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Would investing 10% of what Masiyiwa put in Kwese TV into the local film industry have been a better investment?

   
16 comments

Recently, we published an article detailing how Strive Masiyiwa might end up selling as much as 34% of his stake in Liquid Telecom to pay off Econet Media debts valued at just under US$400 million.

At this point it’s clear that Kwese was a COSTLY failure and with the benefit of hindsight it’s easy to criticise Econet Media along with Strive Masiyiwa for buying up content that consumers were not interested in at such high prices.

Since the story of Masiyiwa’s efforts to sale his stake broke out, a number of scenarios have played out in my head where I try to imagine how things could have gone differently…

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“Kwese should’ve gotten EPL rights?”

The most famous alternative scenario is that Econet Media would’ve been better served by getting rights to the English Premier League and the laymen says these alone would have been enough to save Kwese.

I don’t think so. Firstly, acquiring rights to the EPL is an extremely expensive endeavour. In 2016, SuperSport is reported to have paid ¬£296m (US$388m) for EPL rights. That alone is more than Kwese’s currently outstanding US$375m an indicator that they couldn’t afford those rights.

Besides affording the rights, EPL was always out of the question simply because the rights for the sub-saharan African region are held exclusively by MultiChoice. It wasn’t even an option to begin…

Was local the answer?

On its way down, Econet Media committed to making local content. They promised that Kwese Studios would focus its attentions on local productions;

Through Kwesé Studios, Econet Media will invest in developing its own original programming and provide a platform for African producers, script writers, actors and directors to tell authentic African stories on a pan-African broadcast network.

Unfortunately for Kwese Studios (something we were excited about) it was caught up in a burning Econet Media and never really took off. How different would things have been if Strive Masiyiwa had taken his +US$400 million investment in Kwese and just taken 10% of that and invested in Kwese Studios and a similar vision from the word go.

10% of US$400 million is US$40 million which is not pocket change by any means but a huge amount in the context of Zimbabwe. Recently, CookOut – a local produced and filmed movie – made it to Netflix and is being held as one of Zimbabwe’s beacons of pride in film-making.

Discussion around the budget of CookOut erupted on social media and it emerged that the film was made on a budget ranging between US$8 000-$10 000.

Ever heard of Wadiwa Wepamoyo? The hit show that made waves during the first lockdown back in March and has a combined 3.4m views on YouTube (at the time of writing) reportedly took less than US$1000 to make.

State of Malambia which was partly crowdfunded was produced on a US$105 000 budget. Yes, it did go on to flop but that’s besides the point. The point being Zimbabwean film-makers are willing to work within low budgets to realise their lifelong dream of building a local film industry.

Using the budget of US$10 000 as the standard for a project – a US$20 million investment in the local industry would have made more in over 1500+ shows and movies. The other US$20m could have been put to figuring out how to get consumers to pay for this content, how best to deliver this content and marketing etc. The boring business stuff basically.

And at the end of the day, if that had failed, Mr Masiyiwa and Econet Media would have saved over US$300m, whilst the local film industry would be sitting on lessons upon lessons to build on…


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Comments 16

Anonymous
4 months ago

Would Kwese have generated revenue in Zimbabwe thorugh investing in local content? I think Zimbabwe is too small a market to invest millions given the revenue is meagre and it would not be in foreign currency.

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    Royal Mutopa
    4 months ago

    Yes,on a slow note.Zimbabwe film industry currently is within borders,the industry is affected by language.unless if the industry adapt the english language to catch the whole world,then the investment would have been great.

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wokenman
4 months ago

No I don’t think it would. What Zim still lacks is a popper distribution platform: a properly widespread and mainstream one. Kwese was the right idea, just badly executed. But it has to be platform first and the content will follow. However it should have been a simpler platform – cheaper OVHD type decoders, using existing dishes, beaming from that same satellite Intelsat 20 like everybody else – kwete zvekupenga zvavaida kuitisa vanhu. They didn’t even need all that expensive foreign content that nobody really wanted. When they tried to “channel match” DSTV did they even bother to check if DSTV was getting significant viewers on some of those channels? Just old Zim series, local music, movies iwawi ana Neria naana Yellow Card would have been enough: and then build from there. But team yaida zvema shine. DEOD ku TelOne is still kicking with its cheaper, older content – no shine.

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Anonymous
4 months ago

Kwese could have lost money worse. By now they cud have been strugling to make their money back.not because african ontent did not have market. But just that as it is now we wudnt be able able to puy competitively for pay tv

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Eng. Salanny Mhlanga
4 months ago

1. You should have left the question Masiyiwa’s investment options open and not try and “impose” your thoughts on readers. When you put in 10% plus exactly where you thought the money should have been invested, you “guiding” readers to think the way you want, this is poor journalism.

2. PATHETIC shows like like Wadiwa Wepamoyo only become “hits” due to lack of competition. There is almost zero talent, very few actors and the scenes were shot on a very small radius, making it very monotonous. Numbers only don’t tell the full story, I doubt if you actually watched it.

Masiyiwa didn’t do his homework. He relied heavily on “hearsay” about the real challenges and size of pie in that sector. A lit of noise was made about the low cost, “locally” owned bla bla bla.

I NEVER subscribed to kwese for 2 reasons:
1. I value content more than price. Content was pathetic.
2. I don’t buy stale bread from a shop simply because the shop is owned by my fellow “komboni” guy kkkkkkkkkkk.

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    Dred
    4 months ago

    I disagree with you on your 2nd point.

