Advancing the value chain to enable stakeholder wide prosperity:

The current and projected development of the Mobile Entertainment ecosystem within Africa

Russell Southwood, CEO, Balancing ActMobile Entertainment Africa, 2011

Start with the business model

• Lots of marketing hype from dotco’s but only really two models

• You (the user) pays for it (service and transaction charges)• Someone else (advertiser,

sponsor or mobile co) pays for it

The medium is the message - mobile as media

Radio TV

Newspap

ers

Mobile

Internet

0%

20%

40%

60%

80%

100%

120%

GhanaLuanda

10-15% use to get news and info in last week.

Ghana Internet use:Watch/download videos (15%); Play games (14%); Visit Networking sites (15%)

Ghana mobile use: 44% did notUse SMS (illiteracy) Chad (26%Literacy)

Sources: Various

Weekly Media Reach

What is the nature of the mobile as medium?

Mobile Internet Use

Downloading music World News Social Networking (e.g. Facebook or Orkut)

Soccer (football) News and Scores

E-mail Search0%

10%

20%

30%

40%

50%

60%

70%

80%

73%

55%

30%

43%

37%

32%

70%

50%48%

45%

53%56%55%

47%

70%

57%

69%

62%

75%

33%

62%

37%

52%

57%

Angola Cameroon Nigeria Kenya

% R

espo

nden

ts

Chart source: OnDevice Research and Balancing Act, January 2011

Africa’s fragmenting media landscape

Category Old landscape (2000) New “fast lane” landscape (2013)

% of households with more than one TV

<1% 5-8%

Number of Free To Air TV channels

1-3 10-15

Number of radio stations 2-5 50-150

VCR/DVR/PVR <5% 5-20%

Broadband access as a % of TV households

n/a 3-10%

Social networking n/a 2-4 million

Internet-enabled phones >2% 45%

Smart phones 0% 5-10%

• Key 18-35 demographic is interested in immediacy and interactivity (worlds they feelthey are part of creating

Facebook users – Sub-Saharan AfricaDoubling over7 months

Kenya – Mxit has60,000 usersWithout anyMarketing

Twitter: 150,000 inKenya and 1 million in SA

Ke vs TZ contrast

Country August 2010 April 2011

South Africa 3.1 million 3.8 million

Nigeria 1.7 million 2.9 million

Kenya 864,760 1.03 million

Ghana 621,000 906,540

Senegal 299,340 447,840

Uganda 196,000 280,600

Tanzania 141,580 259,120

Botswana 86,060 112,180

Angola 63,860 112,180

Zambia 56,640 117,520

Malawi 46,660 79,040

Namibia 15,100 127,260

Sierra Leone 8,780 34,100

Local content exists

Local sites in top 50: Ghana (10), Kenya (9),Uganda (8) and Tanzania (6)

Many different platforms

• SMS – Still the largest platform. Aggregators and the arms-length relationship. Limitations for content-creators & advertisers of limited no of characters in b/w

• Mobile Internet – Increasing in size but still a relatively small sub-set of overall

• Apps – Outside of SA, relatively tiny. The it’s a sub-set of a sub-set for different platforms (3-5?)

• Mobile radio – High levels of usage but not much attention• Mobile TV – Switch from DVB-H to DVB-T2. But still not

much traction. On 3G handsets? DStv’s latest Wi-Fi product

Show me the money – What’s the deal?

• SMS – 60/40 split in favour of content producers. One large operator 80/20. A very few 50/50. This is strangling content creation. Needs to be in Ms to make money.

• Mobile Internet – Has to be advertising supported. Coming with social media but it lags behind the usage figures

• Apps – MTN: 4.6 million (23%) 3G devices and 2.6 million (13%)smartphones. Vodacom SA 63% of its subscribers have data-enabled devices, of which 10% are smart-phones. SA tablet market in mid 2011, 70,000-80,000. But in Huawei has sold 350,000 Android-enabled IDEOS phones so maybe c 1m. 70/30 in favour of content provider.

• Mobile radio –No content or business model• Mobile TV – Usually spin-off of other rights or small amount as separate

rights

The Missing Pieces in the jigsaw

• Missing driver: Mobile operators –Are you in content or not? Do you really understand the key market? Do you have people who do? Are you helping breed an ecosystem or not?

• Missing local content piece: Large news sites but almost entertainment (Daily Mail and Sun). Football and music but not at scale. Comedy? Edutainment?

• Missing content delivery platform – The equivalent of iTunes but delivering across multiple platforms

• Missing geography piece – No continent-wide content for advertisers to place alongside. No sense of being able to advertise by territory

The commercial break

• Mobile Apps For Africa Strategies to Make Sense of Free and Paid Apps

• A Balancing Act Report (July 2011)• Consultancy and research• Contact: info@balancingact-africa.com