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Ethiopia/Media: Canal+ ready to take on StarTimes and Multichoice

By Julien Clémençot
Posted on Thursday, 29 April 2021 08:50

Parables in a residence in Addis Ababa, Ethiopia © Tiksa Negeri/REUTERS

By launching a wide range of Amharic-language television channels, the Vivendi subsidiary Canal+ is pushing its Chinese and South African competitors -- Startimes and MultiChoice -- to reconsider their plans. The French media conglomerate is taking a bet that goes beyond Ethiopia's middle class, which it estimates at 1 million people.

At Canal+’s headquarters in the Paris suburbs, the teams of the Africa division certainly wanted the event to be more festive. The fault lies with Covid-19 and the war in Tigray. Although Canal+’s Ethiopian platform is being launched extremely cautiously, it is the most important project that the subsidiary of Vivendi – a French media conglomerate – has carried out on the continent in recent years.

Around $100m has been invested in it over the last five years.

Accelerating the project

David Mignot, managing director for Africa, has high hopes for this country of 110 million inhabitants and wants to win over 1 million subscribers. Ethiopia would become Canal+’s largest market south of the Sahara.

“War is obviously a bad thing, but not one that will discourage us. We are used to complex environments and are planning for the long term,” says the director.

A victim of widespread piracy, Canal+ gave up on the Maghreb in 2011 and then gave a serious boost to sub-Saharan countries by lowering the price of its offers, improving its distribution and finally creating content that would appeal to more than just expatriates and the wealthy classes.

Between 2012 and 2020, the company controlled by Vincent Bolloré increased its African subscribers by almost tenfold. It had 6 million at the end of last year and, over the last 12 months, 1 million new customers have registered.

Middle class

In 2019, Canal+’s management drew up a list of the most promising markets and Ethiopia stood out as an obvious choice. “It is a large country with a common language, which is neither English, Spanish nor French, and where pay-TV is still in its infancy. Canal+, which had already created platforms from scratch in Vietnam and Poland, had all the skills needed to carry out this project,” says Mignot.

Ever since prime minister Abiy Ahmed came to power, the country has been gradually opening up to the market economy and more and more sectors are becoming attractive to foreign investors.

“Before Covid and the war in Tigray, Ethiopia had a growth rate of almost 10% per year. The middle class, those who can go to restaurants and the cinema, accounts for more than 1 million people, 70% of whom live in the capital,” says Olivier Poujade, co-founder of the consultancy firm East Africa Gate, which helped Canal+ better understand the regulatory aspects and ecosystem of the Ethiopian market.

The Middle East

“I see far beyond this wealthy middle class. Research shows that if a household has access to electricity, most of the time it also has a television and there is room to develop pay-TV. In Haiti, despite the country’s difficulties, Canal+ has 100,000 subscribers. Television provides unparalleled access to entertainment and education,” says Mignot.

With a starting price of €5 (250 birr), the French group hopes to reach a wider audience, especially as it is giving pride of place to the Amharic language, with around 30 channels and 15 radio stations in the language, in addition to international channels such as Rai.

“Within an hour of the capital, English is no longer spoken, even in the business world,” says Mignot. Currently, Ethiopians watch television on Nilesat and Ethiosat, which are free platforms. Many still watch programmes that are edited for the Middle East.

Rivals limited by budget

“Although private channels such as EBS (based in the US) and Kana TV have emerged in Ethiopia over the past 10 years, their development remains limited due to the size of their advertising budget, which at most reaches $20m per year,” says Elias Schulze, co-founder of Kana TV, which Canal+ bought at the end of 2020.

This is an opportunity for the French group to make the most of its know-how by launching nine channels in Amharic, including one devoted to sport (NBA, Bundesliga, Ligue 1) and two to cinema.

A Canal+ shop in Addis Ababa
A Canal+ shop in Addis Ababa / rights reserved

Thanks to an agreement with local producers, it has bought a catalogue of 500 feature films and will be able to broadcast, after their theatrical release, about 100 new films a year. “We have discovered that Ethiopian cinema is very dynamic,” says Mignot. The dubbing of all the programmes will be done locally by Be Media, one of Kana TV’s long-standing partners.

Multichoice jolt

In Randburg, a town attached to Johannesburg and a stronghold of Multichoice, the Canal+ projectr(which holds 12% of the South African group) has had the effect of an electroshock. Although the Ethiopian teams had been pleading for investment for several years, their management had until then remained deaf to their projects.

“We had discussions centred around including Kana TV in their offer or helping them edit local channels, but they didn’t go well,” says Schulze. By only offering programmes in English, the continental leader in pay-TV (who has more than 20 million subscribers) was mostly only reaching expatriates and “repats.”

Present in the country since 1992, its customer portfolio only included a few ten thousand households. Informed in advance of Canal+’s intentions, its CEO, Calvo Mawela, reacted quickly. In mid-2020, he agreed to add local channels to the MultiChoice channel package as well as the Indian channel Zee, dubbed in Amharic.

“We will continue to demonstrate our commitment to Ethiopia by developing local skills and industries, and through content projects (…) that speak to Ethiopians in their own language,” he said at the time. These developments also affected the sports sector, as Canal+ announced in September 2020 that it had purchased the rights to the Ethiopian football championship and that it would also be providing sports commentary in Amharic.

Soft power

Startimes, which has been present in the country since 2018 and is a major player of Chinese soft power in Africa with its 13 million subscribers, is considering adopting a similar strategy. “It is a market with enormous potential but with strong specificities, starting with the language. In general, in Africa, we have always favoured local channels or channels in local languages,” Andy Wang, Startimes’ East Africa director, told us.

In Beijing, the group has a translation centre that enables it to dub 10,000 hours of programmes per year. Startimes is open to creating channels in Amharic, just like it has done with Yoruba and Hausa in West Africa.

Having just returned from Addis Ababa, Mignot does not feel threatened by his main competitors. The market is sufficiently large and untapped, so everyone can do good business for a few years. He also knows that an accessible channel package will make all the difference. Its platform’s Eutelsat satellite, centred on the country, already provides an excellent ground signal.

There is no need for a giant satellite dish to pick it up. And on the ground – thanks to its distributor, Teodros Abraham, who is also Bolloré’s local partner – it already has around 300 points of sale and a presence in the country’s major regions. By the end of next year, Mignot hopes to have between 1,000 and 2,000 outlets installed so that he will be able to celebrate the success of Canal+’s Ethiopian project.

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