    Your opinion that shows such as Wadiwa Wepamoyo are pathetic is unfounded considering the amount of success the shows have enjoyed with their viewership regardless of the lack of competition. Are there areas where things could have been done differently, yes definitely but the shows themselves prove that it is possible to produce local content on a very tight budget.

    I believe Farai may be on to something with the idea of Strive Masiwa investing in local content from the very get go with a decent budget. At the very least it solves the issue that Wadiwa Wepamoyo was dealing with when they tried to monetize their work as the series went on.

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    Maxwell Christian
    4 months ago

    I also disagree with you on point number 1 & 2. The Journalist is just brainstorming options, there is nothing wrong with his point of view as we all have different points of view, some bankable some not so or at all bankable. Even Court Judges (who depart from the letter of the law to support the Establishment) and politicians also impose their views on us and we either reject them or accept them partially or hook line and sinker. Yourself as an Engineer, maybe, you could have said let’s invest the 10% on an electronic telecommunications engineering venture to reduce congestion and improve connectivity on the Econet & Ecocash network. On the second point of the film being poor, etc, with respect, that is just your opinion and the opinions of others as well and is immaterial to those who think it’s good. If 3.2 million people like the Wadiwa Wepamoyo poor monotonous film, then that poor thing is best for them, whether with or without competition. The producers of Wadiwa Wepamoyo simply produced it at the right or opportune time and they hit the jackpot! Such is life. If you had run for the position of MP on an MDC ticket when it was formed in urban area around, you could have made it as MP – time and chance happen to all, [and sometimes] the race is not unto the swift or the talanted who do not convert their thoughts into action or tangibles!

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    Leopold
    4 months ago

    Kkkkk well said .

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    Leopold
    4 months ago

    So what should be done now ? You have exhausted all the points on what went wrong & what should have been done
    Lets get to the solution to save or Raise the Zim Film industry . Surely something can be done

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    Anonymous
    4 months ago

    I disagree on Mudiwa Wepamoyo. That series was a hit numbers dont lie. Its like hating on Macheso that he has poor sound engeneering and has a bad voice – yet that’s the stuff majority like and would go pay pa show to see macheso than hv an Ex q who u might say hv great soind engeneering

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Jones
4 months ago

Investment appraisal or evaluation is based on future cash flows value in today’s terms. So the decision is based on what future cash flows will be gained from investing $40m today in Zimbabwe’s unfortunately virtually insignificant local arts market. The funding for these projects don’t actually come from Masiyiwa’s bank account. They are financed by investors who will demand justifications for investing such a huge sum. So what future cash flows would be expected from investing US$40m to literally start an entire industry from scratch?

This is a very tricky industry, forget the market. There has to be a demand that justifies the investment. So for instance major $ has been invested in Nigerian film and television as well as South Africa. Why? These markets and industry have been enthusiastically built by the societies there over many years and gradually. Remember the old “African” movies with super poor quality but which generated huge followings in Nigeria FIRST then started spreading underground throughout Africa.

By the time the likes of Multichoice started to invest the markets had developed and the enthusiasm was established and permanent which guaranteed significant future cash flows. Same with RSA market. From the Gods Must be crazy, Shaka Zulu to Yizo Yizo and Generations, these countries have supported their arts with national enthusiasm which attracts regional curiosity which translates to regional enthusiasm leading to guaranteed future revenues. This is what investment funds are attracted to. Nothing else other than the likelihood of future cash flows. And $40m today is worth way more than $40m in the distant future, so the risk of dumping $40m now which you could invest in more profitable causes vs a totally weak prospect, is unattractive and the funds would demand an even higher rate for that risk.

In Zim, we don’t value anything local in general. It took Jonathan Moyo’s crazy 100% local content to force people to consume local. It was never an enthusiastic fever. And I don’t mean “authorities”, I mean the actual people of Zimbabwe don’t support local as crazy as South Africans, Indians, Americans,Koreans or Nigerians. So how does Masiyiwa pitch the investment proposal to Investors? I think that was the issue. It would have been an even more disastrous investment in my opinion.

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Simba
4 months ago

It would never work. People are very used to free/pirated media in zimbabwe. Every person i know in zim watches many dhows and movies, but had never paid for content. Honestly, no service would make it without a serious shift in the current culture around media.

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Imi vanhu musadaro
4 months ago

“hit” shows? I’ll skip that debate today. The author has a misconstrued multiplier effect. A “hit” show costs 10k, therefore 20m = 1000 hit shows on the market. You apply such math to making bricks, not producing creative content.

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Mdulababy
4 months ago

Investing in local film would equally have proved to be a challenge because of the political instability and policy inconsistency from the government. Our government has so much appetite for controlling anything and everything. As soon as they felt some of the film content is political they would interfere or when the industry starts to grow they interfere simply because they want a cut.

Investing in Zimbabwe is very difficult in the current environment

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G
4 months ago

Just imagine the impact of Kwese TV on Zimbabwe’s film industry if Masiyiwa had gone the cheaper & more effective route of investing in content creators who are already in Zimbabwe.

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Sagitarr
4 months ago

Econet has dabbled in local projects before including sponsoring PL soccer, and ended up pulling out because, whilst there are many people eager to take on sponsorship, there aren’t as many of those who are also eager to produce transparent, traceable, auditable usage of such sponsorship. That is the culture that should be changed in Zimbabwe for us to develop. It’s the mindset really which is an obstacle imho. People should be demanding that the govt be spearheading such initiatives since they seem to “know everything”, they’re the ones who promised to create millions of jobs and should be put into a corner everyday until they deliver.

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