Global content giants go local to war for audiences

Technology

Global content giants go local to war for audiences


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The UN General Assembly named 2021 the year of the creative economy for sustainable development. Closer home, the African

The Union declared it as the Year of Arts, Culture and Heritage.

The announcements came at an opportune time when the creative industry in Kenya and the rest of the continent is flourishing out of an accelerated uptake of technology which has brought more variety to audiences, which in turn has translated into more revenue for the sector.

However, there have been concerns that Africa is still missing out on its fair share of billions of shillings in the content sector.

“Globally, cultural and creative industries (CCIs) are estimated to generate about Sh265 trillion annually (three percent of global GDP) and to employ 30 million people worldwide,” Unesco said in a recent report.

“However, Africa and the Middle East only represent about three per cent (Sh684 billion) of this global trade. Given the dynamism and global cultural influence of Africa’s creative sectors, this represents a major untapped opportunity for African countries seeking to diversify their economies. “

Against this backdrop, local and international production companies are exploring new business models and value propositions to secure their growing audiences in the face of fierce competition.

Kenya has been one of the countries on the African continent where this flurry of activity in the sector has gone into overdrive, showing early indications of the direction the industry is heading in the region.

Earlier this year, Netflix signed a two-year deal with the Ministry of ICT to fund training opportunities for young filmmakers as well as the acquisition of local content from Kenyan producers.

Under the agreement, Sh10 million will fund scholarships for 30 beneficiaries covering tuition, living expenses, teaching materials and stipend through the Kenya Film School and the African Digital Media Institute.

Another Sh20 million has been allocated for all-inclusive scholarships for aspiring creatives to study at other Kenyan institutions that provide film and television studios.

Streaming platforms such as Netflix and Disney Plus, which also announced the launch of operations in several African countries, today feel the pressure to direct investments to produce local content for the local audience.

MultiChoice, Africa’s largest entertainment company and a first mover in the digital television sector, has gradually increased the portion of its budget that goes to local content productions.

Kenya accounts for 10 percent of MultiChoice’s subscription revenue from the rest of the world, according to its annual report. With 11.9 million subscribers, the company’s rest of the world business segment accounts for 32 percent of MultiChoice’s group revenue, which last year was 336.1 billion.

In 2020, the company introduced its first Kenyan original series, making it the fourth country, along with Nigeria, Ghana and South Africa, to have a specific localized version of Showmax.

A combination of traditional investment and skills development initiatives such as education, film festivals and competitions are expected to improve the capacity of local film industries.

“Showmax, MultiChoice’s VOD service, has also made progress in Kenya. The Kenyan video and OTT market, which includes physical video and digital video, offers growth potential but remains small in volume and revenue,” Unesco said in its report.

However, it notes that although the quality of education has improved dramatically across the board, a drawback is the high number of graduates in relation to vacancies in the sector.

This has often pushed companies to invest their resources in training and capacity building to complement the teaching provided by film schools.

MultiChoice, for example, directly and indirectly contributed an estimated Sh67.7 billion to the Kenyan economy between 2016 and 2019. This includes Sh25 billion in investment through employees, training, taxes and regulatory fees.

“MultiChoice’s role in the development of the local content industry through its local channels, SuperSport and infrastructure investments contributes a total of Sh16 billion,” the firm said in its latest social impact investment report.

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