From 'Avengers: Ultron' to 'Mad Max: Fury Road': Why Hollywood Is Hot on South Africa
High-profile film shoots have caught the industry's attention — now media giants such as Viacom and Fox are expanding their TV business from Johannesburg. But is the African continent ready for the big leagues?
This story first appeared in the May 15 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Move over, Mad Max. While South Africa regularly generates buzz as a shooting destination for such hotly anticipated Hollywood tentpoles as The Avengers: Age of Ultron and Mad Max: Fury Road, the picturesque African nation also has become the preferred base of operations for global entertainment giants hoping to crack the massive — and rapidly maturing — African market.
Viacom is leading the pack. Through its Viacom International Media Networks unit and its Africa arm, the entertainment company has been active in the market for the past decade, but has been expanding in particularly active fashion as of late. It launched a localized version of BET this year just months after bringing Nick Jr. and Nicktoons to the continent in September. The networks joined MTV, MTV Base, MTV Portugal (for the Portuguese-speaking parts of Africa, such as Angola and Mozambique), Comedy Central, VH1 Classic, Nickelodeon and what is now BET2 (formerly BET International).
Including channels offered on the continent beyond the big ones run by its Africa unit and separately counting both feeds of MTV Base (one for South Africa and the other for the rest of Africa), Viacom offers 15 networks in Africa.
Other U.S. media giants also have built a presence in Africa as industry players have seen the large population and growing middle class — along with strong economic growth — as opportunities.
21st Century Fox's Fox International Channels, which also has an office in Johannesburg, says it currently distributes 10 pay TV channel brands on the continent (Fox, Fox Crime, Fox Movies, FX, National Geographic Channel, Nat Geo Wild, National Geographic Gold, Fox Sports, Fox Sports 2 and Baby TV).
Discovery, which runs its international business out of London, says it has seven pay TV channels in Africa (Discovery Channel, Animal Planet, Discovery Science, Discovery World, ID Investigation Discovery, TLC Entertainment and Eurosport News).
Disney, which also has an office in South Africa, offers such networks on the continent as Disney Channel and Disney Junior. And NBCUniversal's South Africa channels business is managed from NBCU International’s London headquarters, with much of the team based there, but the company also has in-territory marketing and ad sales support in Johannesburg. Its African channel brands are Universal Channel, Studio Universal, E! Entertainment Television and Telemundo.
Long before he became Jon Stewart’s 'Daily Show' replacement, Johannesburg native Trevor Noah appeared on the African version of Comedy Central.
Hollywood companies also license their content to African TV networks and digital players.
With more than 1 billion people to serve, all this activity has led some to compare the race to expand international companies' presence in Africa to the gold rush into China's massive market.
For Viacom — which launched its first African network in 2005 and boasts the most comprehensive channel portfolio out of all international media companies on the continent, with its brands available to more than 100 million viewers in 52 territories — South Africa is its base and key to cracking the continent's pay TV potential.
"South Africa really was and still is the center of pay TV in Africa," says Viacom International Media Networks CEO Bob Bakish. "It makes sense to run our Africa business out of there. But as things have continued to evolve, a couple of years ago we also opened an office in Lagos, Nigeria. That is the largest ad market in Africa and a place where we are spending more time as we grow our business."
Adds Alex Okosi, senior vice president and managing director of VIMN Africa: "We have a pan-African proposition across our brands, but South Africa is our anchor."
The business has come a long way over the past decade, says Okosi who put together the initial Africa launch plans and started the company’s first African network, which included a live concert with Will Smith.
For management at the time, “the real key" was to "make sure we showcase content that made sense" and "to articulate how to make it commercially viable," he tells THR. "We took a two-pronged approach with revenue from pay TV platform [fees], and we also wanted to extract advertising. The African pay TV market has grown exponentially since we launched, but initially, affiliate revenue was not enough to carry everything."
The company's staff in Africa has grown over the past decade. Viacom now has 60 employees in Johannesburg and 15 in Nigeria as it has in recent years started to look for further growth in Africa from its base in South Africa.
"Africa has reached a point where we see a huge number of opportunities," explains Raffaele Annecchino, managing director and executive vice president, VIMN South Europe, Middle East and Africa. "There is an explosion in the pay TV market, growing Internet penetration and there are 300 million mobile users. For Viacom and its multi-platform culture, that is a big opportunity."
Where will the company look for growth? "We have launched new channels, and there is more opportunity to launch new brands," he says. "New markets are also an opportunity. And growth will also come in advertising and sponsorship."
The MTV Base soap opera 'Shuga' helped raise awareness of HIV.
