this is clearly of great

significance. “While the pan-regionals have the advantage ofbeing able to offer you a single contract at a much higher pricethan any of the individual terrestrial stations,” says Azoury, “theyare much more selective, and they do also require a window ofexclusivity, which can often be a very long one.” But for Azoury,the real advantage is the ability to work closely with the terres-trial channels. “The terrestrials all have different strategies and adsponsorships they have to stick with, and this is a plus for us as aproducer and program supplier as it enables us to work veryclosely with each channel to help them meet their needs.”

GAME ONBesides telenovelas, sports programming is at the top of buyers’lists. This is, of course, a very specialized area in which football,in particular the English Premier League, where so manyAfricans play, and the UEFA Champions League, dominates.While football is universally popular, there are regional varia-tions where it has serious competition—rugby and cricket inSouth Africa of course, and, to a lesser extent, cricket in Kenya.Distance running and motor sport are also very popular acrossEast Africa as a whole, while wrestling is massivelypopular in Senegal.While finished product, notably American

dramas and comedies, are very popular across theregion, followed by documentaries and children’sprogramming from Western distributors, Africanbroadcasters are starting to explore format and co-production deals.“There is a lot of interest in collaboration on

scripted formats and we are currently in contactwith a Nigerian production company that wantsto adapt some of our telenovelas for the Africanmarket, which is a completely new developmentfor us,” says Berta Orozco, the sales executive forWestern Europe, Africa and the Middle East atColombian distributor Caracol Television.It is a sign of just how significantly the mar-

ket in sub-Saharan Africa has developed, that co-productions and production deals are nowincreasingly common. Netto reports that “Globohas received many requests for co-productionand exchange of expertise from many impor-tant players in the region.”Africa has set a date of 2015 for a full switch

from analogue to digital signals. While nobodythinks that many, if any, countries will make thatdate, it is likely that some, in particular South

Africa, Kenya and Ghana, will be close. Indeed, while describingher talks as “early stage negotiations,” Mondo’s Azoury revealsthat, during DISCOP Africa last year, she “began talks for IPTVand OTT deals in South Africa and Nigeria.”

THE DIGITAL HORIZONWhile cautioning that “digital television still faces structurallimits in many African countries,” Netto believes that “thetrend is that digital television will become increasingly com-mon in the coming year, and we believe that consumers every-where increasingly want access to content that is nonlinear andavailable on multiple screens. VOD is a natural extension ofthis desire.” For this reason, Globo sees VOD as important forbusiness in this region.According to a report published by Digital TV Research,

about 35 percent of TV households in sub-Saharan Africa—14 million households—subscribed to digital services in2012. By 2018, the number of households is expected tojump to 95.5 percent, or 49 million households. Kenya, Tan-zania, Uganda and Zambia are expected to complete theirdigital switchover by the end of 2015.On the digital terrestrial television (DTT) front, two-thirds of

African television homes will take both pay- and free-TV DTTby 2018, up from only 11.7 percent at the end of 2012. Sub-Saharan Africa will have 33.8 million DTT homes by 2018,along with 25.7 million free-to-air homes and 8 million pay-TV homes, up from 4.6 million in total at the end of 2012.The most prominent DTT players are the China-based

StarTimes, available in 10 countries with some 1.5 millionsub-Saharan subscribers, and MultiChoice’s GOtv, which ispresent in five countries.As media markets in the sub-Saharan region continue to

expand, international production and distribution companieswill see ever-greater potential for business in the region.

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The queen of talk: Lifestyle content like

Oprah Behind theScenes has fared wellfor Passion in Africa.



