Nigeria
Market overview
I have spent some time to put this market survey together. Its not a very comprehensive document in a country where obtaining data is very difficult. Using reliable sources available, I have attempted to bridge some of the information gap, and provide some background to where we are heading and the metrics for an overview of the media industry in Nigeria. Please do not regard this document as a holistic and accurate document, but rather a painting that provides some texture to the media market in Nigeria.
MARKET OPPORTUNITY
Technology and the consumer choice it has engendered are pushing the demand for media and entertainment products towards a single global market. On the digital platform this is ever so apparent. From Mobile phones, Internet, broad band, satellite and 3 screen technology, the demand for instant, transmedia and media rich content is providing new opportunities and revenues for those who position themselves properly, as the success of a single global marketplace enabled by technology creates the Holy Grail for the entertainment industry – one platform for all products for all the consumers in the world. For the time being, demand for TV, film and music content is being driven by new, “Well-financed competitors to broadcast, satellite and cable operators – fixed and mobile telecommunication operators and the major media/content aggregators”.
Market – Size & Growth Prospects
Developing countries account for an increasing share of global exports in cultural goods – from $4.2 billion and 11.2% in 1994 to $11.6 billion and 21.2% by 2002. This growth was particularly pronounced for audio-visual media, where developing countries’ share rose to 44.6% in 2002 from 27.6% in 1994, and to more than 53.5% in 2009.
Growth in consumption of audio-visual media & content in developing countries
China (including Hong Kong) and India, who account for a large share of this trade, are also experiencing booms in their domestic entertainment and media markets. The Chinese music market is growing at 30% a year, while the Indian entertainment market is growing at 20% annually, led by television broadcasting and internet consumption of content.
The Nigerian marketplace offers similarly compelling growth prospects. For players interested in entertainment and media on and from the African continent, Nigeria is key to conquering Africa as it has Africa’s largest population and strongly youth-skewed Demographics. Nigeria has a population of approximately 160 Million with around 68% of the population between the ages of 15 and 25 years old; an economy anticipated to grow at a 6% or higher rate over the next decade and a growing
Consumer class that advertisers are eager to reach. The growth of pan-African brands is also driving the demand for content to complement marketing and advertising campaigns.
Apart from its strong demand base, Nigeria generates film, music and entertainment content that is popular across the continent and in Europe and the Americas. However, the country’s entertainment and media businesses are fragmented and poorly organized and financed, unable to stimulate and meet domestic, much less continental or international, demand. Key constraints to the sector’s growth and development include financing, domestic and international distribution, and the dearth of technical and creative training. As a result, most players in the Nigerian entertainment and media have stayed at the artisan level, unable to muster the depth and breadth necessary to capitalize on continental and global opportunities. This confluence of factors presents a unique opportunity for to leverage domestic demand and consolidate content creation and marketing power to address the immense new international opportunities on the horizon. It is this opportunity that Hypnotic Media intends to leverage upon and exploit for the benefit of its owners and shareholders.
SERVICES IN NIGERIA
There are 3 main vendors of DTT in Nigeria:
– Multichoice DSTV – Entrenched market leader that has been doing business in Nigeria for more than 20 years
– Star Times with N1.2m Subscribers – established 3 years ago
– Go TV with 298,900 Subscribers – established 2012
DSTV provides a Cable TV service across Nigeria via Satellite and presently claims to have less than 1m subscribers. However, it is commonly felt that due to lack of monitoring by Government, DSTV in Nigeria is declaring less than actual figures for tax purposes. The actual figures are thought to be in the region of more than 3 million.
There are more than 48 TV stations across Nigeria. The Government owned Network NTA is managed as a Public Broadcaster. However, NTA has been unable to provide any engaging content and is seen as the Government mouthpiece, and very unreliable. There are 2 other networks AIT and Silverbird but these are seen only in some regions and not across all the country. In total the viewership of DTH in Nigeria is in the region of 119 Million Nigerians.
OTT in its proper form does not exist in Nigeria. There is great interest in developing this medium and many companies presently providing Internet services are looking at these opportunities. Some have invested some monies prospecting, but no major launch of full OTT services have occurred in Nigeria in the past 5 years.
MMDS Broadcasting in Nigeria was also very popular, however many of the companies that were afforded licenses have in the past years folded up due to the advancement of better technology and inability to compete in the area of entertaining content, reliable distribution and reception modes.
