Africa is the new frontier for sports OTT and mobile is the gateway Opinion

Africa is the new frontier for sports rights holders. While the direct-to-consumer (DTC) sports over-the-top (OTT) market is on a huge upward trajectory globally, emerging markets are spearheading this growth and Africa is at the heart of that.

As I referenced in my last thought leadership piece discussing this topic more broadly, our white paper states the sports OTT industry is set to reach US$85 billion by 2024 and is rapidly becoming fans’ go-to method of accessing their favorite sports teams and, crucially, live games.

But looking in more detail at this growth, why is Africa such a hotbed for rights holder opportunity? Why do mobile networks (MNOs) hold the key to both capitalizing on D2C growth for rights holders, but more importantly democratizing sports content and making it accessible to all?

Regarding mobile’s sharp rise on the continent specifically, the GSMA’s recently published 2022 report highlights that mobile penetration in Sub-Saharan Africa is currently at 40 per cent of the population and will reach 50 per cent by 2025. This totals an economic value of US$154 billion and equates to a projected 613 million unique mobile subscribers, with 61 percent of these connections being smartphones, and 41 million being 5G connections.

These are powerful numbers, and the data is very compelling in key markets on the continent. Smartphone connections are set to reach 73 million in South Africa by 2025, the second largest market behind Nigeria at 154m, with Ethiopia and Nigeria set to equate to a third of the Sub-Saharan market segment on their own.

Why is this significant for sports OTT? Mobile is not only the first screen for sports fans in Africa and similar emerging markets, but in many cases it is the only screen for them to watch their favorite team. Mobile penetration massively exceeds that of TV, which still sits at less than 50 percent penetration of all households in Africa. Statista’s 2022 report shows that the number of pay-TV subscribers across the Sub-Saharan region will grow to only 45 million by 2027, compared to 613 million phone subscribers by 2025.

What’s more is that Africa is on a huge upward trajectory for sports both in terms of elite performance and consumption, with the continent’s sports economy seeing five percent year-on-year growth over the past 20 years. At the ongoing Fifa World Cup, African champions Senegal will be joined by Cameroon, Ghana, Morocco and Tunisia to compete at the pinnacle of elite soccer – after the biggest ever Africa Cup of Nations hosted in Cameroon in February this year.

The Basketball Africa League (BAL), which is organized by the National Basketball Association (NBA) and the International Basketball Federation (Fiba), is going from strength-to-strength following its second season, with a strong sponsorship and ambassador portfolio including Barack Obama. South Africa, meanwhile, are the reigning men’s Rugby World Cup champions. Sporting heroes are everywhere you turn.

With consumption happening on mobile devices, coupled with a growing appetite for international and domestic sports, the last piece of the jigsaw is monetization in order for rights holders to unlock potential fans and turn them into paying subscribers – while also democratizing access.

However, a constant issue for rights holders has been this access piece. How do you reach African consumers, give them the content they crave and monetize their demand when credit card penetration across the continent is low at five percent? Even in South Africa, the most banked African nation, this sits at 15 percent and is relatively stagnant. The answer is the mobile ecosystem.

The mobile phone is increasingly used by African consumers as the de facto device to pay for products and services, including M-Pesa, a plethora of mobile money wallets and direct carrier billing (DCB) via mobile networks. DCB mobile payments are particularly powerful when paired with content, as consumers can simply subscribe to or purchase a product by adding the cost to their phone bill or using their pay-as-you-go pre-paid phone credit.

It’s simple, secure and every consumer with a phone in their hand can use it without signing up to a wallet system, needing a credit card or bank account to function. A phone subscription or phone credit is all the customer needs to go through with the transaction.

What’s more, with DCB you can effectively adjust your pricing and charging strategy according to the market in question. Rather than larger, monthly transactions, you can move to much more manageable and commonplace bite-sized weekly or daily charges as micropayments, making your OTT accessible to all consumers in Africa and not simply the reserve of those with a credit card or cable TV subscription .

Therefore, with their market dominance, reach and ability to process payments via DCB, MNOs are the true kings of D2C on the African continent. That’s why for years we’ve seen streaming powerhouses such as Netflix, Spotify and Deezer enter partnerships with MNOs, and it’s no surprise Africa’s biggest telco MTN is the lead sponsor of South Africa’s biggest sporting franchise, the Springboks.

The scene is set for sports OTT to follow and this has been spearheaded by the NBA, with its multi-territory international mobile payments deal for NBA League Pass, including territories within Africa.

Connecting with MNOs unlocks previously inaccessible audiences and provides maximum revenue potential for an OTT service. Telcos give immediate scale as a distribution channel, which when coupled with these frictionless mobile payments, data insights and marketing tools, make for an intoxicating combination for any rights holder.

The opportunity for sports OTT’s growth via mobile in Africa is just getting started. Not only are audiences mobile-first and consuming more content than ever before, but mobile serves as a means to unlock new monetizable fans and a catalyst for growth via mobile payments such as DCB.

Beyond the obvious commercial gains, there are also the massive benefits that come from democratizing access and ensuring that top-flight sport is available to the masses on the continent.

Accessibility and social impact are fundamental to the growth of sports in Africa.

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