Restless Global - Africa Strategic Advisory and Content Development

Canal+ acquires minority stake in Senegalese producer Marodi TV

Happy 🥚Easter and ☪️ Ramandan to those celebrating.

In March, Canal+ continued its African acquisition spree as it waited for Multichoice’s board to respond to its revised offer. The answer should come any day now - fasten your seatbelt.

In this edition of HUSTLE & FLOW, I also talk about Netflix’s 3rd African market: Kenya; Invention Studios and NISK Capital new film fund Anansi; how Portuguese-speaking content creators are looking for gold in Brazil; on-going investments in textile production; and leveraging the rare expertise of Africa’s Family Offices.

Read on 👇and don’t forget to subscribe 👉 https://lnkd.in/drBY8jnz

FILM

🇰🇪 I just came back from Nairobi where I was invited by the Kenya Film Commission (KFC) to speak at the 13th edition of the Kalasha International Film Market and Festival - an opportunity for me to spotlight a country that I called home for 10 years.

🎥 This year’s theme for the Kalasha was ‘Reel Money in the Business of Film’ under the tagline ‘Where Art meets Commerce’, and the message was clear: the only way for Kenya to develop a sustainable film industry is to produce creative content that sells.

This is quite a mindset shift in a country where media production was for a very long time largely bankrolled by international donors and NGOs. Indeed, when I launched ‘The XYZ Show’ in 2009, donor money was the only type of funding available for independent content production.

So, here’s what you should know about the Kenyan film industry in 2024:

🧐 In November last year, Kenya launched what I believe (and please correct me if I’m wrong) is Africa’s first Film Industry Satellite account (FISA). A satellite account isolates a certain sector of economic activity to measure its total economic output as well as total employment. Hard data on the Creative Industries is severely lacking in Africa, so FISA is positioning Kenya as a pioneer on that topic.

📊 According to the report, in 2022 the Kenyan film and broadcast industry contributed $659M Gross Output Value and $298M Gross Value Added to the country’s GDP (0.4%).

💼 It also employed 44,062 people (29,635 in film / 14,427 in broadcasting) in 2022.

🦓 Even without film incentives, Kenya has long been a top filming destination for Hollywood and foreign productions looking for an “African look”, such as ‘The Constant Gardener’ or ‘Out of Africa’.

🥉Despite being often overshadowed by the bigger and more dynamic markets of Nigeria and South Africa, Kenya is one of only 3 sub-Saharan African countries in which Netflix has started commissioning original content.

Netflix’s Kenyan originals include ‘Disconnect’ 1 and 2, and the recently-released ‘Volume’, all by Tosh Gitonga, and the series ‘Country Queen’, co-funded by Germany.

🏆 Other famous, award-winning Kenyan films include ‘Rafiki’ by Wanuri Kahiu, ‘Nairobi Half Life’ by Tosh Gitonga, ‘Kati Kati’ by Mbithi Masya, ‘Supa Modo’ by Likarion Wainaina, and ‘Softie’ by Sam Soko.

⚠️ Kenyan filmmakers are generally recognized for their technical skills, however Kenyan content struggles to draw large audiences locally - an anomaly mostly due to cultural and historical reasons (as well as to limited distribution options) that the Kenya Film Commission intends to address through audience-building initiatives.

💡Another initiative that is likely to impact the status of Kenya on the global film stage is the recent partnership announcement between Hollywood’s Invention Studios, run by high-profile writer-producer Nicky Weinstock, and Nairobi-based NISK Capital, to launch the Anansi Film Fund, a new vehicle that aims to finance premium African content for the world.

Several of the projects on Anansi’s development slate are set in Kenya, to be written and directed by Kenyan filmmakers.

😎 What distinguishes Anansi from other similar film funds is the profile of Nicky Weinstock himself.

Weinstock is a pure Hollywood Insider, with a 20-year experience working closely with A-lister Jude Apatow, Peter Chernin and Ben Stiller on movies such as ‘Bridesmaids’ and ‘Total Recall’.

But more surprisingly perhaps, Weinstock also has a deep personal connection with the continent through the years he spent living across West, East and Southern Africa as a young man.

🇺🇸 He seems uniquely positioned to do what no one has managed to do yet: bridge the gap between Africa and Hollywood.