Nigerian telecommunications company MTN and Multichoice Nigeria has also officially launched Mobile Television. The service using DVB-H technology is transmitted on the MTN network. Nigeria began testing the DVB-H service in Abuja during September 2007 extending the service to Lagos later. Free-to-air access was allowed in both locations until December 2007 when conditional access was enabled. A bouquet of 10 channels spanning movies including the immensely popular Africa magic channel, news, sports and children’s programs (cartoons) are available to customers who subscribe to the new service which is called DStv on the MTN network. However, this service has not proved popular and DSTV no longer promote this service.
StarTimes, a Chinese service in partnership with NTA has launched DVB-T2 technology in Nigeria and other African countries. DVB-T2 technology to provides a wider range of channels and sharper images. GOtv, owned by DSTV has also launched their own a pay Digital Video Broadcast (DVB-T2) technology as the Digital Terrestrial Television (DTT) service. GOtv use the latest DVB-T2 standard leapfrogging the outdated T1 system that is still being utilized by some pay television operators to launch digital services worldwide.
AVERAGE CONSUMPTION OF PAY TV/ AND NON-PAY TV IN NIGERIA PER SUBSCRIBER PER DAY
Research shows that the consumption pattern of the average Nigerian TV Viewer is as follows:
| Weekdays | Weekends
|
|
| Average hours of TV the typical Nigerian Pay -TV subscriber consumes per day
|
Worker – 3 hours
Non-worker – 7 hours
|
6 – 8 hours
|
| Non Pay -TV subscriber
|
6-8 hours | 10-12 hours |
ALTERNATIVE FORMS OF ENTERTAINMENT CONSUMPTION IN NIGERIA
The country’s entertainment and media businesses are fragmented and poorly organised and financed, unable to stimulate and meet domestic demand. The number of Cinema Screens in Nigeria is yet to Number 200 for a population of a 160 Million people. Thus, the consumption of entertainment products is structured as follows:
– Free to Air TV
– Cable/Pay TV
– DVD
– Cinema – Low penetration of screens across the country
– Internet and Web Based entertainment Products (Low Penetration)
– Games (X Box, Playstation etc.)
– Music Concerts/Comedy Shows
– Theatre
AVERAGE REVENUE PER SUBSCRIBER
Rates for set up and subscription are as follows for existing platforms
DSTV – Satellite Cable Service
Set top box Purchase – From USD200 for SD Set top Box to USD600 for a HD PVR Set top Box
Monthly Subscription – USD30 standard bouquet to USD100 for full bouquet
DTT
Star Times/Go TV – Set Top Box Purchase – From USD60 – USD90 for SD Set top Box
Monthly Subscription – USD40 – USD60
Free to Home
Though a regime exists for the payment of TV licenses, this is ineffective and difficult to enforce.
STATE OF MOVIE THEATRES IN NIGERIA
Not more than 200 screen exist in Nigeria
INTERNATIONAL BOX OFFICE ANALYTICS OF NIGERIA MARKET
| Box office analysis | 10 biggest films:
1 Marvel The Avengers 2 The Dark Knight Rises 3 Skyfall 4 Argo 5 Django 6 Think like a man 7 Flight 8 Taken 2 9 Safe House 10 Mission Impossible 4
|
Top 5 for Children and Teens:
1 The Hobbit – An unexpected journey 2 The Twilight Saga – Breaking Dawn Brave 3 Madagascar 3 4 Wreck it Ralph 5 MIB3 6 Dr Seuss the Lorax 7 Hotel Transylvania 8 Despicable Me 9 Ice Age – continental Drift
|
5 Surprises:
1 ABCD – Bollywood movies 2 |
5 flops:
1 John Carter 2 Battleship Galactica 3 Cowboys and Aliens 4 Dredd
|
| General cost relating to a movie night out for 1 person | Parking: N200
Movies Cost: N1500 Refreshment: N1500
Total cost: N3200/£13.45/$20.26
|
|||
| 5 big sports events | 1 Barclays EPL, UEFA, World Cup, AFCON
2 Tennis (Wimbledon, US Open), 3 F1 4 Basketball 5 Cricket 6 Olympic 7 Super bowl.
|
|||
| List the 10 most popular: | Actors:
1 Brad Pitt 2 Jonny Depp 3 Leonardo DiCaprio 4 Samuel L Jackson 5 Zac Efron 6 Will Smith 7 Bradley Cooper 8 Eddie Murphy Tom Cruise 9 Robert Pattison 10 Robert DeNiro
|
Actresses:
|
Popstars:
|
|
| 20 most popular TV show |
|
|
||
| 20 most popular kids shows |
|
|
||
| 5 most popular sites |
|
|||
CROSS MARKETING STRUCTURES OPPORTUNITIES
Current opportunities and structures for cross marketing of content through retailerships and telecommunication companies are in its early stages, mainly due to a very informal and unstructured distribution system. However, there are opportunities opening up in the telecommunication sector, where new entrants have established channels via mobile access (though has not proved commercially viable as a business model as of yet).
