Online distribution offers global reach, helps sidestep pirates
As increased Web access and mobile phone penetration transform the way more than 1 billion Africans live and do business, a growing number of websites are looking to solve the distribution woes that have long plagued African filmmakers.
Though their business models and catalogs vary, the sites share common goals: to provide an effective outlet for the distribution of African content; to sidestep the pirates who have crippled homegrown film industries across the continent; to create new revenue streams for African content producers; and to allow Africans living in the diaspora to reconnect with their homelands.
“(The Web) provides a perfect opportunity for pirate-free content distribution based on sustainable models,” says Mike Dearham, former head of sales and acquisitions for South African network M-Net, which launched the online African Film Library, a collection of digitally remastered African classics, like Ousmane Sembene’s “La Noire de… (Black Girl)” and Djibril Diop Mambety’s “Touki Bouki.”
Recently, hedge fund giant Tiger Global, an early investor in Facebook, announced it was pumping $8 million of capital into iRoko TV, an online distributor of Nigerian and Ghanaian pics that is the fastest-growing Internet company in Nigeria.
In 2011, the site — YouTube’s largest content partner in Africa — attracted more than 150 million views, a number founder Jason Njoku expects to reach 250 million this year. The site has rights to roughly 3,000 films, and has inked distribution deals with iTunes, Amazon and video-sharing site Vimeo.
The success of iRoko has proven to other tech-savvy African entrepreneurs that a viable market exists for online content.
Riverflix, a startup founded by U.S.-based Kenyan entrepreneur Colo Shivere, has acquired roughly 1,500 titles from across the continent (including Kenyan hit “Me, My Wife and Her Guru” and Zimbabwean comedy “Lobola”) since launching last year. ReelAfrican, which its Ghanaian founders have dubbed the “African Hulu,” offers popular TV series like MTV’s “Shuga” and Kenya’s “XYZ Show” alongside current films. GojoCinema was launched to provide an online platform for Ethiopia’s small but energetic film industry.
As the sites find their footing, they continue to explore the best way to monetize content. Riverflix charges 99¢ for a week’s access to its VOD service, but is planning to introduce a subscription model, which will cost around $5 per month. ReelAfrican relies entirely on ad revenues; iRoko TV grew by offering free content and generating revenue through ad sales, but is planning to switch to a subscription model later this year. GojoCinema charges $2 for 48-hour access to pics on its VOD service.
The sites are focused on tapping into the vast diaspora community hungry for homegrown content, due to the logistical hurdles facing the continent and the potential for far greater ad revenues in the U.S. and U.K.
ReelAfrican is for now only available in the U.S. According to Shivere, 70% of Riverflix users live in the diaspora; iRoko TV says roughly 90% of its traffic is drawn from overseas, pointing to the desire, says founder Njoku, for Africans in the diaspora to have a connection to their homeland.
For African consumers, access to the sites remains hampered by poor IT infrastructure. According to the Intl. Telecommunications Union, Internet penetration in sub-Saharan Africa was just over 10% in 2010, roughly a third of the global average. Costs remain prohibitively high, while speeds are often too sluggish to take advantage of streaming-video services.
But the arrival of undersea fiber-optic cables in recent years has boosted Internet penetration rates across the continent, a trend that seems likely to continue with more than $2 billion invested into new cables for Africa in 2012 and 2013, according to a recent report by TeleGeography, a telecom market research company.
Prices are falling, too: According to the ITU, the cost of broadband access to providers across Africa dropped 55% between 2008 and 2010. While the savings haven’t yet trickled down to consumers, it’s a development that is likely to lead to more affordable broadband access in the coming years.
Perhaps the biggest game-changer for African viewers is the booming mobile phone market, which is growing at a faster rate on the continent than anywhere in the world. According to the GSM Assn., which represents mobile phone operators across the globe, the number of African mobile subscribers has grown by 20% in each of the past five years. It estimates there will be more than 735 million subscribers in Africa by the end of 2012.
As a result, the vast potential of online distribution in Africa remains largely untapped. M-Net’s Dearham sums up the possibilities: “A billion people who will all have enabled phones and are connected to the Internet: that is a massive market.”While the African Film Library, like its online counterparts, is targeting a global audience, Dearham predicts that trend won’t last. “Three years from now, it’s going to be a whole new discussion,” he says.