As local media owners look for ways of growing their businesses, many forge a new path by spreading north into the rest of Africa. Melina Meletakos reports.
Africa is burgeoning and a number of South African media owners want to grow with it by extending their reach across the continent. They are all following different strategies to carve a space for themselves in Africa’s emerging markets.
The Mail & Guardian in May 2014 launched Mail & Guardian Africa, a pan-African, digital news and information portal led by editor Charles Onyango-Obbo from Nairobi, Kenya. The reason the independent media house decided to expand into Africa, says Onyango-Obbo, is because it believes that as Africa prospers, it is converging too. “There have been so many homogenising forces – Nollywood, DStv, Big Brother Africa – working in the background to create a common African experience. We wanted to speak to that ‘new African’,” he says.
Covering Africa in the digital age is not very difficult, says Onyango-Obbo, but M&G Africa has faced two challenges in telling stories for an African audience. The first is that people respond differently to political stories about their country in local, Western and pan-African media. “They actually make more demands from fellow Africans than from other international media. That was a total surprise,” he explains.
M&G Africa also found that in countries like Nigeria, sub-politics attracts more interest than national politics. “We are beginning to think differently about what constitutes national and regional news across the continent. This might mean, for example, if you are doing a ranking story, you are more effective ranking Lagos against Johannesburg, Nairobi and Addis Ababa, than ranking Nigeria against South Africa, Kenya and Ethiopia,” says Onyango-Obbo.
This kind of insight has also forced M&G Africa to tweak its business model, which combines conferences, sponsorships and traditional advertising – a strategy that hadn’t previously been tested at a pan-African level. “Rather than a pan-African conference on Ebola, for example, we learnt that you have more impact if you have smaller dialogues in the regions about the impact of Ebola on eastern or southern Africa,” explains Onyango-Obbo. “Knowing what works best at continental level, and what is best at regional level, is key here.”
While the M&G decided to take its brand directly into Africa, the Times Media Group (TMG) has entered the market by buying shares in existing media groups on the continent. In the second half of 2013, the company bought a 32% stake in Ghana’s Multi Media Group. The largest independent media group in Ghana, it has six radio stations and a number of television channels. In 2014, TMG acquired a 49% stake in Kenya’s Radio Africa Group (RAG). The Star, Kenya’s third largest newspaper, is also part of RAG, as is the digital terrestrial television (DTT) service, Bamba TV.
TMG, traditionally a newspaper group, decided to acquire broadcasting assets because newspaper markets in some areas in Africa are less prevalent that in South Africa, says TMG managing director of broadcast and content, Andrew Gill. “The bulk of advertising goes into radio and increasingly TV, so we are going where the growth is,” he explains.
The company bought shares in Kenyan and Ghanaian media groups because it wanted an eastern, western and southern presence in Africa, says Gill. “Ghana is a good springboard for the west and Kenya is the largest market in east Africa, which makes them both perfect fits for TMG,” he explains. “There is strong growth in these markets. In these countries, the media markets are underdeveloped, whereas in South Africa there is only really market share growth. There are a fair amount of issues in both Kenya and Ghana, but we realise that they are cyclical and can be managed.”
Broadcasting giant MultiChoice, on the other hand, makes use of a network of joint ventures, franchises and agents to provide its services to 50 countries across sub-Saharan Africa and the Indian Ocean islands. Its offering includes the DStv service via satellite, mobile and tablets, as well as live streaming of channels and the DStv Catch Up service to connected devices via the DStv Now application. It also recently launched GOtv, which is MultiChoice Africa’s play in the DTT space.
MultiChoice is an African business, says MultiChoice Africa CEO Nico Meyer, so it was only a natural progression that it would expand its services across the continent. “Africa is undisputedly regarded as the world’s next big growth market with huge potential,” says Meyer. “As a company born and bred in Africa, we recognise the importance of building sustainable solutions, which means our operations are built on local partnerships in each country we operate.”
Investing in promoting local film and television entertainment is a priority for the company, explains Meyer, saying that the MultiChoice Africa’s commitment to invest in local skills development has “not only resulted in ongoing training of African film crews and production staff in the creative, sport, technology and related industries but also contributed to the empowerment of locals as our offices are now 100% locally run in each country”.
But MultiChoice Africa’s massive expansion across the continent has come with its own set of challenges. Adequate infrastructure is one of them, says Meyer, as is the availability of pay TV and call centre skills, which were lacking because there weren’t any similar services before MultiChoice launched. Another challenge, he adds, is to remain on the cutting edge of technological developments. “Many of our viewers are not aware of the vast machinery that delivers DStv and GOtv, and rightfully so. Our business is providing top quality entertainment while theirs is to enjoy the experience,” explains Meyer. “We are committed to using every technology available to us to enhance that experience, and developments on the horizon hold the promise of exciting new benefits to our subscribers.”
Africa is a growing market for the out of home (OOH) industry as well. Jacques du Preez, founder and managing director of Provantage Media Group, says Chinese investment in the continent means that we will start seeing new infrastructure like airports in some of the markets. “We’re also seeing a lot of new opportunities in transit infrastructure – new bus fleets (and) taxi operations. Some of the countries are looking at bus rapid transit (BRT) systems. So, again, it will take time. It will probably take longer than it took here because of the economy. And then the retailers are also driving it,” says Du Preez.
Continental Outdoor has invested a lot of money in digital inventory both in South Africa and Africa so that multinationals can buy campaigns off them across the continent, says managing director Bazil Lauryssen. While some media owners buy into existing African companies, Lauryssen says this isn’t an option for Continental Outdoor. “We’ve tried. They run their business in a different way. You have to grow an organic business so that you know what you are growing,” he explains.
As other international competitors like StarTimes move into some African regions, it will be interesting to see how South African media owners stay ahead in a challenging and very different marketplace.
This post was first published in the March 2015 issue of The Media magazine.