Viacom isn't the only media behemoth looking for growth on the continent. "Africa is a strategic market for Fox International Channels with a robust portfolio of Fox and National Geographic brands distributed by our affiliate partners across the continent," says Adam Theiler, executive vice president of Fox International Channels Southern Europe and Africa. "We are looking forward to introducing new Fox branded sports and general entertainment channels as well as developing content locally in key markets in South, East and West Africa."
Kasia Kieli, president and managing director of Discovery Networks Central & Eastern Europe, Middle East and Africa, agrees. "The region has been an exciting and key growth market for the business," she says. "Discovery is continuing to invest in its African portfolio, including the launch of a dedicated African feed for TLC Entertainment in 2013, which is currently the number-one lifestyle channel in South Africa and features a successful block of OWN programming." Discovery also is turning its focus to producing more local content filmed across the continent. Kieli says the company is planning several wildlife series on Animal Planet, as well as a campaign on TLC to find its first local presenter. And she says: "Discovery recently hired a commercial director for Africa who, based in Johannesburg, will be responsible for facilitating further growth."
Viacom's Africa business also has invested more in local content, and it has helped develop local talents who later would emerge as international breakout stars. Years before she won a best supporting actress Oscar for her role in 12 Years a Slave, Lupita Nyong'o heated up MTV Base in steamy soap opera Shuga, which helped raise awareness of HIV. And Comedy Central on the continent featured comedian Trevor Noah well before he was named Jon Stewart's successor on the Viacom network's The Daily Show at the end of March.
"We are not trying to develop talent for the U.S.," says Bakish. "It's not about creating a farm system, but by going and finding the best talent we can, it's not at all surprising to me that these people have gone on to do other incredible work."
Amid its expansion of channels, Viacom has started to order more original content developed in Africa. The new BET service, for one, has been airing its first local production, Top Actor SA, from producer Samad Davis.
"Over the years, BET has grown and evolved, and I am delighted to be involved with the brand as it entrenches its position on the African continent with this localized service," says Davis.
Flagship events are a key focus for Viacom in Africa as they are elsewhere in the world. For example, Comedy Central is putting on roasts. And last year, MTV brought back the MTV Africa Music Awards (MAMAs) after a three-year hiatus and gave it a global push. The event, hosted by Marlon Wayans, took place in Durban and rewarded achievement in 18 different categories, including music and Iifestyle. The show featured performances from Trey Songz, Miguel and French Montana. And Nyong’o thanked the audience for the award for Personality of the Year via a video clip.
Lupita Nyong’o, who was raised in Kenya, got her start on MTV Base’s 'Shuga.' In June, she was honored with a Personality of the Year award at the MTV Africa Music Awards.
With such events, MTV and other Viacom channels have been key partners for homegrown African talent in music and comedy. "They have broken barriers in and across Africa and I am happy to say I have been a part of that journey from the very beginning as my video "African Queen" was the first to be played on MTV Base when it launched in Africa," said Nigerian music star 2face. "MTV Base events and shows are usually the biggest events in Africa and I am pleased that I have been able to perform at some of them, including the MAMAs and the MTV Africa All Stars concerts."
Audiences and pay TV partners also enjoy the big events. "In this region, Viacom is known for its exceptional events and ongoing interaction with audiences," said Aleta Alberts, head of content at Africa’s largest pay TV company MultiChoice in explaining the appeal of the firm’s networks "that span various genres and demographics."
Amid all the growth in Africa, some industry executives acknowledge that some long-term challenges remain though. Africa is still an enigma to many in the West, and it can evoke concerns from foreigners, whether they come as private citizens or for business. Safety is still an issue and frustrations with a lack of infrastructure are common. Government regulation (or the lack thereof), social inequality and institutional corruption also are high on the list of complaints from foreigners attempting to do business in Africa.
But Viacom executives say they have no concerns, emphasizing that the company's track record on the continent and its local presence ensure a strong understanding of the market. Says Okosi: "For us, there is no major challenge." He and Bakish say many first-time visitors are positively surprised. "A lot of people will be surprised to learn how significant things such as pay TV usage are," says Bakish. "There are real economies down there, there is a real middle class spending real money. People may have a stereotypical view of it as an emerging market."
He adds: "You are seeing real economic growth [in Africa]. We saw an opportunity to really serve the market on a larger level over the last couple of years … so we continue to allocate more resources to the market."
Overall, Viacom's executive team still sees plenty of upside for the company's business in South Africa and the broader continent.
"Viacom decided to invest in Africa 10 years ago as a first mover," says Annecchino. "We benefit from our leadership position because of that and can build on that."
Adds Bakish: "There is opportunity all around the world. But one of the powerful dynamics is putting capital into markets that have the strongest growth prospects. When you look at that, you have to put Africa in the top tier of market opportunities. That makes it a priority for us."