TV households grew at a compound annual growth rate of 3.6% in the same seven-year period, while overall the number of Sub Saharan households grew by 21.8%.
Development of over-the-top (OTT) video services lag behind the rest of the world, and in 2017 there were just over 500,000 OTT subscriptions — excluding multiscreen services — across the region.
This figure included those in South Africa, which is the largest pay-TV market in the region, Subscribers there have doubled, growing from 3.6 million in 2010 to 7.1 million in 2017, while revenue grew at 15.2% CAGR during the same period.
Although the most developed and lucrative pay-TV market, South Africa is the least competitive in Sub Saharan Africa. Its 30 year-old direct-to-home (DTH) satellite service DStv from MultiChoice, controls over 93% of the market, in terms of both subscribers and revenue.
Overall, IHS researchers said: “The Sub-Saharan African TV and online video market is full of hopes and promises for the near future. Both markets are underdeveloped and, in the case of online video, at a very nascent stage of development. However, recent data from IHS Markit clearly points to strong growth”.
“Pay-TV growth is closely linked with the state of the economy, and particularly with the disposable income of families. According to IHS Markit, between 2010 and 2017, gross domestic product per-capita across Sub-Saharan Africa increased 19.1%, while the per-capita disposable income rose by 25.5% during the same seven-year period. Consumer spending on goods and services, a crucial factor for pay TV growth, has increased by 20.3% over the same period.”
However, a range of factors are limiting the market’s growth, most notably: a lack of infrastructure; relatively high access costs; volatile exchange rates; diversity of audiences in terms of language; and stringent regulation.
In addition, the growth of low-priced digital terrestrial television (DTT) services at the expense of incumbent DTT platforms has contributed to a significant decrease in the proportion of consumer entertainment spending, said IHS Markit.