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Streaming giants flock to Kenya in new fight for eyeballs

A woman using a tablet computer to stream a movie. [Getty Images]

Global streaming giants are stepping up their presence in Kenya, with the country emerging as a strategic market in the region in building new audiences for the ubiquitous platforms.

The rush to grow market share comes at a time when streaming platforms like Netflix are experiencing a slowdown in growth in traditional market strongholds of North America and Europe.

In recent months, Netflix has poured millions of shillings into the regional market as it seeks to source new local talent and productions to build its arsenal of original local content.

Earlier this month, Netflix signed a two-year memorandum of understanding (MoU) with the ICT Ministry to fund training opportunities for young filmmakers, acquire local content from Kenyan producers and support marketing and consumer protection for producers and users of digital content.

Under the MoU, Sh10 million will fund scholarships for 30 beneficiaries covering tuition, living expenses, learning materials and stipend through the Kenya Film School and the African Digital Media Institute.

Another Sh20 million has been allocated towards all-inclusive scholarships for aspiring creatives to study at other local institutions that provide film and TV studies.

“We are cognisant that there are positive socio-economic outputs generated by our service in the countries where we invest,” said Director of Public Policy for sub-Saharan Africa at Netflix Shola Sanni.

“This MoU will play a major role in harnessing these positive externalities driving impact beyond direct investment in local content only, to measurable inputs in other crucial aspects of the screen production value chain,” she said.

The deal also includes the Kenya Film Commission (KFC) and other State agencies such as the Kenya Film Classification Board (KFCB), which will work to identify areas within the sector in need of support.

Netflix’s announcement came weeks after The Walt Disney Company, Wildlife Direct, the US Agency for International Development (USAID) and the US Department of State kicked off production on the National Geographic Kids Africa educational entertainment series.

The 26-part television series will be shot primarily in East Africa with additional filming in West and Southern Africa.

It is produced by The Walt Disney Company with White Rhino Films as the production partner.

Already, the first group of four presenters who will serve as hosts for the show based in Nairobi have been named with casting ongoing for presenters in Kenya, Nigeria, Rwanda, South Africa and Tanzania.

Analysts expect streaming in Africa to grow rapidly over the next few years. Digital TV Research, a London-based think tank, forecasts African subscribers on digital platforms to grow by 233 per cent to hit 13 million by 2025.

Companies like Netflix, Multichoice’s ShowMax and Amazon hope to use Kenya as a springboard to the rest of the region.

For starters, Kenya enjoys a large population of tech-savvy youth that is active online.

Data from the Communications Authority (CA) indicates that the total number of mobile phone devices connected to mobile networks was 59.58 million, out of which 33 million were feature phones and 26.5 million smartphones.

“As at the end of 2021, at least 94 per cent of the Kenyan population was covered by 4G network,” explained CA in its latest industry report.

“Noting that connection to fixed broadband and computer use is less spread in the country, smartphones are playing a key role in internet access and data transfer.”

This affinity for mobile was the reason that saw Netflix launch a free plan allowing users on Android devices to sign up with just an email address last year.

The company hopes it can reel in curious viewers who will then be enticed to upgrade to one of the payment plans.

Aside from being mobile-first, Kenya’s subscription market is relatively advanced and service providers such as MultiChoice’s DSTv and Mwananchi Online’s Zuku, have for years tried and tested various value propositions to foster customer loyalty.

Streaming giants like Apple+ and Disney+ are thus entering a market where the vast majority of their target audience is discerning and willing to pay.

Multichoice acknowledges the competition coming from both local and international video streaming services in the Kenyan market.

“Global platforms like Netflix and YouTube, and local platforms like iRoko in Nigeria and ViuSasa in Kenya compete with Showmax,” said MultiChoice in its latest annual report.

“These markets offer relatively better connectivity and are attracting more interest from (OTT) over-the-top competitors.”

According to the annual report, Kenya accounts for 10 per cent of Multichoice’s subscription revenues from the rest of the world.

With 11.9 million subscribers, the firm’s rest of the world business segment accounts for 32 per cent of Multichoice’s group revenue, which last year stood at Sh336.1 billion.

Last year, the company introduced its first Kenyan original series, making it the fourth country alongside Nigeria, Ghana and South Africa to have a specific localised version of Showmax.

Leading telecommunications service provider Safaricom is also ramping up its service offering in the digital entertainment space and is expected to make significant ground in the coming years.

The company last year launched the Base streaming platform that mainly gives subscriptions for educational content.

“Content is still a very small business for us, and it’s still in very traditional areas like Skiza,” said Safaricom Chief Executive Peter Ndegwa during the company’s recent investor briefing.

“Now we want to make sure that we operate the content business more strategically and also learn from what other markets are doing.”

The firm last year recorded Sh500 million in content revenue and plans to leverage big data analytics to grow its video subscription base. 

“Big data analytics that can help us understand what our customers are going through and all the work we are doing about the M-Pesa App both for business and individuals allows us to see and have capabilities to distribute content,” said Mr Ndegwa.