Hustle & Flow #60: Funding Creative infrastructure; Dstv struggles; Creators thrive; and more

?? According to the internet, the biggest news of the past month was that Idris Elba plans to move to Africa, “in the next five, 10 years, God willing”.

Well done to the Africa Cinema Summit for spurring this viral moment.

As we wait for Idris, new funding is being committed to Creative infrastructure (but voices are starting to question where the cash is going), Dstv is in trouble, a revolution is brewing in the world of sports broadcast rights, and digital creators are doing their own thing and thriving.

?? If you enjoy my insights on the African Creative and Sports space, make sure to subscribe to my monthly newsletter Hustle & Flow.

Start by getting a taste below ??

NEW FUNDING

Afreximbank has doubled its commitment to finance the Creative industries.

The announcement was made during African Export-Import Bank (Afreximbank) ’s annual CANEX event, which took place in Algiers this year.

?? The Cairo-based trade bank says it will now aim to disburse not 1 but $2 BILLION in the space over the next 3 years, with most of the new funding going towards creative and sports infrastructure.

Indeed, the lack of infrastructure is a key - if not the main - bottleneck to the true explosion of the creative sector on the continent.

In the same way that you could not grow ecommerce without fintech or affordable shipping and logistics solutions,

?? You cannot nurture new music stars without a network of performance venues of all sizes.

?? You cannot monetize local content without more distribution options, be they cinemas, television channels, or digital platforms.

?? You cannot improve production quality without properly equipped physical film studios.

?? You cannot produce affordable African fashion without factories and manufacturing hubs that lower costs.

???? You cannot identify and train new football players or MMA fighters without gyms and academies.

?? You cannot host major sports and entertainment events without world-class arenas.

??????And you cannot acquire specialized skills, from cinematography to data analytics applied to music distribution, without schools and universities.

So, the need is there.

The question is, is the industry ready to absorb this amount of funding??

Will Afrexim find enough well-developed, ready-to-go projects to finance in such a condensed time frame?

When I initially posted this story on Linkedin, the comments reflected industry operators’ frustration about the multiplication of big announcements from DFIs (Development Finance Institutions) that seem followed by little action.

?I’ll dig into this issue in a future post.

BROADCAST

DStv is in trouble, you guys.

?? According to MultiChoice Group ’s latest annual report, active DStv subscribers in South Africa have dropped from 8.0 million to 7.6 million.?

Although South Africa comprises 48.5% of MultiChoice's subscriber base, it accounts for a significant 60% of the group's revenue, so these numbers are BAD.

??The company's financial statements show a $232.4 million loss, which makes Multichoice technically insolvent, as I’ve pointed out before (read my viral post here).

So where did these 400,000 subscribers go?

MultiChoice cites severe economic pressures, financial distress, high living costs, and load-shedding as reasons for this decline, which spans all subscriber segments from mass market to premium.

?? ??But the real reason is, of course, the rapid expansion of uncapped fiber internet in the country and the relentless and inevitable growth of streaming services like Netflix and 亚马逊 Prime, which present an existential threat to MultiChoice’s traditional Pay TV business.

The company’s future now hinges on its ability to expand its own streaming services, Showmax and DStv Stream, and on a successful execution of its planned merger with the deep-pocketed Canal+.

???? MultiChoice continues to aim for Showmax to break even in 2027 and reach $1 billion in net revenue by 2028. In the last financial year, Showmax generated $56.5 million, up from $46.3 million the previous year. That’s one long, ambitious way to go.

SPORTS?

Television is dead, long live television.

While MultiChoice is fighting for its survival, Afreximbank (again) has announced the extension of a $264 million debt facility to New World TV (NWTV), to be used in part to finance the acquisition of Africa broadcasting rights for several premium international and African sporting events.

?? Some of the events covered include football games from FIFA, UEFA, CAF, the French Ligue, and Spanish LaLiga.

Founded in 2015 in the tiny country of Togo (population: 9.5 million), NWTV burst on the pan African broadcast scene in 2021 when it snatched the rights to the 2022 Qatar World Cup from under Canal+’s nose.

And then it did it again with the rights to AFCON 2023.

?? NWTV itself currently broadcasts in seven local languages across 24 countries, but its business model is based on the sub-licensing of these valuable sports rights to other Free-to-Air, Pay TV and streaming operators across the continent.

For example, earlier this year NWTV sold AFCON licenses to Azam TV, StarTimes, SuperSport, AfroSport, and NTA, among others.

Many of NWTV’s potential sub-licensees are public, Free-to-Air channels that reach very large audiences in their respective countries but had no way to access these premium sports properties when they were locked up by a Canal+, MultiChoice or beIN.

??Besides the potential financial boon for NWTV, one key outcome of this strategy, if successful, will be the democratization of access to premium sports content and a complete revaluation of the size (and so the commercial worth) of African sports audiences.

Nigeria's leading Dambe promoter, African Warriors Fighting Championship (AWFC), has secured the backing of Sports, Tech and Entertainment investor Silverbacks Holdings.

?? Dambe is a traditional form of boxing originating from northern Nigeria, in which fighters use one hand wrapped in cloth as the striking hand, while the other hand is used for defense.?

A very popular form of local entertainment, dambe’s live matches draw thousands of rabid fans, just like Senegalese wrestling and other similar types of traditional fighting do across the Sahel.

