The second screen phenomenon: drivers and opportunities in Africa

www.ovum.com

© Copyright Ovum 2014. All rights reserved.

The second screen phenomenon: drivers and opportunities in Africa

OTT Television & Video-on-Demand Summit Africa

Johannesburg, 27th May 2015

Thecla Mbongue, Senior analyst, Africa

2 © Copyright Ovum 2014. All rights reserved.

Contents

§  About Ovum

§  Africa screens

§  Key drivers

§  Opportunities

§  Ovum viewpoint


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total


Africa screens

Africa screens – end-2014

TV sets

107 million TV sets, including 57 million in sub-Saharan Africa.

Penetration: 36% of households in sub-Saharan Africa.

Smartphones

127 million smartphones.

Penetration: 14% of total mobile subscriptions.

Broadband connections

§ 150 million broadband subscriptions (inc. 41m portable) § 11 million fixed broadband subscriptions

§ 17% of total mobile subscriptions §  5% of Africa’s households


Africa screens

Africa screens – end-2014

Analog cable 1%

Analog terrestrial 63%

Pay digital satellite

21%

Free digital satellite

3%

Primary digital terrestrial

12%

IPTV 0%

Split of TV households by platform,- Sub-Saharan Africa 2014

Mobile content users (million) Sub Service 2012 2014 Music Ringtones 11.48 21.61 Music Ringback tones 32.28 48.60 Music Full-track Downloads 6.12 18.29 Music Music Streaming 3.98 15.42 Video/TV Video/TV Streaming 10.75 43.56 Video/TV Video/TV Downloads 5.73 12.39

Conservative Forecast based

on 2012 landscape.


Key drivers

Why multiscreen?

Because I need to be/am: mobile (away from a TV set)

Because I get more content from my smartphone and/or tablet


Key drivers

Content

§ Africa/local relevant content increasingly available on line thanks to social media and improved data connectivity.

§  Free analogue TV is the dominant TV platform and in most African countries, Free TV is dominated by state-owned broadcasters. Going online has become a mean to get information, entertainment from other perspectives.


Key drivers Content

§  VOD services increasingly available.

§  VOD services offered by OTT and more recently by Pay TV market leader DStv.

§  DStv offering is however targeting high end users as the service is available to premium users.


Key drivers

Content

Online content is more thorough and enables to narrow down to more specific needs


Key drivers Content


Key drivers

0

100

200

300

400

500

600

700

800

900

1,000

2014 2015 2016 2017 2018 2019

Mill

ions

Forecasts: broadband, smartphones and TV households in Africa

Mobile broadband connections

Smartphones

TV HH

Fixed broadband

Data connectivity

§ Over 150 million mobile broadband users end-‐2014. 3G to dominate the landscape over the next five years, though LTE is set to grow faster, accounKng for more network launches in 2017. Challenges include regulaKon (spectrum issuance) and the cost of backhaul infrastructure.


0

50

100

150

200

250

Millions Smartphone usage forecast in Africa, 2014 -‐2019

2014 2019

Smartphones § Ovum forecasts that the number of smartphones in Africa will jump from 127 mill. in 2014 to over 494 mill. By 2019. High growth enabled by more affordable data-‐capable devices, feature phones and smartphones.

§ Across Africa affordability is sKll an issue for the average end-‐user. However, increased partnerships between handsets manufacturers and operators has been beneficial for the consumers.

§ At the same Kme, operators promote more segmented prepaid data plans or someKmes partner with banks to offer handsets financing schemes.

Key drivers


Digital Africa survey: Enablers of data-service usage

§  Affordability of data devices is seen as most important enabler of data use now, and will be jointly most important in 2019, with fall in data-service prices.

§  LTE seen as of low significance now, but will be much more important in 2019.

The most important enablers of data usage and revenue in Africa, now and in five years

Source: Ovum Digital Africa Survey, 2014

Key drivers


Opportunities

§  Mobile-money services seen as most important, now and in five years’ time.

§  E-commerce services rise to rank second in importance in 2019. Education, health, cloud, and music & video streaming all tipped for growth.

Importance of digital services as a revenue generator, now and in five years

Source: Ovum Digital Africa Survey, 2014

Digital Africa survey: Enablers of data-service usage


0%

5%

10%

15%

20%

25%

30%

35%

40%

Res

pond

ents

(%)

Which of these types of TV and video content offers the most commercially valuable opportunities for multiscreen and interactive innovation?

Industry view: Sports and entertainment will be the prime genres for multiscreen innovation

Source: Informa Telecoms & Media, Future of TV survey, 2Q13, n=409

Opportunities


Opportunities

Promoting a companion device

§  For many of the broadcasters and operators, the second screen provides

§  the key tool for increasing viewer engagement in content. The more engaged viewers are, the more likely they are to consume more of their products, which for broadcasters are their shows and their channels, and for pay-‐TV operators are their subscripKon content and their plaXorm-‐based services.

§ Giving viewers the ability to -‐ among other acKviKes -‐ access show-‐related content, parKcipate in play-‐along games and viewer polls, and communicate with friends, "fans" and representaKves of the shows themselves on social-‐networking sites has the potenKal to increase raKngs and, specifically for operators, increase customer saKsfacKon and reduce churn.

§  Increase adverKsing revenues as the broadcaster’s reach becomes bigger.


Ovum viewpoint §  Improved and more affordable connecKvity is fuelling mulKscreen usage. MulKscreen in Africa is now mainstream. This is no longer an early-‐adopter play: most TV viewers do something else when they watch TV. Engaging on a second screen – a phone, tablet or PC -‐ is one of the most popular opKons, alongside talking, eaKng and reading.

§  MulKscreen open new revenue streams for tradiKonal broadcasters, either in for of subscripKons or advert funded services (TV broadcasters can leverage from their exisKng adverKsers base).

§  Despite a greater involvement from tradiKonal broadcasters in content producKon, partnerships remain essenKal to increase usage for all the ecosystem.

§  partnerships for content producKon §  partnerships with networks provider for efficient pricing (VOD price plans)


Thank you

[email protected]


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