With a view to what is workable in the market place, one should be targeting business-to-business solutions where such cross marketing opportunities and solutions make commercial sense.
DVD & HOME ENTERTAINMENT
There are approximately 6,900,000 TV sets. As of 2000, the year for which statistics are currently available, Nigeria has roughly 750,000 personal computers. Based on current research available data suggests that Nigeria has now more than 11 Million TV sets, 60 Million Mobile Phones, 3.5 Million PC’s, Laptops and tablets. Obviously the penetration level of the Mobile phone from almost zero in 2000 to more than 60 Million in 2013 is an indication of the high penetration of Mobile phones. In addition the distribution of home entertainment products (DVD, Blue Ray) in Nigeria, is largely informal, mainly pirated and difficult to provide statistics other than you can be sure of finding in most homes a pirated DVD or two.
NUMBER OF DEVICES IN USE IN NIGERIA
DVD/BLUE RAY PENETRATION & RENTALS IN NIGERIAN MARKET SPACE
Details, facts and figures are not available regarding this question. However, it is clear that penetration is there, but mostly pirated content. This also applies to Game consoles, which are mostly a middle class targeted application. However, again in terms of population the penetration would also be low.
TABLET & SMART TV PENETRATION IN NIGERIA
Facts Not available
RETAIL PRICE FOR HOME MEDIA
Almost all media retailed in Nigeria is pirated, however a few outlets do offer original content, but this is rare:
Original DVD: USD4.00
Pirated DVD: Between USD10 – 20
Original CD – USD2.00
Pirated CD – USD10 – 20
INTERNET PENETRATION
| Rank | Country | Internet
Users |
Percentage of
Population |
Year |
| 9 | United Kingdom | 51,412,657 | 82.00 | 2011 |
| 10 | Nigeria | 47,143,356 | 28.43 | 2011 |
BROADBAND PENETRATION AND SPEED
| Rank | Country or territory | Fixed broadband
Subscriptions |
Percentage of
Population |
Year | |
| 90 | Nigeria | 99,108 | 0.06 | 2010 | |
VIDEO CONTENT AVAILABLE ON WEB
There are no restrictions in Nigeria regarding content available on the web. In real terms everything is able if you have the Internet speeds to download, stream and make payment for content that requires payment. With the introduction of international credit/debit cards such a Visa, MasterCard etc. Nigerians have a window of opportunity to view any video content available around the world on the web.
THE NIGERIAN MOBILE MARKET
Nigeria has overtaken South Africa to become the continent’s largest mobile market with now over 90 million subscribers, and yet market penetration stands at only around 60% in early 2012. Subscriber growth had slowed significantly during the global economic crisis, re-accelerated in 2010 but then slowed again in 2011. Much of the remaining addressable market is in the country’s rural areas where network rollouts and operations are expensive. This in combination with declining ARPU levels is forcing the networks to streamline their operations and to develop new revenue streams from services such as third generation (3G) mobile broadband, mobile payments/banking, and others. At the same time the operators are rolling out national fiber backbone networks to support the ever-increasing demand for bandwidth. At least two operators are rolling out fourth generation (4G) LTE networks.
TABLET PENETRATION
Data not available.
PC AND LAPTOP PENETRATION
A new report by Nigeria’s National Bureau of Statistics (NBS) has revealed that the country has a 4.5 percent personal computer (PC) penetration.
BusinessDay, a local newspaper, reported that the data was revealed in a survey recently conducted under the “Annual Socio-Economic Report: Access to Information and Communication Technology (ICT)” by the NBS and Central Bank of Nigeria (CBN).
Despite the significant growth experienced in the country’s telecom market which according to the Nigerian Communications Commission (NCC), currently has over 90 million active phone connections, the survey stated that over 95 percent of Nigerians lack access to a PC or the internet.
Based on the report, Nigeria, which has a populace of over 160 million peoples, has a national average total Internet access of 4.5 percent while actual PC ownership stands at 0.9 percent.