?? I became fascinated by this world 17 years ago when I attended a Nuba wrestling match in Khartoum (long story).

The connection between ancient African combat sports such as dambe and the booming MMA market is clear. AWFC is one of the few players attempting to elevate traditional African fighting and take it global.

?? AWFC says its platforms have already generated over 500 million views, and racked up 600,000 social media followers. Beyond Nigeria, their largest audiences hail from the US and Brazil, countries with huge markets for combat sports.

The company’s revenue streams include live events, media rights, talent management, and the upcoming AWFC TV, featuring collaborations with renowned UFC stars.?

Previously, AWFC secured a landmark sponsorship with Stake, a leading crypto-betting company and official UFC sponsor, marking Stake’s first foray into Africa.

?? The deal with AWFC marks Silverbacks Holdings ' third sports investment since its launch in 2019, after the Cape Town Tigers and NERGii, a South African sports technology company.

CREATECH

How can tech help scale the Creative industries?

???? That’s the question I asked my panelists at the Moonshot by TechCabal conference That took place in October 9-10 in Lagos.

The tech sector gets a lot of press, but the reality is that 90% of businesses (and by extension of creative businesses) in Africa are SMEs.

?? They look less like Flutterwave and more like your traditional production company, fashion label, publishing house, or equipment rental business.

Most African creative businesses have barely started integrating digital tools, and yet, those could be transformative for the sector, just as they have been for other industries such as health or education.

??On the panel, we were lucky to have two companies that are successfully leveraging technology to open new markets for creatives:?

Filmmakers Mart connects producers and content commissioners such as Netflix and Multichoice with film resources, locations and collaborators on the ground in various countries, using technology to facilitate networking, payment, and project management.

Selar offers tools for creators to sell digital products like e-books, courses, films, and music. By providing easy payment options in various currencies and digital delivery, it enables creatives to reach global customers efficiently.

??We also had two key investors in African CreativeTech companies: IFC - International Finance Corporation (Elom Lassey), which invested in ANKA , and 4DX Ventures Ventures (Harriet Adinkrah), backers of Wowzi , Eksab, Minly and MAKA.

Key takeaways:

? Global platforms like YouTube , Instagram , Spotify , and Netflix , but also homegrown ones like ANKA, have revolutionized distribution and been instrumental in putting African creativity on the map?

? Technology is now enabling new ways to generate revenue, such as advertising on social media content and online stores connected to local payment systems

? Thanks to cheap digital creation and distribution tools, anyone can now make money from their own talent or expertise without any need for intermediaries - this is the new “permissionless economy”

? The Creator Economy will employ millions of young Africans in the next few years. Already, tens of thousands (if not more) people are living off platforms like Selar, Wowzi, and Youtube

? Automation and AI improve workflow, social media campaign management, data analytics, and can even enhance creative processes. In fact, all panelists were optimistic about the impact of AI on creative businesses.

While I am personally bullish on the Creator Economy, there is not a lot of hard data to back up this statement yet.

Thankfully, a new report by Takeout Media, a TM Global Company and David Adeleke has come to plug some of this gap.

In it, we learn that:

?? Africa's Creator Economy is rapidly expanding. Valued at approximately $3.08 billion in 2023, it is projected to grow to $17.84 billion by 2030, with a projected annual growth rate of 28.5%.

???? The majority of African creators are young (96% are between 18-34 years old), with women slightly outnumbering men. This dynamic demographic is shaping the industry's future.

???? 87% of Creators have less than 10k followers, which makes them micro or even nano creators. Half have been in the industry for less than 3 years, and 70% currently earn less than $60 per month. This underscores the nascent nature of this ecosystem.

?? Selling digital products tops the list of how they make money (52.8%). Sponsored content, physical merchandise and ad revenue follow at 19.4%, 13.9% and 12%.

?? Creators’ main areas of interest are Entertainment & Media (53.2%), followed by Fashion & Lifestyle (14.3%) and Technology (13.5%). But there are other niches, such as Finance, Food, or Health and Fitness.

????Instagram and TikTok are the primary platforms but most Creators are betting on YouTube for long-term success.

?? Among the main obstacles to growth include limited monetization options (23.8%) and funding shortages (22.2%), and the same-old, pervasive infrastructural issues (internet access, equipment).?

?? Another challenge comes from platform-specific limitations, such as the lack of integration with local payment methods, and fickle content algorithms that make it difficult to maintain and grow an audience.

One way to solve some of these challenges is through the development of independent platforms or services like the previously mentioned Wowzi and Selar, that work to close the gap between global audiences and Africa-based creators.

?? Another such platform is AMAKA Studio , founded in 2020 by Adaora O as a social publishing platform for Pan-Afrian creators to monetise their creativity through subscriptions and gigs with businesses and brands.?

The company has already worked with blue chip clients such as Nike, YouTube, The Access Bank, ETG & Arise IIP.?

?? Earlier this month, AMAKA announced that it had closed a $2 million seed funding round led by Equitane, alongside Morgan Stanley Inclusive Ventures Lab, Silverbacks Holdings, and a group of angel investors, to grow its Black and African creator platform.

The investment will go towards three core areas:

? Expansion of AMAKA Gigs to allow brands to easily discover, commission, and manage relationships with Black and African creators worldwide?

? Enhance Payment Solutions by integrating digital wallets and accounts

? Targeted Marketing Campaigns to drive user acquisition, activation, and retention.