Last week, the news that Wabona, an African content Video On Demand service was closing its doors for good was a low moment for African tech and media startups.
Started in 2012 by Simbarashe Mabasha and Simukayi Mukuna, two Zimbabwean entrepreneurs based in South Africa, Wabona had been trying to carry out the important work of sharing African entertainment and content through the internet.
No reasons have been provided for their shutdown yet, but a number of aspects related to their model have stood out as weaknesses for a while now. These represent most of the challenges in setting up a Pan-African VOD service.
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Operating any sort of startup is a huge challenge, especially if you are entering territories where the disruption you are trying to usher in is on so many levels.
For VOD services in Africa, this is the order of business. There have always been a litany of issues to deal with that include securing content with limited funds that are often bootstrapped, figuring out a business model, identifying a niche segment in a variegated market, fighting a growing list of competitors as well as growing demand across a continent that is largely not connected online.
Looking at Wabona’s operations over the past few years, the VOD startup lived through each of these challenges took them on one after the other, but still had to fold even after putting up an impressive fight. So what went wrong?
Content strategies save content businesses
When it comes to video content distribution, every operator is faced with the gargantuan challenge of acquiring the right amount of content, with ample variety and a decent cycle of renewal.
Wabona went through the same paces and, in the face of concerns around a deficiency in content variety, had even cast a wider net for African content, scouring East, West and Southern Africa for series and movies that would have market appeal.
According to the Wabona team, this Across Africa approach was also meant to offer a point of difference with the most visible African VOD player, iROKOtv, which has a lock on West African content, specifically Nollywood productions.
Throughout all of this, other challenges related to content were also evident. The Wabona team had to deal with the nightmare of acquiring the rights to content (the process is hardly just a phone call and email), as well as finding the right quality of content that people would subscribe for. All this had to accompany the development of relationships with producers ready to meet the demands of contracts in production.
A diaspora-first approach made sense because of the market fundamentals like diaspora disposal income, acceptance of e-commerce as well as VOD entertainment plus cashing in on nostalgia. However, this also meant angling for a market that is inundated with a variety of material, that’s not just from Africa.
The dollars and cents are always an issue
There was also the elephant in the room; establishing a revenue model. In April 2013, Wabona moved from a pay-per-movie model and adopted the subscription based model, selling monthly access to their bouquet for $5,99.
This seemed like a strategic way of ensuring consistent revenue and spreading the costs associated with acquisition across the viewers that they had harvested. It’s the same strategy that MultiChoice has used and it’s offered as an explanation for not having pay-per-view television.
The result should have been more content and faster cycles of renewal. Wabona took on this challenge somewhat seriously, and even before switching to subscription, had made some promises and noted attempts at securing content. Sadly, the result wasn’t as spirited, judging from the shutdown itself.
So what happens next for Wabona?
As a closed startup, Wabona is sitting on a canon of lessons on what works and what doesn’t for a VOD startup. They have worked in production and distribution of content in Africa. After all, the Wabona team was involved in content creation before this attempt at distribution. It’s not crazy to assume that they would give VOD another shot, albeit in another form using the content creation/Netflix approach.
This is the path less traveled by smaller startups because of the huge costs involved in the process. It’s only imaginable for well-financed operations like MultiChoice, that have gone on to offer the sort of support needed through avenues like the Zambexi Magic/ Africa Magic route which was carted through MNet.
Wabona 2.0 could start from there, building on the competencies they have for production plus whatever relationships can be salvaged from combing the continent for content.
As much as they have swam uphill and had to shut down, their failure has been a glimpse of what works in this market. Who knows, with the growth of local content happening in pockets of Africa, and internet becoming more ubiquitous, it just might be a lot easier for Wabona the second time around.