Securing the Revenues of Africa’s Most Ambitious Entertainment Provider: Q&A with Richard Alden
Africa is one of the final frontiers when it comes to digital TV, holding much promise for pay TV operators, broadcasters and technology vendors alike. At this year’s AfricaCast, it was more evident than ever, that competition has intensified over the past year, driving services providers to leverage the best networks available to extend services beyond the living room and add interactivity wherever possible.
During our lively Multi-network Forum at AfricaCast 2014, I was lucky to interview Richard Alden, Wananchi Group CEO who explained how the company’s popular Zuku TV service is gaining market share by fulfilling the demand for high-quality, affordable entertainment throughout East Africa. I’ve created a summary to get a glimpse of Wananchi’s network strategy.
Steve Christian: What do you see as the key areas of opportunity for digital TV offerings in African markets over the next 3-5 years?
Richard Alden: We have two, core Zuku services, the first of which is for the basic pay-TV market, which is attracting more population from free to basic, affordable pay TV services. The other is our cable service, which is most typically used for OTT (over-the-top) streaming and is where we will over time evolve to offer value-added services such as video on demand.
Steve Christian: What do you regard as the key competitive positioning of Wananchi and the Zuku service offerings?
Richard Alden: Adding OTT services is not the only answer. I don’t believe that operators can or should “wall people in” (with OTT services). If they want to go to other OTT services such as Netflix or free TV services they will. At Zuku, it is about content differentiation, about creating high-quality programs and packaging them to ensure the brand value. Zuku is seen as the “challenger brand” – unique and really talking to the consumer (Zuku = citizen in Swahili). We attract the middle market – winning hearts and minds by offering affordable, quality services. We are also allowing subscribers to pre-pay for TV service so they can cancel and reactivate at any point, which is very attractive in Africa.
Our biggest challenge for our DTH business is competing against DTT services as digital migration rolls out and people become more aware of multi-channel choice available to them. Finally, the people of East Africa have more than just free TV stations to watch and our challenge is to attract new subscribers to our DTH Zuku service when they are thinking of DTT. We are also taking advantage of transition of TV market and the socio-economic changes of the way people are watching TV.
Steve Christian: To what extent is technology a useful tool in enabling a competitive advantage?
Richard Alden: Our satellite transponder signal gives us immense reach and the ability to deliver a high-quality TV services in areas such as rural Uganda where DTT is unavailable and the FTA signal is very poor. It is too early for high-tech service such as Personal Video Recording; however, we hope to be able to deliver these services in the future.
Importantly, the technology needs to be cost effective and allow savings where possible. For instance we uplink most of our channels ourselves from Nairobi and deliver them across the SES 5 satellite. We also work closely with out technology providers, such as Verimatrix, to keep our prices affordable, while offering an optimum quality of service. There has been wide-ranging criticism around DTH operators who have “burnt their brands” because quality of service is so bad and we have learned from that.
Watch the video recording from the Forum here