More than two decades ago the world’s richest man, Bill Gates, declared “content is king” in an essay published on his firm, Microsoft’s, website. Gates probably had no idea how important that line would become for telecoms operators.
Fast forward 20 years and content, most notably video content, is seen as the Holy Grail inA modern operators’ strategy. Don’t believe me? Look at most markets and see what the major players are up to. In the US, AT&T is in the midst of buying Time Warner for a whopping $84 billion – a move that will give it a massive amount of content. In the UK, BT launched BT Sport a few years back, while Vodafone launched a pay TV move last year in Ireland.
In Africa, Zimbabwe’s Econet Wireless is now making a major play to be the content provider of choice, launching Kwesé Play last month, an over-the-top streaming platform aimed at operators on the continent.
At the recent Capacity Africa event in Kampala, I sat down with Econet Media EVP Ryan Solovei, who is now also CEO of Kwesé Play, to talk about the opportunities that content can offer to telecoms operators in the region.
Solovei claims it has been a “very interesting journey to see how the world has changed so rapidly over the last few years, especially in the video streaming space”. He points to the number of operators that have tried, and failed, to capitalise on the opportunity presented by streaming content.
“We’ve seen a lot of operators try to build services and applications and content platforms, but there hasn’t yet been a case where an operator has made a genuine success out of video streaming. We’ve been watching very carefully, taking these lessons, learning, and applying them to Kwesé Play. We feel it is the next revolution for TV streaming in Africa.”
So what is Kwesé Play? It is a video streaming box and service that can be placed in a home to offer access to hundreds of different content providers, such as Netflix, to African customers. The service, which is aimed mainly at fibre-to-the-home, ADSL and LTE broadband users, will use the fibre backbone network operated by Liquid Telecom, also a subsidiary of Econet Wireless.
Rather than building its own video-on-demand business, Econet Media has built a platform to house “some of the biggest names in VOD globally”, Solovei explains.
“Our business model is partnering with wholesale providers and telecoms operators in a B2B2C structure. What we have enabled our operator partners to do is to enhance their data offerings. Customers have a lot of choice of providers – and content is the biggest and easiest differentiator for a customer to decide which service to go for.”
It offers a box which is powered by streaming company Roku, a company with roughly nine million active accounts. To give you an example of how much content Roku provides, in 2015 it streamed around 5.5 billion hours of content – that’s around 630,000 years, or 7,857 average lifetimes.
The deal with Roku is “exclusive for Africa”, says Solovei. “We’re proud to have this powerful streaming platform as our underlying device partner.”
On top of that, Kwesé Play includes services from around 100 different providers. “We’ve got Netflix, Red Bull TV and YouTube, and we have 100 services now, but we expect that to grow to over 1,000 in the next 12 months,” he says.
“The difficult part [in launching a video service] is the content – you can have a wonderful network or wonderful device, but if you don’t have the content consumers are after, you’re wasting your time. We’ve signed some tremendous deals with content providers to have exclusive rights on some content services. We’re excited about our partnerships and growing them across Africa.”
The service soft-launched in Johannesberg earlier in the year and since then “take up has been very strong”, although Solovei did not share any customer numbers. The company has the rights to sell Kwesé Play across the whole of sub-Saharan Africa, he adds.
So why offer content services through fibre connectivity instead of traditional satellite services? Well, that’s complicated, given that Kwesé Media already has some services distributed by satellite.
Launching in South Africa also seems strange, given that Econet is a Zimbabwean company. Founder Strive Masiyiwa is one of the country’s most recognised business leaders and is highly influential – although he is based in London. Zimbabwe would perhaps seem a more natural location to launch.
Kwesé did try to launch in Zimbabwe earlier this year but, perhaps unsurprisingly, regulatory issues got in the way. The Broadcasting Authority of Zimbabwe (Baz) has refused to license TV stations other than ZBC-TV in the country, save for pay-per-view digital television DStv.
At the launch in South Africa, the company said: “Kwesé chose to launch in South Africa with a fibre optic-based service rather than its normal satellite service, because it is the largest independent provider of fibre in South Africa. Kwesé Play will use any fibre-optic provider, and will not be exclusive to Liquid.”
The relationship with its sister company will be key to Kwesé Play’s operations, Solovei predicts, and is one of the key factors that will see Kwesé succeed where others have failed.
“It’s a tough business and there are many aspects to putting together a successful service,” he explains. “From a technology side, you need to have a reliable network that delivers this content. This is not the US or a European market where you have lots of choices of content delivery networks at your fingertips. So we’ve had to go out and build our own CDN to support this.
“We were able to do this through our partnership with Liquid, and that means we have a reliable CDN that all of our content is delivered on. We have a number of nodes across Africa – west Africa, east Africa, and in the south. Those are three key points of presence that allow us to reliably deliver this content to our customers.”
So why should operators get involved? Well, it goes back to that Bill Gates line: “Content is king”, and right now, operators need more revenue. If operators “don’t have a content offering” then they are “going to find it very hard to go and sell services to consumers in the future”, says Solovei.
Bundling with data
“We’re rolling this out and bundling it with data propositions, so when consumers are making their decisions over which provider to go with, the operator that doesn’t have a content offering is going to be left disappointed. We’ve seen it in global markets, in the US, in the UK recently – with Sky Now and BT. These data propositions without content are very unappealing.”
More content means even more data usage, and Africa is already the fastest growing telecoms market. More than half a billion people across Africa now subscribe to mobile services, with the number expected to grow to 725 million by 2020.
Within that period, the monthly use of mobile data will also increase from 0.3GB to 4.3GB. Operators recorded data traffic growth of more than 50% in 2015, according to the GSMA.
Content, Solovei claims, will spur that on even more, ultimately justifying the capital expenditure telecoms operators in the region have splashed out to boost network coverage over the last few years.
“We’ve reached the point in time in the market where media and TV and telcos are really one,” he adds.
“It is just a matter of time until streaming technology overtakes the traditional delivery method. We’ve seen that happen a lot quicker with the introduction of video services. A consumer doesn’t really need a 100Mbps line in his home unless he’s streaming video. We’ve built these huge networks – the next revolution is how to get that core value into the consumer market,” he concludes.
So for African operators, content will be key. For Kwesé Play, the goal is to be the power behind the throne.