“As a Pan-African broadcaster we want to be the home of premium general entertainment and sports programming, a pay-TV network of distinction and ultimately change the game by offering a truly conversed business model….” stated Joseph Hundah-president and group CEO of Econet media at the launch of Kwese TV in Zambia, 10th February 2017.
“The third-party content providers, on whose content we rely, require payment in foreign currency. With the prevailing economic conditions in Zimbabwe, and the current business operating environment sustaining the Kwese satellite service was no longer viable” read the official statement confirming the closure of Kwese satellite services effective 5th August 2019.
After two years of operation, the Zimbabwean owned pay-TV network formed among other reasons to offer competition to the continent’s biggest and popular pay-TV network south African owned Multichoice popularly known as DSTV was no more. Kwese came in the market with the view of offering competition to the existing networks such as DSTV. The game plan was simple; offer affordable content and target dissatisfied DSTV customers. To its credit, Kwese managed to garner tens of thousands of subscribers across the 12 African countries though very far from the DSTV subscriber base of more than 12million across Africa. But like many other Pay TV networks before it, Kwese could not survive the mass competition from Naspers owned DSTV.
Many factors have been attributed to the failure of Kwese network. A quick analysis may reveal the following as some of those factors;
- Good Supply Vs Bad Demand. To be king in the TV network you need to control demand (content). Kwese had supply (price) on its side but paid the high price of failure in the end. Viewers are more interested in rich content and price basically becomes secondary. Many are times viewers have complained about the “discriminatory price” model of DSTV but how many of those especially in Zambia have actually left the company? Few! Because DSTV has invested heavily in content enrichment from maintaining a stronghold on exclusive broadcast rights of major sports such as European and African football leagues to entertainment such as the Nollywood sector through the Africa Magic and now Zambezi magic is host to some of Zambian movie productions. Inasmuch as Kwese was cheaper in subscription fees compared to DSTV, it lacked rich and diverse content base.
- Lack of financial muscle. In announcing its closure, the company attributed the economic hardships in Zimbabwe as having played a major role. You cannot compete with competitors such as DSTV without a big money vault to rely on. Business economic fundamentals change for the good as well as for the bad. At the end of the day it all comes down to how financially healthy the company is. Naspers the parent company of DSTV has a market capitalization value more than that of the Lusaka stock exchange market. This should tell you how financially strong the company. UK based GTV closed its doors in Zambia and Africa due to the global financial crisis in 2009. DSTV remained open. Where is Strong Zambia today?
- Operation model. Kwese acted as an aggregator of third-party content providers. It relied purely on third parties with no in-house production. This posed two major challenges. First, the third parties were at liberty to negotiate with other aggregators should need arise. Apart from DSTV which other platform offers Supper sport or Zambezi Magic channels? These are exclusively owned directly or indirectly by DSTV. Secondly as explained by the company the third parties were not willing to renegotiate earlier agreed upon payment agreements to assist Kwese effectively manage its financial problems.
For now, DSTV remains King in the Pay-TV arena. Will the Chinese owned star times prove to be the alternative in the near future? Only time and strategy execution will tell. Netflix has indicated its plans to launch on the African Market. Information shared indicates it plans to use DSTV as its carrier. Yes, DSTV will have a complete package on its network- pay TV and movie streaming all in one environment. DSTV has the demand hence any provider will do justice to ride on its platform. Muvi TV Zambia tried to go solo and failed. Diamond TV Zambia and Prime TV Zambia have both benefited heavily in terms of an increase in viewership as a result of riding on the DSTV distribution network. You can have a good business model and still lose out if poorly executed. Go to Nigeria and ask HiTV and TSTV.
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