3Vision Insight - The Future of Digital TV in Sub-Saharan Africa
22 Sep 2014
Sub-Saharan Africa is becoming an increasingly interesting market for international companies from all sectors, with approximately 40 million TV households in a market of 150 million households. In our latest Insight we take a look at the opportunity, and how the key indicators in the region all point to a growth opportunity for television that in raw terms is likely to exceed other markets by a significant factor.
Population, TV and Pay TV households are projected to grow significantly, with all key indicators encouraging (urbanization, electrification, emerging middle-class, young working segments, technological innovation etc...).
Territories vary greatly in physical size, economic value, population and TV penetration, with the English language dominating in population terms, and French closely following.
High growth potential for TV, and projections of 50 million TV households by 2017, are encouraging media organisations to rethink their approach to the continent, along with other industries.
This August the US announced $33 billion of new investment in Africa - although they noted that some conditions for business need improving they also admitted that the US has been lagging behind China and Europe with investment in the region.
Across Sub-Saharan Africa 2013 estimates suggested 23% of TV households have Pay TV, dropping to only 15% of households if you exclude South Africa.
With global penetration nearer 60% growth is inevitable as digital switchover picks up pace and uptake of lower priced services increases. By way of comparison Latin America saw growth from 36% to almost 60% between 2008 and 2014.
Projections vary, but if Pay TV penetration reaches 40% by 2018 that translates to the addition of 10 million Pay TV households. For media organisations this is a significant number, and a level of growth that few other markets can offer.
The market used to be characterised by dominant players in each language focused on the top end of the market. Now the lower end of the market is getting crowded, with little space between competitors chasing this segment. Despite the region’s size over 90% Pay TV subscribers are still with the top three operators.
Unlike many other markets DStv as a dominant operator seems willing to sacrifice ARPU in order to grab the low-end of the market with lower priced GOtv.
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