By Mansha Daswani It’s not been an easy road for pay TV in the Middle East. For years,two entities—Orbit and Showtime Arabia—fought to gain payingsubscribers in a region where there is an abundance of free-to-airsatellite channels, and piracy has been rampant. Orbit and Show-time decided to join forces in 2009 and the combined platform,rebranded as OSN, has made huge gains ever since. With its plat-form now secure—previously, signals were hacked and transmittedto Dreambox set-top boxes available across the region—OSN hasbeen luring paid subscribers with a mix of top-notch content, localand international, and a sophisticated TV Everywhere strategy.David Butorac, the CEO of OSN, shares the gains made by the plat-form over the last two years and reveals what’s in store for the future.

TV MIDDLE EAST & AFRICA: What are the major gainsyou’ve seen in OSN’s subscriber base over the last year?BUTORAC: In December 2010 we finalized the switch of ourconditional-access system to a secure silicone-based system and[that] shut down the piracy [by preventing the transmission ofOSN signals to illegal set-top boxes]. Ever since then, we’ve seena significant growth in our subscriber base. In 2012 we addedmore than 30 percent of the total base in one year alone. After18 years of pay TV in the region it’s finally really taking off.

What we now see is rapid acceleratedgrowth, some of that driven bythe cut down in piracy andsome of it driven by invest-ments that we’ve made incontent and in marketingthe platform.

TV MIDDLE EAST &AFRICA: Tell me aboutthe new investmentsyou’ve made in enhanc-ing the channel lineup.

BUTORAC: It’s beentwofold. When you look atthe history of our platform,we’ve always had a repu-

tation for the premium nature of the English-language con-tent—first windows. We’re now running most of our U.S.series in full 1080i HD within 24 hours of the U.S. releaseand that has removed the imperative for download piracy.That’s one significant step we’ve taken. In September 2011 we launched our first Arabic-language

entertainment channel, OSN Ya Hala! HD, and that imme-diately rocketed up the charts. It’s now our number twochannel overall in terms of viewership, on a 108-channel plat-form. In January 2013 we launched two more Arabic-languageentertainment channels. OSN Ya Hala Shabab HD is target-ing a slightly younger demographic and is a little moreEgyptian focused. OSN Ya Hala Arabella HD is a telenovelachannel—soap operas out of Mexico, dubbed into Arabic,are hugely successful here. Investment in Arabic-languagepremium content has been a core strategy and it’s signifi-cantly paying off in terms of viewership and sales.

TV MIDDLE EAST & AFRICA: You mentioned that Ya Hala!is your second highest-rated channel; what’s number one?BUTORAC: Our Movies HD channel. Western movies arestill a significant driver. We have output deals with all sevenHollywood studios. The whole concept of, you’ll always see itfirst on OSN, is very clearly the case with our movie content.

TV MIDDLE EAST & AFRICA: Having a platform thatserves so many countries, how can you tailor your servicesto the unique tastes of each market?BUTORAC: We do it in different ways. If you look at OSN YaHala! HD and OSN Ya Hala Shabab HD, they [each have a]slightly different focus, and different premiere times. So wewill premiere more for the Gulf states on Ya Hala! and Shababis more for Egypt, KSA [Kingdom of Saudi Arabia], and it’sstyled around [those markets] from a content perspective. Wedo the same with our movie channels; some of our moviechannels are more designed for prime time in the Gulf statesand some are designed for prime time in Egypt and KSA.So yes, we do a regional feed, but we do create differentimperatives for different markets in terms of program tim-ing and the style of programming. And we do offer amix. Our Arabic-language content is produced in theGCC [nations of the Gulf Cooperation Council,including] Kuwait and United Arab Emirates. We havecontent that’s produced in Saudi Arabia and we havecontent that’s produced in Lebanon and Egypt.

TV MIDDLE EAST & AFRICA: How has HDtake-up been?

OSN’sDavidButorac


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BUTORAC: HD is huge. We’re now running 36 HD chan-nels across the platform. There are about 4 million HDscreens being sold every year across this region. What we’vewitnessed (there’s no industry ratings in the Middle East, sowe rely on our research) is that the viewership of our HDchannels has grown by about 20 percent on each channelover the last year. We are investing heavily in ensuring thateverything we do now is HD. We’re converting our ownchannels to HD and all the new services that we’re addingto the platform. The intention is to get the entire platformto HD. That’s not going to happen this year, but certainly aswe step forward with all new program acquisitions andchannel acquisitions, the focus is on HD.