STATE OF E-COMMERCE
With the emerging growth in e-commerce, Nigeria is fast-approaching an increase in economic growth; a major player in the e-commerce industry, the Internet has no doubt come to stay with its amazing possibilities.
Nigeria recorded an estimated 25 per cent growth in online shopping with revenues valued at N62.4 million in 2011, which is N12.5 billion increase from 2010 as reported by Euromonitor international, a global market research organization.
With over 160 million people, Nigeria stands a great chance to become the next e-commerce hub of Africa. Online shopping has changed the way customers and retailers think. Customers are constantly seeking to comfortably shop endlessly while retailers are constantly seeking new paths to growth. Nigeria’s prospects for online retail success are closely related to how many people use the Internet and how many are comfortable purchasing products online in terms of security and customer satisfaction.
Obstacles to the growth of e-commerce in Nigeria are lack of basic infrastructure like steady power supply, good roads as well as limited access to telecommunication infrastructure and high cost of Internet, hinder the growth of e-commerce in Nigeria.
There is also a need for further enlightenment as t business of e-commerce, not forgetting the menace of cyber-crime associated with our society. The electronic way of doing business was a new concept in Nigeria. Most people are used to buying and selling face-to face were by they see and touch (physically) what they want, negotiate on best deals, and buy.
The government, experts in the e-commerce industry, online merchants, banks and all other stakeholders need to work together and collaborate, in order to avoid obstacles and benefit the nations from the outputs of e-commerce.
AVAILABILITY OF ON-LINE MEDIA STORES
There are several major initiatives in this area. They are as follows:
OVERVIEW OF LOCAL TV & FILM INDUSTRY
Television and Film production businesses create scripted and non-scripted content. Scripted content is drama, comedy and soap operas for which writers pre-determine the script and structure. Non-scripted programmes comprise reality entertainment, game shows and talent shows in which the main events within the programme are not pre-determined by writers and producers but are the result of actual events occurring during the show.
Generally, a television, satellite or cable network will license a specified number of episodes of a show for exhibition on their network during the license period. In Nigeria this does not happen because all broadcasters do is retail airtime. So producers in Nigeria must be conversant not only with communication, advertising and marketing strategies, they must also be creative and able to translate marketing goals of the sponsors to creative programming and formats that deliver their marketing objectives. All other distribution rights, including international and off-network syndication rights, are typically retained by the production company, or if sponsored retained and exercised by the sponsoring Company.
Production companies can also enter joint-venture arrangements with international production companies such as Endemol, Sony Pictures, Marc Burnett Productions to mention a few for joint production of television programming for the Nigeria and African market. Pursuant to the terms of the joint venture agreements, the joint ventures are the exclusive vehicle through which either party may produce television programmes for the Nigeria market. The joint venture normally provide for split of all profits.
Production companies also produce feature films and made-for-television movies both independently and under co-financing arrangements with others. Or, also acquires rights in, and distributes, completed films produced and financed by others.
Revenue derives generally from licensing filmed entertainment product to broadcasters, sponsors and other aggregators. In addition revenue can be earned from purchases of DVDs of filmed entertainment by wholesale or retail distributors and direct retailing by the production company through television direct marketing, its website, “street teams” and at promotional events.
Incremental revenue can also be derived through licensing and merchandising arrangements. These licensing and merchandising arrangements enable the Company to exploits its film and television properties and characters by entering into licensing agreements for merchandising, literary publishing, wireless, games, themed entertainment and promotional and advertising tie-ins.
The challenges faced by the sector in Nigeria are multi-faceted. Key amongst them are summarized below.
– The current environment is plagued by copyright infringement otherwise known as piracy and this is a disincentive to investment in content creation.
– There is a dearth of human capital in the creative and production sector of the industry.
– There is a shortage of platforms for the exploitation of the content before it is available to making the cost of acquisition unduly high.
– Access to funds for the creation and acquisition of content is challenging because of the low level of awareness of the potentials of the creative industry, by the financial sector.
– Foreign direct investment in the creative industry is low as a consequence of the overall investment climate in the country. However, those who have shown risk for appetite in this area, and have show commitment and ability to sustain their investment have reaped immense profit and capital. A good example is MNET followed by the Chinese through STARTIMES.
