AFRICA: THE NEW SPRINGBOARD FOR GROWTH FOR FRENCH MEDIA GROUPS Strengthened African schedules on TV5 and France 24, the launch of A+(a dedicated African channel from Canal+), and Gulli Africa (a French children’s TV network owned by Lagardère), or the dedicated versions of Le Point (a current affairs magazine published by Le Monde): could Africa be the new Eldorado for French media companies? While some media groups have been established for a number of years, the growth in French activity in the African market in the last two years is driven by a definite «Afro-optimism». This CONTACTS reflects both a recognition of the continent’s, patchy but undeniable, economic dynamism, and the opportunity that French-speaking Africa represents in the medium to long term. It also reflects an urgency among media groups to find new sources of growth, as they face the transformation of their traditional segments in the domestic market. This article assesses the opportunities for broadcast and print media groups in sub-Saharan Africa, and sets out the key success factors for such growth initiatives, in an environment that remains complex and uncertain. PHILIPPE PESTANES [email protected] SARAH PEREZ [email protected] reaching 350 million by 2017), and the avai- of new digital activity, catalyzing the lability of a choice of data bundles. consumption of services and the develop- THE DRIVERS OF ment of the user-base in the medium term. The penetration of mobile internet « AFRO-OPTIMISM » Moreover, the digital transformation is lowe- ring structural barriers to entry, freeing its players from the conventional and often Afro-optimism seems to be firmly complex physical distribution networks rooted in the minds of economic that have to be negotiated in Africa. Some decision-makers and is mirrored in a French press titles have therefore capitalized raft of growth initiatives from media on the opportunity to address a connected groups. What are the key reasons for audience by positioning themselves online, this confidence, which, it seems, nei- limiting the investments and uncertain- ther Ebola, nor the risk of terrorism ties involved in traditional go-to-market or political and military conflicts have strategies. dented? In Africa, digital could also contribute to developing a French-language meta-mar- ket for the media sector and French cultural A TRIPLING OF THE FRENCH- Source: World Bank SPEAKING AFRICAN POPULATION products. Focused on France to-date, this market could benefit from global French- BY 2050 language distribution platforms and eco- With products like Klif, Orange’s new Africa- nomies of scale that cannot be realized in According to the International Organization wide bundle (which offers a smartphone and the French domestic market. of La Francophonie, the number of French a package that includes 500MB of data, calls, speakers, worldwide, will triple between 2015 and SMS, for €35), the emergence of offers and 2050: from 275 to 750 million people. and devices enables the rapid acceleration The main engine of this growth: African demographics. Overall, by 2050, nine out An overview of 4G in Africa in July 2015 of ten French-speakers will be African. The continent’s demographic dynamism and its consumer base have been cited as the main reasons to invest now, coming ahead of capitalizing on rapid urbanization and posi- tioning for the future, according to a study by Havas Horizon and the Choiseul Institute. While the media sector continues to contract in France’s domestic market, French- speaking populations, particularly in Africa, represent a potential consumer-base for print and broadcast products: a natural mar- ket for media groups to exploit. THE DEMOCRATIZATION OF INTER- Countries that have launched 4G (following NET ACCESS AND DEVELOPMENT OF initiatives by the regulator and/or operator[s]) THE DIGITAL ECONOMY Countries that have partially launched 4G, in a test phase or with limited coverage (following Africa is a mobile-centric continent seeing initiatives by the regulator and/or operator[s]) very rapid democratization of internet Countries with plans to launch access. This is driven by a combination 4G in the short and medium term (following initiatives by the regulator and/or operator[s]) of 3G networks today, and 4G tomorrow (Morocco has now allocated frequencies to Countries with no plans to launch 4G at present (or where information is not national operators), the arrival of low-cost available) smartphones (expected to double in number, Source: Wavestone 2 AFRICA: THE NEW SPRINGBOARD FOR GROWTH FOR FRENCH MEDIA GROUPS Estimated average GDP growth between 2012 and 2017 KEY SUCCESS FACTORS IN A COMPLEX ENVIRONMENT MARKET STRUCTURE IS STILL TO BE DEVELOPED IN MOST OF FRENCH-SPEAKING AFRICA World Pacific