CREATOR ECONOMY

🌍 Sixty million people live in the 6 countries that make up Portuguese-speaking Africa (Angola, Cape Verde, Mozambique, Guinea-Bissau, Sao Tome and Principe, and, since 2011, mostly Spanish-speaking Equatorial Guinea).

And yet, they are rarely part of the conversation around the Creative Industries -- the language barrier is still hard to breach.

But of course, that doesn’t mean that nothing is happening in the Lusophone world.

🇧🇷 In a recent article, Rest of World highlights how Portuguese-speaking African creators are moving to Brazil, home to a thriving creator economy.

🤯 Rest of World found over a dozen African creators who are making content from Brazil — the largest Portuguese-speaking country in the world, with the fifth-biggest social media market of more than 165 million users, and a mind-blowing 20 million people making money in the creator economy.

Several factors explain Brazil’s attraction for African creators:

📊 With $1.92 trillion in GDP, Brazil is a giant by African standards. As a comparison, Angola, the largest Lusophone African country, has a GDP of $107 billion (18 times less).

📱The low cost of data in Brazil, where 1GB costs 40 cents (vs $1.01 in Angola and $2.72 in Guinea-Bissau), means that it’s easier for popular creators to reach a massive audience.

🛠 Higher CPM (cost per million views) in Brazil makes it easier to monetize that audience, combined with the broader list of monetizing tools which are available there compared to Africa.

These include Gifts, that allows fans to send money to creators’ Instagram reels; Stars, which are awarded by fans to creators and can be redeemed for cash; and Live Badges, which let creators receive money from their fans and communities during a live broadcast.

🤝 And finally, a bigger market also means more brand partnerships opportunities for more creators.

Angolan creator Baptista Miranda, who moved to Brazil in 2022, summed it up this way: “We think of Brazil as the country where things happen. I’ve always said it’s Hollywood for Angolan people.”

TEXTILE PRODUCTION

Limited local textile production capacity is a key bottleneck to the development of the African Fashion industry, as it forces African designers to import fabrics from abroad or even delocalize their entire production.

🧑🏿‍🌾This situation makes even less sense knowing that the continent is home to some of the world’s top cotton producers.

In fact, West Africa (more specifically the C4+1 Group: Benin, Burkina Faso, Mali, Chad + Ivory Coast) is the only region on the continent that is NOT a net exporter of textiles.

If the region could transform its raw products into processed and finished garments, it could become a production hub for the rest of the continent.

However, there are some bright spots. Birimian Ventures recently highlighted some projects that are moving the industry in the right direction:

🏭 Panafrican group Arise Integrated Industrial Platforms (Arise IIP) is building local industrial zones that include textile parks in Togo (PIA - Plateforme Industrielle d'Adétikopé, the biggest West African textile park and garment training center), Ivory Coast and Benin.

🧵In Rwanda, Pink Mango Group and C&D Products Rwanda Co. Ltd partnered to build a 24,000-square-foot factory producing for high street retailers such as DKNY, Tommy Hilfiger, Calvin Klein, and supermarkets Aldi and Tesco. The facility, which opened in 2019 with the support of the Rwandan government, already employs 4,600 people.

⚽️ These new production hubs create unprecedented market opportunities. A few weeks ago, FIFA announced its decision to outsource the supply of some 2026 World Cup's jerseys to the C4+1 group in partnership with the World Trade Organization.

According to FIFA president Gianni Infantino, global football sales exceed $270 billion, 70% of which come from Europe alone. With Africa stepping up, global sales could hit $500 billion. "We need to bring some of this money back to Africa”, said WTO Director-General Ngozi Okonjo-Iweala.

PAY TV

French operator Canal+ continues its Africa expansion by acquiring a stake in Senegalese production company Marodi TV.

💡Founded by Serigne ‘Mass’ Ndour, a former IBM engineer trained at Telecom Paris, Marodi is one of the most interesting success stories in African media. And it took Mass 12 years to get there.

Here’s how:

Mass initially launched Marodi TV in 2012 as a VOD platform hosting local content sourced from Senegalese TV stations.

💸 The content quickly proved popular, and by 2015 the platform was racking up 1M views per month. However, due to bandwidth, software development, maintenance and content costs, Marodi was losing money.

🌐 So in 2015, Mass made the decision to migrate the Marodi community to YouTube. At the time (and still today), Senegal was one of only a few African countries were YouTube monetization was enabled - and this proved a key determinant in Marodi’s ability to independently finance its content.

