Kenya's online content business expands

Businesses are looking for new revenue opportunities online

The availability of fast, affordable Internet connectivity, rising awareness of options for tech businesses and an ambiguous regulatory framework has allowed Kenya's online content business to blossom.

Video on demand seems to be a favorable choice for organizations with existing capital reserves or those backed by venture capitalists while applications providing African traditional knowledge through tablets and mobile phones are growing.

Safaricom, the largest mobile services provider in the country, and Liquid Telecom, one of the oldest and largest ISPs, have already launched online TV services, while Able Wireless, a VC-backed content provider, is seeking to wrestle the market from the two giants through affordable online streaming services.

"Able Wireless is providing Kenya's first affordable online streaming services, allowing the users to take control of what they watch and when they watch, at a cost of $8 per month on the basic package," said Kahenya Kamunyu, Able Wireless founder and CEO.

The online platform developed by Able comes with customer premises equipment known as a "black box" that connects to a nearby base station and allows the user to access a repository of online videos. The service uses infrastructure set up by other ISPs and a revenue-sharing model has been designed. In areas with no existing connectivity, Able Wireless is working with newer Wi-Fi providers to offer the service.

"We are already working with established ISPs in some of the areas while in others we are working with smaller wireless providers to serve more people; the service is working well and we are sure it will get better," added Kamunyu.

On its part, Safaricom is buoyed by growing revenue from SMS and mobile data and is hoping that online TV content will push more people to consume more data.

"We expect major growth in the content business mainly supported by local content industry in the areas of entertainment; increased penetration of affordable smartphones, new technologies like LTE and the digital migration will be anchor pillars to this growth," said Nzioka Waita, Safaricom corporate affairs director.

Safaricom launched its "Web box" service in 2011. The box allows users to transform their TVs into PCs and carry out normal unctions as they would on a PC or laptop. The online TV service aims to take advantage of massive infrastructure investments and keep consumers within the Safaricom network.

In addition to such large companies, there are smaller businesses like Afrokidz, a software publisher that develops African- themed innovative mobile and tablet applications for children and families. The company packages African oral narratives in a fun and exciting way for children or adults who want to know more about African traditions.

"Our African cultural traditions are mainly oral and were passed from one generation to the other through stories and songs; urbanization has greatly affected how this knowledge is passed and we are using technology to ensure that this valuable information is preserved," said Njeri Wangari, founder and CEO of Afrokidz.

The Safari Tales App provides folk tales, poems, tongue twisters, songs, proverbs and idioms, among other traditional forms of story telling. The app also allows users to learn Kiswahili.

Safari Tales was funded by individuals, family and friends, and it took two years to develop, a challenge Wangari attributes to funding constraints and the lack of a technology company willing to see the vision and commit the time it takes to develop it.

"When I first mentioned a mobile app to illustrators in the publishing industry, they had no idea what I was talking about, the same happened with the team of story tellers that I worked with to develop the first batch of 15 narratives," Wangari said." "I had to look for other apps that were doing something almost similar to what we wanted to achieve in order to make my point," added Wangari, whose background is in publishing and technology.

Investors in this sector are a somewhat lucky, because the Communications Commission of Kenya has not developed any framework for online content distribution. Currently, the policy addresses broadcast content and has regulations relating and affecting broadcasters. Investors in online video on-demand services are not required to obtain licenses or seek approval for their business.

The migration from analog to digital TV later this month is expected to free up spectrum as part of the so-called "digital dividend." There is no policy on how the digital dividend will be subdivided but it is expected that smaller players will be allocated frequencies for last mile connectivity, especially in rural and economically unattractive areas.

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