Kwese Sports and StarTimes to end SuperSport’s monopoly

There is palpable excitement in the sport television market following the announcement of the 2018 FIFA World Cup media rights for Sub-Saharan Africa last week. Alongside the usual suspects SuperSport, newcomers Kwese TV and StarTimes have acquired various rights to screen the 2017 Confederations Cup, the junior men’s tournaments as well as the women’s tournaments.

While SuperSport has held the African pay television market by the scruff of the neck for several years, new players Kwese and StarTimes are flexing their muscles and challenging the monopoly of the South African behemoth.

StarTimes has been puffing for a while now and saw an increase in sales of digital decoders and antennas when it won rights to the 2015 Fifa tournaments (Women’s World Cup and men’s U17 & U20) for sub-Saharan Africa. Like many eager football fans, I acquired my StarTimes decoder during that period. 2015 was a good year for the Chinese company as they bit into the SuperSport market share and also took over the German Bundesliga rights. But as soon as the tournaments were over, it was difficult to sustain interest in their other offerings. So I abandoned my set top box.

The most exciting entrant into the market is Kwese Sports owned by Econet Media. Apart from the pay TV rights to the World Cup, Kwese Sports got the free-to-air package for the whole of sub-Saharan Africa except South Africa. This means that the ambitious company can enter into alliances with domestic broadcasters across the continent like the NTA, AIT and others, to broadcast the World Cup. This will bring them brand leverage that could be turned into a massive market for their pay TV roll out.

On the surface it all seems like the higher the competition for media rights, the better it is for customers. In truth, customers get to pay more on the long run in acquiring different decoders and paying subscriptions across several platforms in order to access their many different offerings. But it is FIFA that has actually made more profit in this bidding round.

Despite the recent corruption problems faced by FIFA, the organization seems to have weathered it very well and its most important product, the World Cup, continues to be a big draw. It is an extremely coveted property that every broadcaster wants to have.

According to Callum McCarthy of Sport Business, FIFA’s profits went up almost 95 per cent this year from all the jostling for media rights for sub-Saharan Africa. SuperSport paid around $11million for the 2014 rights (exclusive pay TV across Africa), they slightly increased their payment this year to $14m (non-exclusive pay TV rights) while Kwese Sports acquired their free-to-air and pay-TV rights for almost $34m. Let us assume that StarTimes got their deal for around $10-12m. This round of rights sales has put a decent $56-58m in FIFA’s pockets from sub-Saharan Africa.

Sport has always been a major incentive for the purchase of cable TV subscription. In the United States, ESPN continues to be the most expensive channel to watch. Unlike movies and other programing, sport is unpredictable so it draws large audiences. And because live sport is consumed as it is produced, it has a higher premium than any other kind of TV content. The 2014 World Cup had a cumulative audience of 3.2billion with 98,087 hours of broadcast (FIFA TV Audience Report).

Nigerians love live sport and regularly pack viewing centres and bars in order to watch European football. As the NTA (with average viewership of 16.7m for Brazil 2014) and other national broadcasters have become unable to compete for global sports rights, SuperSport has been the benefactor of the crave for global sport.

While StarTimes’ offering has not been up to the same quality one has come to expect of cable TV, Kwese Free Sports seems to have an ace up its sleeve. It has introduced one free English Premier League game via its mobile app every weekend and is set to expand its reach across the continent through the Confederations Cup and World Cup. From a marketing perspective, it has an opportunity to grow its brand to become an important voice in the African media market.

While SuperSport has established itself as a leader in the industry, the new kids on the block have an opportunity to create product differentiation by producing memorable programming around the World Cup in order to gain considerable audience share. Will they be able to offer behind the scenes, road to Russia and exclusive African national teams’ footage that would be memorable?

For advertisers, it is most likely SuperSport would remain the first option with StarTimes and Kwese Sports hoping to take a significant bite of that money. Still, the World Cup advertising market in Nigeria depends very much on the Super Eagles qualifying for Russia 2018. If they do, there would be a windfall like Brazil 2014 where brands fell over themselves to run campaigns in the frenzy of the tournament. With more broadcast rights owners, would top brands spread the money around or remain with their trusted ally?

Kwese Sports’ survival will depend on how much they are able to commercialize their new property. The next several months would confirm if our new found excitement about changes in the sport television market has been worth it.