MAIN PRODUCERS
Film Production:
Jetta Amata
Kunle Afolayon
Tunde Kelani
Teco Benson
Faruk Lasaki
Steve Ghokas
Chineze Anyaene
Mahmood Alli Balogun
Stephanie Okereke
Lonzo Nwekwe
Michelle Bello
Newton Aduaka
Ejim Onyekachi
Lancelot Oduwa Imaseun
TV PRODUCERS
IBST Limited
Aderemi Ogunpitan
Jungle Filmworks
Amaka Igwe
Greg Odutayo
Femi Odugbemi
Niji Akanni
Wale Adenuga
Femi Oduniyi
Ultima Limited
Osmi TV
Steve Ojo
FILM & TV PRODUCTION FINANCING AND ECONOMICS
There are 3 major areas through which financing can be raised for a film project. They are as follows:
- Project Initiator: Production Companies or producers make cash investment into their movie project.
- The Investor: Funds raised can either be equity or debt investment. The equity investors acquire a share in the film potential profit while the debt investor earn interest at an ongoing rate or fixed mark-up.
- Project catalysts: Can be categorized as sponsor’s desire to promote investment in a country or region. For instance in Nigeria some state that may want to promote tourism in their region can sponsor movie projects.
Challenges facing the industry: Generally-raising funds for any type of project is usually challenging and not just limited to film/TV project financing. The Nollywood industry is faced with this challenge as the availability of funds affects the production quality of any movie. In 2010 the Federal Government announced its decision to float a $200 million revolving loan scheme for the industry, which can be accessed through the Nigerian Export and Import Bank (NEXIM). Only one Nigerian producer, Tony Abulu, has been able to access the fund through the NEXIM for the production of “Doctor Bello”.
Major challenges facing the industry in raising adequate finance from investors includes
- High level of financial risk: This is as a result of the high capital requirement for any movie
Production. Consequently, it makes financing any movie a big challenge for most production companies. Production companies do not possess the financial resources to self-finance its film projects as they depend on outside sources of finance to keep a project going.
- Uncertainty of cash flow: There is a high degree of uncertainty in predicting the level of cash flow that a movie generates and as a result investors are skeptical in funding movie projects. Investors do not know for certain if a movie would generate income/ revenues or not. This uncertainty is present from the inception of per-production stage until the movie gets to the audience. A movie generates income /revenue from cinema release (Box office), advert placements and DVD release.
- Inadequate project development and business planning: Most production companies and producers do not have the right business plan for their movies; consequently, it affects accessing funds for movie projects.
- Piracy and Government support: Piracy has a large effect on revenues generated from any movie. This affects raising sufficient funds, as investors are not attracted to invest in movie projects. Also government needs to do more by putting in place structures that would help to combat piracy in Nigeria.
- Low level of technical expertise: This affects the quality of movies, which in turn affects the revenue generated from any movie.
Poor understanding of funding requirement and process: Most movie production outlet have a poor understanding of the funding process. In order to access funds from investors, movies need to be developed as projects that are bankable. Such a move project must be economically, technologically, socially and financially feasible.
LOCAL FILM DISTRIBUTION, REGULATION & PIRACY
There has been no formal film distribution structure in Nigeria in the last twenty years. The structure which exists in societies with a fully developed film industry whereby the commercial lifespan of a film begins with a box office or cinema release, followed by a video release, then broadcast on fee-paying television, before ending up on public television, does not exist in Nigeria.
Widespread pirating of foreign and domestic videotapes discourages the entry of licensed distributors. The distribution of the locally produced video film is currently carried out mainly in three big cities—Lagos, Onitsha and Aba. According to the system in place, the DVD’s are taken straight from the producer to the sellers, on a ‘sale or return’ basis. This is a system subject to abuse. The producers allege that the works are usually pirated, leading to low sales of the original copies. The traders as unsold then return many of these original copies. Films are also sold in other cities, distinct from those mentioned above, but the proceeds mostly go to pirates. About half of the revenue from the industry is supposedly lost as a result of the poor distribution network.
Piracy is a serious problem for the Nigerian video filmmakers. The Copyright Commission of the country has carried out various raids in the bid to fight this problem. However, it has been accused of going after only the small fry while leaving the kingpins untouched. It is notable that pirating of the Nigerian video films is not limited to the country itself. “International pirating of films is rampant. The Motion Picture Association of America estimates that more than 20 million pirated videodiscs, and 4.5 million pirated videotapes, were seized in 2000. Such pirating violates the international laws that protect copyrighted works. But intellectual property law experts noted that the pirating of Nigerian films will probably continue, in part because the filmmakers can’t afford the high legal costs of fighting it.
What would ordinarily have been a key distribution outlet, the cinema, fell into a decline in the country due to various reasons. These reasons include the economic decline and a state of insecurity, which made people less, inclined to spend time out of their homes. Most cinema houses in that period fell into disuse or were put to other uses.
