• Friday, December 01, 2023
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Telcos target fresh revenue in video streaming amid rising user affinity

Telcos target fresh revenue in video streaming amid rising user affinity

Telecommunications companies in Nigeria are tapping into video streaming as a fresh revenue source, as consumer preference for this new service continues to rise, especially amongst high networth individuals, BusinessDay investigations show.

More Nigerians will watch streamed video on a weekly basis than broadcast television this year, according to the latest ConsumerLab annual report released by telecommunications equipment manufacturer, Ericsson. “Viewers are currently shifting towards easy-to-use on-demand services that allow cross-platform access to video content”, said Rebecka Cadering Angstrom, senior advisor, Consumer Insights, Ericsson, in a recent interview with BusinessDay, which was conducted via video conferencing.

Video on Demand (VoD) is a system that allows consumers to select and watch video content of their choice on Personal Computers (PC) , tablets, smartphones and television.

Over the next two years, VoD service revenues will reach an estimated $40 billion, growing by 150 percent in 2017, says recent research from iDATE.

Read also: iFlix bets on AI, collaboration for improved video streaming in Nigeria

Growing user affinity for video streaming is  heart-warming for mobile operators, as many are working aggressively to build up alternative sources of revenue, in an attempt to offset the sharp decline in voice revenues, which is driven essentially by regulatory and competitive pressures.

Average Revenue Per User (ARPU) for voice services is expected to decline by around $5 per month over the next five years, down from $6-$7 in April 2013 and $10 in 2008.

Video streaming is however  opening up new frontiers for local and foreign investors, with many keen on taking advantage of the huge potentials it offers. This explains why there are a growing number of indigenous firms coming on stream. 9fix, Afrinolly, Dobox, IbakaTV, iRoko TV, and RealNolly are some of the local VoD platfroms currently providing content services.

MTN’s Afrinolly currently boasts of over 4 million downloads across all the major platforms. Afrinolly is a nifty application that allows users to get information about the movies that are being released in the African market and they can watch trailers or stream free content from their mobile devices. “The MTN DoBox and Afrinolly came as a game changer to the movie industry in Nigeria”, said Funso Aina, public relations and protocol manager, MTN Nigeria, in an interview. Said Aina, “Those who place premium value on watching movies on-the-go through the use of cutting edge technology have been adopting it significantly since it was launched”.

Other telcos are also moving in this direction. In recent months, Globacom, has launched its VoD platform dubbed, ‘Glo Total Entertainment’. It gives subscribers access to sports, movie trailers, celebrity gossip, TV series and music videos, which can be accessed using a mobile app on all major smartphone platforms.

Globacom is playing catch-up, as MTN is already in alliances with Dobox and Afrinolly. United Arab Emirates’s (UAE) Etisalat Nigeria, is in strategic partnership with Dobox, while India’s Airtel has its own platform dubbed, N5 Entertainment Store. Indigenous VoD players are also optimistic about the prospects of the emerging industry.

A recent survey of smartphone and tablet users in Nigeria and South Africa, conducted by Informa Telecoms & Media, shows that users spent an average of 2.5 hours per week each, watching streamed video.

Jason Njoku, chief executive officer (CEO) of iROKOtv, is of the view that affordable internet access as well as innovation in payments and content are critical to the sustained growth of VoD sector in the country. “We know that the audiences in Sub-Saharan Africa (SSA) want the content – there’s absolutely no question of that – and not just Nollywood, but quality, awesome content from around the world,” he said the iROKOtv scribe.

He further said that with audience already in place, and as content catalogues expand, bandwidth constraints in Nigeria remain a significant drawback slowing VoD growth. “We’re waiting on cheaper and better broadband across the continent to make VoD even more successful.”

In view of this, mobile operators are developing innovative data bundles and packages to drive usage levels. In response to its subscribers’ varied preferences in regard to data consumption, simplicity, control and preference, Etisalat Nigeria has introduced the Etisalat SmartPak.

The Etisalat SmartPak consists of the Social Me Pak, Chat Pak, and Video Pak. The Video Pak offers two-hour access to stream for only N400. With this, mobile subscribers can watch their favourite football match or makeup video without thinking of the costs.