Video on demand prospects grow in Africa

Fast broadband has allowed many users to have some sort of video on demand experience, whether legal or otherwise, according to Richard Alden, the chief executive officer at Zuku, a Kenyan ISP that also offers cable and satellite TV.

The company's broadband package essentially allows people to have an on-demand experience, Alden said. "The reality is that everybody who's got Zuku network today is actually watching a type of video on demand (VOD) because they are streaming movies one way or another," Alden said.

He pointed out the growing downloads of movies and even illegal connections to the popular American on demand service Netflix -- some users have managed to use Virtual Private Networks to disguise themselves as U.S. residents and access the service, and there are even commercial, specialized services that enable this.

Zuku is in the process of launching its own Internet-based, video-on-demand television product, "which will allow you to have access to decent ranges of movies and other television series," Alden said.

As consumers access content in different ways -- not only on television but through their laptops, mobile phones and other gadgets -- a variety of companies in Africa are looking to dive into VOD services. MTN, a pan-African telecom company, has already launched several VOD services across Africa, including in South Africa where they have MTN FrontRow and in Côte d'Ivoire in partnership with Summview, a digital VOD enabler.

In late 2013, Safaricom, East Africa's leading telecom company, announced its interest in launching VOD services. The company recently received a broadcasting license from the Communication Authority of Kenya.

South Africa and Nigeria are spearheading VOD services in Africa, according to Balancing Act, a telecom, Internet and broadcast consultancy. Its "VOD and Africa," published last month, singled out Nigeria's IrokoTV, a service that streams Nigerian and American content, as having promoted the concept of VOD on the continent.

The report added that YouTube usage and BoxOffice, a VOD service by pan-African company DSTV, also introduced people to the idea.

The high cost and low penetration of the Internet in some areas, however, will present barriers for VOD, according to Glenn Davies, the group CEO of Inigmah, a digital VOD service company with exclusive partners across Africa.

"Providing HD quality video to users who do not have reliable or fast internet is always a challenge. Users also prefer to digitally download files [and not to stream] because of the high rates of mobile bandwidth costs," Davies said.

Davies says that the adoption of VOD is nevertheless being adapted through mobile phone gadgets.

"VOD deployment in Africa relies heavily on mobile distribution, so all of our client's sites have to be optimized and structured to have good graphical interfaces made for various common tablet and mobile devices," Davies said.

Other providers have not found it easy to deploy VOD services. When Able Wireless in Kenya announced plans to launch VOD in the country, consumers were upbeat. But the company had to wait over a year to receive a license as the government could not decide whether they were a broadcaster or ISP. Ultimately the company received a digital broadcasting license.

The wait for a license has delayed their entry into the market and they will have to contend with Zuku and the impending Safaricom service.