A lack of qualified and reliable data Southern Asia central Asia Caribbean Middle East East Asia and the As Olivier Hessikaya, CEO of the Senegalese Sub-Saharan Africa Central Europe and North Africa and the Latin America and the office of the advertising agency, McCann, notes, «the availability of good-quality mar- Source: World Bank ket data is very limited.» All players agree that the lack of reliable data is now one of ECONOMIC DEVELOPMENT AND Estimated advertising spend by media type in French-speaking sub-Saharan Africa* the main barriers to the development of THE EMERGENCE OF THE MIDDLE marketing activity and advertising in Africa. In €m and % of total market CLASSES: A MOTOR FOR ADVERTI- Metrics on the consumption of TV, radio SING and print media remain a long way behind European standards of measurement. TNS- Demographic drivers, the democratization Sofres’s «Africascope», an established mea- of digital activity, investment, and confi- sure in the French-speaking market, pres- dence in the continent’s future seem to be ently covers only the capitals of the major the synergistic ingredients for sustained countries in the region, and data remains economic growth. World Bank forecasts reported (in the form of face-to-face inter- affirm Africa’s dynamism, especially in the views in participants’ homes). sub-Saharan region, an area currently going through a catch-up phase. The development of mechanical measure- ment techniques, for example, recording The advertising market, traditionally highly boxes of the type used by Médiamétrie (a correlated with GDP growth, should also French audience measurement company) see sustained growth. The emergence still comes up against complex financing of a middle class - with rising purchasing issues: «media companies are skeptical power, allowing more leisure spending - and about the quality of results and national the growth of local and regional SMEs can channels won’t invest in uncertain measures. now generate communications budgets, They often prefer to rely on more advanta- leading to higher spending on advertising geous ad-hoc studies», says Hessikaya. and increasingly structured markets. This Sources : Havas Africa, Zenith Optimedia, eMarketer Global Media could reach €360 billion in 2020 for French- Intelligence, Wavestone In a market that is still embryonic, there speaking sub-Saharan Africa. are few, or no codes of practice covering advertising activity. Such codes enable good practice to be defined and the sharing of key information between authorities and advertisers, as happens in France with the Union des annonceurs (the industry body for French advertisers). 3 Nevertheless, the emergence of data col- digital, should nevertheless encourage wider THE IMPORTANCE OF TAILORING lection by telephone in English-speaking access to quality varied broadcast-content. THE MODEL TO AFRICAN NEEDS African countries like Kenya or Cameroon, This market opening, destined for private suggests there are opportunities to improve sector broadcast players, is a major issue for Despite French media groups’ proximity levels of representativeness and regularity in growth. Despite the underlying political and to African markets, their activities in Africa the medium term. regulatory complexity, international opera- are all too often targeted at economic elites tors, broadcasters, and content publishers and African expatriates. Other European The need to enhance and differentiate are taking positions on the allocation of DTT players also perpetuate this elitist approach, content offers frequencies. for example, the Financial Times, with its African consumers suffer from limited avai- London-based bimonthly publication, This lability of quality broadcast content. The is Africa. French media groups will only be television offer, for example, still amounts to able to fully realize the potential that Africa a national public channel in many countries, offers if they adopt a mass-market approach with the schedule limited to general progra- and a model adapted to the reality of African ming and news. This lack of differentiation markets.. acts as a brake on better exploitation of audiences by advertisers. Developing a tailored offer with locally-targeted and differentiated Diversity and quality in programing are content essentially only available to satellite TV subs- African consumers want high-quality - and cribers, a relatively affluent consumer seg- African - content. The success of Nollywood ment, able to afford a subscription of €15- TV is an important example: it is the first 20 per month. The alternative, for the less African channel to offer dramas specifically well-off, is often a more affordable «pirate» aimed at women. Nollywood rapidly attrac- subscription. ted an