We recently wrote about telecoms and mobile operators offering multi-play packages (TV + broadband and/mobile, etc.), especially high-speed internet as the only viable way forward in markets around the globe. In parallel, scores of world-class video providers are succeeding tremendously with over-the-top (OTT) ad-supported video on demand (AVOD) and subscription video on demand (SVOD) platforms outside of traditional pay TV lineups to deliver content directly to consumers. Rather than being a threat to operators, these offerings actually present incredible revenue opportunities as consumers require evermore connectivity to ensure quality-of-experience.
Doors are opening across many territories including Africa. No doubt each African nation is unique unto itself (compare even sub-Saharan Africa countries like South Africa and Zimbabwe), but almost all African telecom and wireless operators can implement winning multi-play strategies.
Use Video to Play to Your Strengths
Build winning video services by leveraging your network capacity to deliver quality-of-service which video-only providers can’t match and which you can use to drive profitable multi-play bundles.
Even DsTV , the dominant force in African video for many years, is facing strong headwinds as subscribers abandon top-shelf pay TV lineups in favor of “skinnier” offerings and OTT video. DsTV’s core weakness is that it’s a pure-play service without the strategic benefit of profitable wireless and internet offerings and zero ability to control prices on the data plans required for quality video experiences.
Realize that even one of the most valuable TV networks on the planet, ESPN has shed nearly fourteen million subscribers in last seven years. And note that since we posted the original version of this article in 2015, ESPN’s customer losses have almost doubled. ESPN is still distributed in more than 86 million U.S. homes but high-end pay TV losses are undeniable and further evidence of the need to balance/blend cable, satellite and IPTV sales with connected services–especially high-speed broadband, wireless.Â
Expand Your ROI Picture
Do not calculate pay TV and VOD ROI solely based on direct subscription and transactional video revenue.
Remember what a pay TV service should be: a means to sell more profitable products such as wireless, Internet and mobile payments. In Africa, this is especially true considering the dominance of DSTV. In most scenarios, a dollar-for-dollar battle with DSTV, StarTimes and local cable and satellite TV providers will be unsuccessful. The African pay TV industry is projected to grow to a $6 billion business by 2020 and you should calculate your return investment for a live TV or video on demand service based upon its ability to win new multi-play customers and reduce churn.
Invest Meaningfully in Content and Technology
Just as with your mobile infrastructure and broadband network, winning IPTV and VOD require significant investment in marketable programming and a scalable IPTV solution.
Over the last several years, African wireless operators and telecoms have invested astronomical sums into mobile and fiber buildout to offer better quality-of-service and to drive profitable broadband uptake. Content and technology spending that will actually make video the tip of the spear for your suite of services is no different. Plan for 50% of your budget (or more) to cover premium programming and dedicate 30-40% of your budget to technology. Of course, marketing is also vitally important, but compelling content and reliable technology are often under-funded versus promotions.
Embrace OTT Video
Embrace premier IPTV and OTT video as the fuel for your biggest current and future profit center: high-speed internet access.Â
Tell the world that you’re the best at bringing a universe of incredible web-delivered entertainment into the living room and on the go. Internet access is almost certainly the most profitable line of business for any operator providing web connectivity. In Africa, many users go online via their mobile providers, furthering the business case for facilitating web-based entertainment even as you offer world-class pay TV.
Harnessing premier web-delivered programming will also require operators with owned infrastructure (fiber, wireless, etc.) to reevaluate current broadband internet pricing, which is cost-prohibitive to hundreds of millions of Africans. Indeed, laying fiber, installing wireless towers and buildout requires untold billions of dollars of investment and there is understandable pressure to recoup those costs in short order.
Adjust Bandwidth Pricing
The reality is that in Africa and in most other parts of the world with existing or growing connectivity, on demand and live TV streaming video are the chief drivers of consumer demand for going online on practically device.
In the Middle East and North Africa, SVOD revenue is projected to pass US$2,000,000,000 by 2023. However, many mobile and home internet plans include stringent bandwidth limits that allow users to do little more than surf the web, connect socially and check email. Given the appetite for broadband access that web-based video is stirring, operators should experiment with increasing bandwidth usage limits which would enable mobile users to enjoy more video programming while preserving healthy profit margins.
Obviously, an operator’s most ideal scenario would be for customers to subscribe across mobile, internet and IPTV. But loosening broadband caps even as you offer quality IPTV, will drive adoption of your most profitable lines of business.
Avoid the Content Arms Race Trap
Launch the right content lineup and play to your strengths.
Even with its recent decline, the African pay TV market is still dominated by South Africa-based DSTV. For many years DsTV was the only pay TV provider with the reach and credibility craved by top-tier international networks. But now premier programmers are bringing new, non-exclusive channels to market which can fuel OTT and IPTV success for operators willing to invest significantly in quality content. Seek out these flexible partners who are hungry for new opportunities and will often consider innovative revenue strategies.
Do Not Overlook Integration and Customization
Choose an IPTV/OTT video platform that will expertly achieve mission-critical integration with your existing billing, network authentication, user-experiences, market-by-market products and other infrastructure.  The initial integration and customization effort and long-term flexibility will make or break your video success. It also easily the most overlooked aspect of shopping for an IPTV/OTT video solution. Many telecoms and mobile operators focus on equipment pricing and licensing fees, but do not fully evaluate a vendor’s ability to “make everything talk to each other” and pliability for future growth such as new payment systems, user messages and otherwise. Be sure to consider your total cost of service, including the value of expert customization and integration.
Launch Your IPTV or VOD Platform in as Little as 90 Days
Choose our end-to-end, enterprise platform to execute your video strategy and launch in as little as 90 days. You’ve carefully considered your go-to-market plans and mapped your long-term goals. The Matrixstream IPTV/OTT solution can be launched in as little as 90 days, including integration with existing STBs and user devices as well as potential inclusion of your current IPTV system elements. Contact us today to get started quickly.