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Are Africans too poor to pay for content?

get.Africa
Are Africans too poor to pay for content?
By get.Africa Weekly • Issue #68 • View online
Ẹ kàárọ̀,
That’s “good morning” in Yoruba
Selar.co recently opened its books for the world to see. 
The platform, which is similar to Gumroad but for African creators, now generates $550,000 in annual revenue. 
While this is impressive, it’s Selar’s co-founder’s conclusion about the content landscape that intrigued me the most.
Douglas Kendyson:
“There’s still the assumption that Africans don’t pay for content… everyday we prove this wrong 10 times over… Africans DO pay for content.”
The skinny piggy bank theory
Kendyson is referring to a school of thought that believes Africans don’t pay for content largely due to economic circumstance. 
One of the biggest proponents of this is iROKOtv co-founder Jason Njoku.
Last year, despite lockdowns leaving the world with little else to do other than consume copious amounts of content, iROKOtv’s user base in Africa shrunk. Njoku says the reason for this was strictly economic. 
“It’s not like Iroko has suffered and everybody else has been crushing it. It’s a question of why no one has been successful. The answer is that people are just poor.” 
The problem with Njoku’s assertion is that, around the time that iROKOtv was struggling to grow its African user base, its competitor Showmax was actually growing rapidly and “crushing it”.
Although, the company recently slashed its mobile plan by 20%, signalling that the growth might have now cooled off. 
Multi-factorial
It’s early days for digital content in Africa, that goes for every player, from giant streaming companies like iROKOtv and Showmax to niche, creator-driven platforms like Selar.
While economic circumstance plays a role in this earliness, there’s a tendency for that role to be blown out of proportion. 
Let’s consider the average revenue per user (ARPU), a metric that helps us measure how much money a provider is generating per user.
In 2020, Netflix’s ARPU in the US and Canada region was $13.31.
Showmax’s numbers aren’t shared independently but that same year, their parent company Multichoice reported ARPUs of around $20 in South Africa and $7 for the rest of Africa. 
Their combined ARPU for the continent was roughly the same as Netflix’s for the US and Canada. This punctures a hole in the Africans-don’t-pay-for-content argument.
That’s the reason why, to my mind, bigger challenges exist outside of the piggy banks of African users:
  1. Distribution: More innovation is still needed around content delivery networks at scale, innovation such as iROKOtv’s agent network. That’s why I continue to believe that Multichoice’s ruggedized VSAT and RF networks remain its competitive advantage over other content providers.
  2. Content quality: All over the world, users respond to content. The bump that Showmax experienced last year was largely due to the popularity of one of its shows, Big Brother Naija. Sometimes a lack of response might be more of an indictment on the content provider, than the user.
  3. User behaviour: Speaking of users, Selar’s success again highlights that many Africans still prefer one-time transactions over the longer-term commitment of recurring subscriptions, and downloading content over streaming content. 
Selar has been able to disprove the skinny piggy bank theory by relying on the ingenuity of the creator economy for content. And also by relying on internet infrastructure that is far more mature for distributing downloadable content than it is for distributing streaming content. 
The next question is whether they’ll be able to do this at scale.

get.Africa is a weekly roundup of the most interesting stories in African tech. To support, follow us on Twitter, subscribe to our YouTube channel, share this issue or send us an email. You can also check our archives.
  Credit: Getty Images
Credit: Getty Images
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