TV MIDDLE EAST & AFRICA: How are you allowing yoursubscribers to access OSN content on multiple devices?BUTORAC: We’ve invested in two significant digital plat-forms. The first is OSN Play, which is our digital playeravailable region-wide on tablets, smartphones and PCs. Ithas almost 100,000 registered users already and we’ve onlyhad it in market for less than 12 months. The OSN sub-scriber gets the app for free and the content they canreceive on the player is tied to their subscription—so ifthey are a movie subscriber they can watch movies, if theyare a sports subscriber they can watch sports. We will con-tinue to develop OSN Play. The next advancement is thatwe’ll develop significant push capabilities—we’ll allowconsumers to control their home set-top box and pushadditional data [to the TV set] so it becomes a true second-screen experience. The second product that we launched was our hybrid

set-top box, OSN Plus HD. It’s a terabyte PVR with an

ethernet and a satellite connection. That allowsus to open up vast libraries of on-demand con-tent. Currently we have about 750 movie titles,free on-demand, and about 50 pay-per-view[movie] titles. There are almost 1,000 differenttitles of content that the consumer can watchthrough download off the ethernet. That producthas been hugely successful. We launched it in Sep-tember 2012 and already there are more than40,000 units in the market.

TV MIDDLE EAST & AFRICA: You mentionedthat movies are a key driver and I imagine sportsare as well. How do manage the cost of escalat-ing sports rights?BUTORAC: We’ve taken exclusive coverage of U.S.PGA Golf off FOX Sports and it is now exclusivelyon OSN. We carried the Olympics to huge successon multiple platforms. We have a significant positionin rugby, golf, cricket—a number of the sports thatare of appeal in the region. Where the issue lies isthe monies that are being paid by some of the sportsbroadcasters for world-class football (soccer) rights.They are being paid at significantly uneconomiclevels. We can’t afford to, nor do we wish to, payuneconomic rates. I think some economic rationalitywill start to spread across the region. Two sovereign-backed sports broadcasters [Al Jazeera Sport and AbuDhabi Sports] are certainly showing signs of recog-

nizing they need to bring the rights costs down. The [newnegotiations for] English Premier League will be of great inter-est. The rights haven’t landed yet and despite what we’ve seenin the press, I believe those costs are going to come down [tobelow] where they were under the previous deal. We’ve alsoproved, by increasing the size of our base by 30 percent in a sin-gle year, that the consumer wants to watch more than justsports. They want to watch television seven days a week, notjust twice a week for 90 minutes at a time. That’s allowing us tocontinue to grow by aggregating meaningful and world-classsports alongside the best entertainment.

TV MIDDLE EAST & AFRICA: What are your priorities forthe rest of this year?BUTORAC: We will continue to develop and be innovative incontent and in technology. We have a lot of room to grow thesubscriber base and that’s going to be our priority. The best way togrow the sub base is to ensure that we have the best quality con-tent, that we’re recognized for the fact that you’ll always see itfirst [on OSN] and that our technology platform stays innova-tive and world-class.

TV MIDDLE EAST & AFRICA: What’s the penetration rate forpay-TV services in the region?BUTORAC:The total number of TV households in the regionis probably in the order of 90 million to 92 million. Penetration oftotal TV households is very small. We see the addressable marketfor pay TV as being [about] 6 million households—[homes thathave reached a level of] affluence such that they can afford a pre-mier product like OSN. We’re still at a relatively low penetrationrate, so that gives us the confidence to know that our businesscan continue to accelerate.

Fit for the MiddleEast: OSN Ya Hala!has found great success with imported Turkishdramas, includingAwdat Muhannad,dubbed into Arabic.



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TV Middle East and Africa MIPTV 2013