However, with the improved economy and the changes in government policy, there has been a resurgence of interest in the establishment of cinema houses. Multiplex cinema house are already in operation in Lagos, Abuja and Port Harcourt, and it is expected that by the year 2008 about fifty more would have been opened all over country. Furthermore, given the economic potential of the industry, banks and other key financial institutions have expressed a lot of interest in investing in that sector.
The National Film and Video Censors Board (NFVCB) is the national regulatory agency empowered by its enabling laws to control and monitor all motion pictures distribution, exhibition and marketing. It was set up in 1993 to regulate the film and video industry in Nigeria. Up till fairly recently, the Board had focused most of its activity on the censorship and classification of films and videos. The role of the government, thus, in regulating the film industry has been extremely limited (some people have attributed some of the success of the industry to this fact). However, the Board is now set to play a bigger role in the regulation of the film industry. Through what it calls the “Nigeria in the Movies” project, the NFVCB has now introduced a new distribution framework policy as a means of regulating the market and protecting the industry. It is the aim of the Board to strive to put in place solutions to the problems listed above.
The initiative of the NFVCB consists of a strategic intervention through the implantation of enforceable standards in the film distribution system. According to the board, the key objective is to provide durable and commercially-viable structures, which will be acceptable both locally and internationally to the industry and potential investors alike, and having the required capacity to substantially meet the financial needs of the industry to engender self-sustenance, and also meeting all the requirements of being integrated into the country’s main organized private sector.
The new policy of the NFVCB has created a structure which regulates the categories and types of distributors, lays down guidelines for registration and licensing of distributors (for which certain fees are expected to be paid), and specifies the types of distribution rights which distributors at the various levels will possess as well as the controls to ensure that these rights are protected. The new policy also indicates the features of what would be considered a valid distribution contract, which, among other things, makes it mandatory to register the film/video as an intellectual property. One of the innovations of the policy concerns production financing and the protection, which it seeks to give the financier and the rights owners of films/videos.
The NFVCB policy goes ahead to detail the process of the release of films and the establishment of distribution proprietary rights. In this process, licensed distributors would be expected to submit weekly statutory reports on their distribution activities, which would be used in assessing the financial performance of films/videos. The NFVCB will be the sole authority in charge of the entire process except in cases where it delegates certain duties to other authorities.
This new policy of the NFVCB has received an ambivalent welcome. Some have hailed it as a necessary step for the improvement of the film industry. Others, however, have frowned at the intervention of the Censors Board. The filmmakers, for instance, are divided over whether they really want help from the government. Some of them fear that what they see as the interference of government could slow down the growth of the industry. They have also complained that the Board did not seek their input in the design of the new policy. Some others have quarreled with the registration fees, which the policy specifies, saying that they are too high and would force most of the present producers and distributors out of the market. But still others, on this same point, have expressed the opinion that it would be a way of raising standards in the industry by easing out the small time players who place more emphasis on making quick money rather than in providing quality productions.
As can be seen, what the National Film and Video Censors Board of Nigeria seek to do is to put in place a firm and reliable structure of distribution. In the light of the promised growth of the Nigerian film industry and its economic potential, as well as the innovations taking place in this industry, it would be o f interest to see how the implementation of this new policy of the NFVCB unfolds. Will this policy actually succeed in establishing a firm structure, which would make the economic potentials of the industry a reality? Will the Board be able to win the full support of the filmmakers? Are the plans of the Board sufficient to deal with the problems of piracy and the advent of the new technology? Will it succeed in its drive to resuscitate the cinema?
TV PRODUCTION ECONOMICS
TV shows outline: Popular TV shows in Nigeria fall into 2 categories (1) Internationally Licensed programming e.g. Pop Idol, Big Brother, Deal or No Deal, The Apprentice which are produced for local TV sponsored by a brand and (2) Locally generated content of various genres. In both cases such productions, which meet international quality standards with the right production values, are normally sponsored by a brand that pays for the production, airtime and promotion.
Broadcasters in Nigeria as a rule do not commission programming. Their operations are strictly to retail airtime to the highest bidder, hence the huge amount of poorly produced programming in Nigeria. In effect as the standard of living improves in Nigeria, and income increases these stations will loose viewers due to their inability to develop business models that generate good television and viewership that attracts advertisers.
