First, there was the Facebook paper that sent global media houses into panic mode as the access to their audience and resultant revenue streams came under threat from a company that has hitherto been considered an ally, driving readership through network effects. Locally, the switch from analogue to digital transmission has taken residence in the courts with the three musketeers (who control 87% TV market share and 80% radio audiences) managing to stay on air through a series of court decisions in their favor. The unfortunate prognosis of the events unfolding, paints a picture of a reactive and ill-informed strategy by the stakeholders of the African Digital Network whose take on co-opetition seems to be stalling the migration up and until they all individually get a proper sense of direction in-house. The play by the Kenya Broadcasting Corporation and PANG was clear and it is surprising that the three biggest media houses as measured by both reach and revenue chose to sit in the sidelines almost as if betting on clout to maintain status quo.
As of Monday, 12th January…
A consortium made up of Kenya’s three leading media houses has placed orders to import digital TV set-top boxes that are set to retail for as low as Sh 2,000 each.The Internet-ready set-top boxes are expected to arrive in the country in the next three weeks.The Nation Media Group (NMG), Royal Media Services (RMS) and Standard Group (SG) have placed orders for 150,000 of the devices, which are set to be the cheapest free-to-air digital converters in the market.“These set-top boxes will be quite different from what is already there in the market. The devices will be sold at a one-off price of between Sh2,000 and Sh2,500,” said the NMG board chairman Wilfred Kiboro. The three companies, under the Africa Digital Network (ADN) consortium, also disclosed that a million more of the devices are expected end of March.
The only problem even as their court battle with the regulator – the Communications Authority of Kenya continues and as they find their digital footing, is that a bolder set of competitors have entered the fray and could in the space of a few months make a big dent on the cash cows that traditional media have enjoyed. The new kids on the media block are the mobile network operators with both the infrastructure and networks to make digital migration ala set top box and grainy low quality content as evidenced by the mad rush to lock down channels by speculators look like a red herring. In a nutshell, this is how it will go down.
Content is king and for as long as there is demand, getting cheap rights to telenovelas from South America or Asia remains on the books, with mobile operators also having the option of pulling a Netflix move and sponsoring the creation of their own House of Cards; the capital is not an issue.
Access and Service Experience
This is where traditional media have always hidden behind math, always factoring their reach, which informs their rate cards. The push to smart enough devices and the rollout of even faster mobile network technologies means that there is a direct and measurable audience in the millions with the ability for service customization on a level that traditional players, even with the set top box model can only dream of.
Service personalization also means that the billing can be dynamic and differentiated, even with bundling. Mobile money and url based billing would allow for maximum possible monetization of all inventory, giving a higher return per license even on what could have been earlier considered unsustainable price points. The business model will be supported by a wider base of on-boarded advertisers as audiences can be segmented better and instead of having say 1,000 medium to large advertisers it becomes possible to create value for over 100,000 businesses.
Adapt or die.