Canal Plus takes off in Africa

The French Canal+ Group has taken 170,000 pay-TV subscribers in Francophone Africa during the first nine months of 2012.

Owned by the Paris-based Vivendi media group, Canal+ has returned to the French-speaking African countries after a 17-year absence to exploit an emerging market for pay TV across the continent, given expanding satellite capacity and innovative payment methods for poorer households. The Canal+ service will be available by satellite to 115 million people in the Francophone countries, including the Democratic Republic of the Congo, which, at 67 million, has a slightly higher population than France itself. Canal + is broadcasting an edited version of its domestic package, in Ku band, to 20 Francophone countries across central and western Africa.

Like everywhere else, premium rights are key to success, and Canal+ prepared the ground for anticipated rapid growth by acquiring French language rights to the UEFA Champions League and UEFA Europa League for 2012 to 2015 for the whole sub-Saharan region. Canal+ content will also earn revenue from the continent’s leading pay TV operator Multichoice, based in South Africa, which includes some of the material in its package.

MultiChoice, owned by the South African media conglomerate Napers, has so far enjoyed a virtual monopoly in sub Saharan Africa with its DStvDTH service, accounting for about 85 percent of the continent’s total pay TV subscriber base, according to UK analyst group Rethink Research. It was formed from the subscriber management branch of the M-Net Terrestrial pay TV operator, now broadcasting the full range of M-Net channels over satellite. MultiChoice also broadcasts over cellular networks to smart phones and laptops, and this is likely to grow alongside the satellite service given the rapid increase in mobile usage in the sub-Saharan region.

Multichoice expanded quickly after launch to reach 4.9 million subscribers by the end of 2010, but growth has since slowed down, with almost 6 million customers expected by the end of 2012. Further growth will be constrained by increasing competition, especially from Canal+, with content acquisition costs being driven up. The explosive growth in 2010 came through having exclusive rights in many countries to the FIFA World Cup in South Africa, but for the 2014 World Cup in Brazil will have to compete with Canal+ among others.

There are also uncertainties over the direction of pay-TV regulation in some of the countries. This regulatory factor has so far confined African pay TV largely to the sub-Saharan countries, with broadcasting having been state controlled in the northern so called Maghreb countries including Morocco, Algeria, Tunisia and Libya, at least before the Arab spring.

The only other significant pay-TV operator in Africa so far is Top TV, owned by On Digital Media of South Africa. Top TV began broadcasting in May 2010, and now has just over 300,000 customers, plus about 100,000 that have decoder boxes but whose service has been deactivated because users could not pay their monthly fee. Top TV has introduced a voucher scheme allowing users to pay their subs in the same way they do for electricity, by using cell phones to make one-off payments with no penalty for having to be reconnected. This highlights a growing trend in Africa to use cell phones for making payments associated with the accounts, exploiting the fast-growing mobile phone penetration, coupled with the fact many people still do not have bank accounts.