Number of episodes: Normally a quarter is 13 episodes
Genres & main themes: All genres though we have had thrown at the Nigerian viewer all types of programming, even Teleneovellas badly dubbed into English.
Whilst there are still many salient points and issues to be cleared and understood regarding business operational models, this document should basically be seen as a road-map of the market capabilities and processes towards understanding of the potential and challenges of the market.
Content Value Chain
Establishing a content value chain is the starting point and the most critical. Content value chains are multiple, fast maturing and becoming increasingly complex. Entertainment/TV content, VOD content and Adverts form essential parts of the content creation and distribution value-chains. Besides these, domain driven content such as Enterprise content, Digital signage, Maps, Tourism content, and Digital Cinema have high consumption and churn rates.
Additionally, user-generated content is changing the current value chains dramatically – Wikipedia, YouTube, flickr, facebook are redefining ways in which users experience content. There is also a need to re-invent services which are being offered to consumers to match the experiences of today’s consumer in their respective markets by providing for them a much richer, interactive and contextual user experience leveraging a uniqueness of possessing a service infrastructure and derivatives such as subscriber information, usage, profile and other data.
Any entrant into the Nigerian Market will have to have a plan on how to acquire subscribers, not eyeballs, through delivery of quality media content. Media delivery via cable and other open mediums are opening new opportunities for Media publishers to reach subscribers directly, which should always be the focus. On the other hand, Service providers such as Telco’s, ISPs and Cable operators are building service platforms and content stores to deliver reliable services to end subscribers.
This makes the Nigerian market a very competitive one. Focus and adoption roadmap for any project will have to be as follows:
| ATTRIBUTE | DESCRIPTION | CUSTOMER VALUE |
|
Select |
Identify and select key titles,
Publishers and third party Distributors of content. |
Saves time in gathering authoritative and interesting content. |
|
License |
Extensive contracts are put in place directly with publishers, covering legal and commercial terms. | The aggregator handles copyright payments, directly with the publisher.
Specific rights secured ensuring high quality and timely delivery. |
|
Normalize |
Thousands of different data formats are converted, so that content appears uniform, and is stored securely. | Uniform appearance saves time in gathering info from articles. Business continuity procedures prevent
Interruption in supply chain. |
|
Archive |
Data is permanently stored, and backed up for future reference. | Data is available for in-depth archival searching; any data used by a customer remains available and can be referred to in the future. |
|
Index |
Consistent and granular metadata is applied. | More precise and comprehensive
search helps customers reach the information they need faster. |
|
Productize |
Build content into a product environment and/or interface that enables the extraction of this data; along with associated functionality and delivery. | A single point of access for content. Makes it easier to get to the specific information needed. |
|
Service |
Customer Service desks and
Customer Training. |
Resolve issues at point of need; training provides customers with the tools and skills to find information faster. |
|
Maintain |
Continuous monitoring of incoming data and related problem solving, such as publisher driven editorial
Amendment |
Maintain the timeliness and accuracy of content. |
|
Secure |
Protect the database from security threats, and implement business
Continuity measures. |
Ensures uninterrupted supply of information, and removes risks in accessing content. |
These tasks can further be broken down as follows:
- Licensing, scheduling and delivery of Content over the platform – Video, Films, Games, Channels, and VOD -Content aggregation, management and discovery – Triple play converged service delivery.
- Capitalize on trends in B2B content distribution – Digital Advertising Platforms, develop “long-tail” characteristic for content consumption.
- Content availability – Availability of content in favorable contractual terms, pre-trans-coded metadata and media formats, packaging of content to enable rapid content distribution
- Content Convergence – Multi-modal delivery and consumption of content, P2P based content distribution
- User contributed content – UGC processing, distribution and consumption
- Contextual search – content-based media retrieval, presentation and personalization of content
- Ad-funded content services – non-intrusive, context, behavior based ad insertion, targeted advertising – Subscription and Advertising based subscriber management
- Business models – innovate business models enabled by Ad-funded, Brokerage models, Retail (Apple Store), Info-mediary (User profiles)
- User Experience management
This implementation we hope will deliver value for our envisaged consumer and can be the measure of service advantage for the consumer.
