African Internet Effect – changing the way the continent does business

The African Internet Effect is rippling out and affecting everything it touches. The first shocks of this earthquake have been quite gentle but its power will build for two reasons.

– Firstly, the African “digital change” generation are between 18 and 30 years old. In the next 5 years as they get older, there will be a new tranche of “digital native” Africans. They will themselves move into positions of power and decision-making.
– Secondly, in the more advanced African markets 50 percent of phone users will have access to a smartphone or a smartphone-like feature phone. In other markets, a significant number of users will have smartphones.

Argon Telecom will offer a US$40 smartphone next year and all the talk is of when a US$30 smartphone will arrive.

There are two big clusters which will have an enormous impact over the next 5 years: film and TV and music. Operators still have problems implementing them but here is what has happened so far:

Film and TV: Online has reduced the barriers to market entry and there are now over 100 online film and TV platforms. Not all of these will survive but some will dig themselves significant niches by focusing on local content. A couple of examples that have had less airplay than others include Ghanaian film-maker Juliet Asante’s Mobilefliks and the soon-to-be launched Tango TV in Tanzania. Much of the talk at Capacity 2015 was about the lack of local content: local content is either already there or will follow.
Nigerian diaspora performer T Boy demonstrates what can be done with a talent for comedy and YouTube. 
Safaricom has appointed a broadcast content person to head up its TheBigBoxTV service.

Music: As with video on demand (VOD) platforms, there are now over 100 online music platforms jostling for attention, the larger of which include iROKING, Simfy and Spinlet. Local contender in Tanzania Sune Mushendwa spoke at Capacity 2015 and is one of the more interesting operations. In our report on music platforms we calculated that there were already 10 million users across the continent and that these numbers were set for considerable growth. However, these numbers are soft in that they are not always active users.
One of the biggest barriers to the expansion of these services is payment. This is a combination of mobile operators’ terms of trade, the lack of clear, easy-to-use systems and consumers trust. But that is not to say the numbers are not there.

E-Commerce: Both Jumia and its rival Konga in Nigeria each have 1 million customers. At the moment this is hybrid e-commerce: the customer orders online and pays cash on the doorstep for what he or she has ordered. But that will change.

Media: About the same number or more people read newspapers online than they do the print versions. According to a study conducted for the New Venture Fund, when asked what had changed most about media in the last 5 years, those interviewed said there was more media and there was the Internet.

Radio: Radio is Africa’s key medium because TV is not as widely accessible. Many mobile users already listen to an inbuilt radio on their mobile phone. The next step? Streamed radio. South Africa’s Iono.fm has already got a million talk radio programme streams in South Africa and will be expanding across Africa soon. Cyprien Josson is a Nigerian in France whose day job is teaching but his passion is Nollywood Radio which already has a significant audience.

Livestreaming: With bandwidth, Africa is now beginning to build businesses from livestreaming – something that would have been unthinkable only a few years ago.

Publishing: Conventional wisdom says that ‘Africans don’t read books’ – but Worldreader’s 125,000 active mobile readers offers tantalizing evidence that things are different. Kenyan TV writer Ndinda Kioka had her first short story published on an online site before appearing in a print short story collection that led to funding that will allow her to complete her first novel.

Art: Nobody ever thinks of art when they talk about online but there are now two online art galleries selling work made by Africans: South African, Ex-Googler Julie Taylor’s Guns and Rain and Senegalese Valerie Konde’s Pavilion 33.

Games: GamersNights in Kampala, Uganda is a group of multi-player computer gamers who have been helped by Liquid Telecom to expand the reach of their players’ network across East Africa. All over Africa, there are small pockets of gamers, most of whom play offline with pirated copies but might be persuaded at the right price by an online service.

Advertising: The shift to digital advertising is well under way as brands begin to realize the important of social media in general and Facebook in particular. This shift has created new business for everyone from the large digital agencies or smaller, independent agencies.

Source: Balancing Act Africa