In an exclusive interview with IP&TV News in anticipation of November’s AfricaCast conference, Steve Christian, vice president of marketing, Verimatrix, discusses the commercial opportunities and security challenges presented in Africa’s thriving IPTV industry.
IP&TV: What do you think are the biggest challenges and opportunities facing operators with the looming analogue switch off in Africa?
Steve Christian: As with any large scale project, the story around the 2015 analogue switch off initiative in Africa is a complex mix of technical, social and political issues. Some of the key concerns in play seem to be:
1: a slow moving regulatory framework, plus conflicts in priorities, which creates uncertainty and unevenness in the overall program
2: limited existing infrastructure for distribution of signals and supporting backhaul services
3: offering uniform access to public broadcast services post transition. Unlike other countries there is no alternative cable network to support alternate analogue rebroadcast for extended periods after analogue terrestrial signals have been switched off
4: high urban poverty levels that will require governments to subsidize digital set top boxes (STBs) in some capacity. The best approach to this challenge is unclear; cheaper STBs will maximize the reach of the roll-out but offer very little upside for value added services, while more advanced boxes will perhaps slow the roll-out but offer operators more long term opportunities.
5:reallocation of broadcast spectrum to alternative uses and the business opportunities that this may stimulate. These collateral concerns are compounded as the overall program is delayed or challenged
It’s worth noting the substantial there are also opportunities that are potentially at hand here. African consumers have shown a high propensity toward adoption and creative applications of mobile devices. With this background of adapting to new technology quickly, there is considerable hope that the technological changes of digital broadcasting will be broadly welcomed as long as it is seen to be an affordable option. We have seen many companies and individuals working on business models in anticipation of the analogue switch-off and our belief is that there will be a boom in new opportunities around the selling and distribution of content.
IP&TV: How do you think African operators can make the delivery of IP-based content cost effective especially when there is limited broadband capacity?
It’s a bit of a myth that the content of Africa is under connected to the rest of the world. Over the last 10 years a large and growing Internet bandwidth has started to be delivered to African shores by way of undersea cables – approximately 19 Tbps of submarine capacity is now available on the African coast. Some studies suggest that more than 40% of the population now lives within 50 Kms of a high capacity fiber node that is connected to the submarine cable network. The challenge, of course, is providing the infrastructure to get this this global bandwidth efficiently packaged and accessible to the local population. Key challenges include regulatory frameworks (national telcos still have a monopolistic position in many African markets), high prices for local bandwidth and the availability of technical skills to build the necessary networks. If the cost of accessing IP networks can be reduced along with the shift to digital broadcasting, we will likely see a dramatic uptake in services.
IP&TV: What approach do you consider free-to-air digital terrestrial and satellite operators in Africa and the Middle East should take when securing their multi-network services?
Even in a world of free to consumer broadcast services, there are many reasons to consider including security mechanisms in the deployment model to help regulate and properly control the use of the content within and across borders. In a digitized world, and where broadband services become widely available, we see illegitimate redistribution of content across the Internet has the potential to rapidly undermine the business of content owners and service operators alike. This is the reason why content owners are pushing FTA operators to use approved security solutions to secure even “free” content. We also see the video consumption model has the potential to rapidly change over time to much more of an on-demand model. Innovation in various forms of search and discovery services will enable an increasing proportion of consumers to adopt more personally optimized patterns of consumption which complement the linear broadcast schedule. Where this preference for “on-demand” services arises, DTT operators who have relied on linear distribution alone must ensure that their chosen digital broadcast ecosystem is easily upgradable to introduce on-demand services to maintain a competitive advantage.
On the business front, FTA operators may need to rapidly evolve from the current advertising supported only models to a hybrid approach – a combination of free and pay services. Perhaps this model will consist of direct payment for on-demand and niche content and free for the content which can still attract large numbers of viewers and still support advertising revenue. Irrespective of the model used, these operators will need a simple, cost effective and future proof security solution that will allow it to secure all types of video content across all types of distribution networks and to all types of receive devices such as the solution provided by Verimatrix.
IP&TV: How important do you consider the roll out of LTE networks to the future of multi-network video and TV services in Africa?
With the serious limitations on available wired infrastructure across much of the continent, especially at the local level, it’s likely that this market is and will largely remain a “wireless” environment for both communication and entertainment services. As can be seen today, a mobile device is the main and often the only screen for Internet access throughout Africa. The majority of Internet users in Africa have their first Internet experience on mobile, and smartphone usage is forecasted to explode in coming years. Assuming the advent of these LTE platforms will be cost effective for consumers, we believe they will likely assist in the establishment of competitive hybrid service operators that can effectively compete with the few large satellite based content platforms – including those that currently have a near monopoly in large parts of Africa. This will act as a stimulus for the whole industry.
IP&TV: How do you see African operators gathering the necessary expertise to implement next generation video services?
Africa is seen by many in the TV industry as last significant global market for the development of new digital platforms and associated information and entertainment services. Individual African national markets are opening up and their economies are growing at a much faster rate than other more developed parts of the world – albeit from a lower baseline. The implication is that consumer income and, more importantly, disposable income are both increasing to the point where these new services become commercially realistic. It’s important that local integrators and operators are in charge of their own destiny as the markets take off, and can bring the expertise and necessary services to tap into local opportunities. One approach to help catalyze this process is embracing technology vendors that have experience in successfully deploying technology components in other parts of the world and creating partnerships. Tapping into this knowledge and experience and establishing long term relationships rather than simply selecting technology on an ad-hoc or price-first seems to be a logical way forward.
IP&TV: What competitive content strategies do you see operators adopting in Africa and the Middle East?
With a unique diversity of culture, languages and tradition the Middle East and Africa is on the threshold of becoming major supplier of content – both locally and globally. For example, it is said that Nollywood (Nigeria) is now annually producing more movies than Bollywood (India) and Hollywood respectively. While there will always be a desire for Hollywood originated blockbusters and their stars, we have also seen that localized content is a very important part of any operator’s service offering – so there is appropriate that there is an increasing amount of African content becoming available in the African markets. Availability of a mix of local, regional and international content enables new digital operators to build a rich content strategy that can differentiate their product offering from legacy pan-African services such as MultiChoice.
Steve Christian will be speaking at this year’s AfricaCast (Cape Town, November 12 – 14), the region’s premier show on the future of broadcasting. For booking and more info go here.