ADOPTION ROADMAP
I will in future additions to this blog be looking at the adoption road map for media business in Nigeria which will include phases of adoption:
Phase I
- Identify Market Segment Product Taste
- Develop Relationship with content owners. Licensing, Acquisition and Agreements
- Content – Content Ingestion, Content Processing, Content QA, Content Distribution
- Contract Management & Revenue Settlement systems
- Content packaging and bundling
- Open metadata exchange interfaces
- Order management and content delivery and distribution
- Support for User generated content (UGC)
Phase II
- Profile DB – Subscriber profile & Network profile (Presence, Location)
- Three screen strategy
- Enhanced Search & recommendation engines
- Offer management, Rating and Billing system
- Advertising Platforms – Inventory, Campaign managements
- Enhanced CPE audience measurement and analysis tools
- Ad-funded business models
Phase III
Enhanced user profiling and distribution management (via new analytical, statistical models)
CDN optimization for QoE (Quality of Experience) and QoS ( Quality of Service).
Benefits and Targets
- Rapid Integration and Service Launch as agreed
- Rapid integration of metadata and media with VOD Platforms, Broadcasters, ISPs and other Cable Operators. Creating independent Channels in the offering
- Open standard of metadata exchange enabling standardization of media
- Digitization of “needed media assets”
- Mature content-life cycle management function
- Content Product Acquisition, Inventory management – Content Catalogue creation, Metadata creation, Asset Tracking
- Content Quality Assurance -Encoding profiles, Assembly
- Contract Management -What do I own, how do I negotiate, Usage rules
- Editorial desk – Create schedules, create promotions – assemble trailers, images, music etc
- Network Ready – Validate content dispatched Content services convergence benefits
- Improved User experience
- OPEX and CAPEX improvements
- New revenue generation options
REGULATORY AUTHORITIES
NIGERIAN BROADCASTING COMMISSION
The National Broadcasting Commission is mandated by Section 2 subsection (1) of Act No 38 of 1992 as amended by Act No 55. Of 1999 to carry out the following functions;
(a) Advising the federal government, on the implementation of the National Mass Communication Policy, with particular reference to broadcasting;
(b) Receiving, processing and considering applications, for establishment, ownership or operation of Radio and Television stations including;
(I) Cable Television Services, Direct Satellite Broadcast and any other medium of broadcasting.
(ii) Radio and Television stations owned established or operated by the Federal State And Local Government.
(iii) And stations run under private ownership.
(c) Recommending applications, through the Minister of Information and, National Orientation, to the President, Commander-In-Chief of the Armed forces, for the grant of radio and television licenses;
(d) Regulating and controlling the broadcast industry;
(e) Undertaking research and development in the broadcast industry;
(f) Receiving, Considering and investigating complaints from individual and bodies corporate, regarding the contents of a broadcasting station and the conduct of a broadcasting station;
(g) Upholding the principles of equity and fairness in broadcasting;
(h) Establishing and disseminating a national broadcasting code and setting standards with regards to the contents and quality of materials for broadcast;
(I) Promoting Nigerian indigenous cultures, moral and community life through broadcasting;
(j) Promoting authenticated Radio and Television audience measurement and penetration;
(k) Initiating and harmonizing government policies on Trans-border direct transmission and reception in Nigeria;
(l) Regulating ethical standards and technical excellence in public, private and commercial broadcast stations in Nigeria.
(m) Monitoring broadcasting for harmful emission, interference and illegal broadcasting;
(n) Determining and applying sanctions, including revocation of licenses of defaulting stations, which do not operate in accordance with the broadcast Code and in the public interest;
(o) Approving the transmitter power, location of stations, areas of coverage as well as regulate types of broadcast equipment to be used;
(p) Ensuring qualitative manpower development in the broadcasting industry, by accrediting curricula and programmes for all tertiary training institutions that offer Mass Communications in relation to broadcasting;
(q) Intervening and arbitrating in conflicts in the broadcast industry.
(r) Ensuring strict adherence to the national Laws, rules and regulations relating to the participation of foreign capital, in relation to local capital in broadcasting
(s) Serving as national consultant on any legislative or regulatory issues on the broadcasting industry;
(t) Guaranteeing and ensuring the liberty and protection of the
Broadcasting industry with due respect to the law and;
(u) Carrying out such other activities as are necessary or expedient for the full discharge of all or any of the functions conferred on it under, or pursuant to this act.
THE NIGERIAN COMMUNICATIONS COMMISSION
The (NCC) is the independent regulatory body for the Nigerian telecommunications industry. The NCC was created under Decree number 75 by the Federal Military Government of Nigeria on 24 November 1992. The NCC was charged with the responsibility of regulating the supply of telecommunications services and facilities, promoting competition, and setting performance standards for telephone services in Nigeria.
I hope you find this article useful.
Aderemi Ogunpitan
TV Production Nigeria 