Indeed, in the same year Marodi also started investing in the production of original series, leveraging the user data collected over its first few years of operation to tailor the content to the tastes of the Senegalese audience.

Marodi’s first original series, which quickly gained a strong following, were distributed both on television and on YouTube and financed through two main sources: direct brand sponsorship or product placements, and YouTube advertising.

🤯 In 2018, Marodi’s series ‘Maîtresse d’un homme marié’ became a smash hit in Senegal and beyond, gaining more than 4.8 million subscribers on YouTube.

Canal+ licensed the series for its local channel A+, opening a third revenue stream for Marodi and dubbing the content to facilitate its distribution across the region. Amazon Prime also acquired the series. Marodi started its own in-house advertising agency, which became the business’ 4th source of revenue.

📈 Since then, Marodi has perfected its model. In 2023, the company produced 4 to 5 series in parallel, reaching 5,3M subscribers on YouTube, and employing 150 staff and 200 actors per month.

The new investment by Canal+ will allow Marodi to continue to expand the quality and volume of its productions, and to venture into regional and international co-productions.

🇫🇷 Over the years, Vivendi-owned Canal+ has developed an interest in Africa and has ever since been expanding. For the French pay TV operator, Africa is the future and home to 8.1M of its 26.4M global subscribers.

The group recently acquired production companies like Rok Studios in Nigeria, Plan A in Ivory Coast, and Zacu in Rwanda, as well as Ethiopian channel Kana TV. All together, Canal+ now produces 4,000 hours of African content every year, distributed across 30 channels dedicated to the continent in 10 languages.

🦍 The next step is for the group to confirm its acquisition of the remaining shares it doesn't already own in 500-pound gorilla Multichoice, and its 21.6M subscribers.

Canal+, which started building a position in Multichoice in 2020, is now the company’s largest single shareholder with just over 35% ownership -- triggering a mandatory takeover offer.

After its first proposal was rejected by Multichoice, Canal+ upped its price to $1.77B, for a total valuation of about $33.7B.

As Multichoice’s board is reviewing the new offer, the African audiovisual industry is holding its collective breath.

🤼 A takeover of the South African pay TV operator and its streaming service Showmax by Canal+ would mean that the number of solid buyers for African content would dwindle from an already paltry 3 to only 2 - leaving the combined Canal+Multichoice to battle it out with Netflix.

But in reality, it’s a matter of when, not if.

Sure, Multichoice’s shareholders can still reject the offer. But the absorption of Multichoice is a key step in the international expansion strategy of Canal+’s owner Vivendi, a media group known for its mastery of corporate tactics such as mergers, acquisitions, but also… hostile takeovers.

FINANCING THE CREATIVE INDUSTRIES

Late last February, I attended and spoke at the Alea Africa Family Office Summit in Cape Town.

✈️ I am very selective with my travel and speaking engagements these days, so why did I choose to cross the entire continent for this event?

Because if there is one group of people that definitely knows how to make money in Africa, it’s the entrepreneurs running family-owned businesses (FOB).

🥇And it’s not just me saying it. According to research from McKinsey, family businesses outperform all other types of businesses globally.

Some of Africa’s best known family businesses include Nigeria’s Dangote Industries and Conoil (Glo, Sterling Bank), South Africa’s Pick n’ Pay, or Tanzania’s MeTL Group.

Many others are not on your radar - companies such as Egypt’s Orientals Weavers Group, one of the largest carpet manufacturers in the world with revenues of $600 million/year.

💡McKinsey identified 4 key mindsets that distinguish the highest-performing FOBs:

They put purpose beyond profits
They have a long-term view and emphasis on reinvesting in the business
They take a conservative and cautious stance on finances
They have processes that allow for efficient decision making

They are also great at diversifying their portfolio, are excellent operators, and have a relentless focus on talent.

📈 Once FOBs decide to launch their own Family Office or Fund, the same values typically also make them very astute investors. Ones that, contrary to many VC firms, are actually able to help with operational expertise and not just money. They don’t always need to exit, and they keep value and ownership on the continent.

💫 Many FOBs have portfolios that include hospitality, consumer products manufacturing and distribution, media, or telecom assets that they have scaled across the continent. Many have mentoring programs for young entrepreneurs. And many are already ardent supporters of the arts through their philanthropic foundations.

It doesn’t much to imagine the wealth of knowledge that they could bring to Creative Sector companies.