Africa: Infrastructure

Africa: Infrastructure & opportunity

Rob Arthur explains why most markets in which cinema is underrepresented — notably Africa — are far from the unsophisticated territories many envision. In these markets, cinema will often see the latest technology deployed from the outset — not the upgrade path experienced elsewhere.

WHEN ORGANISING A conference or event, there are always memorable or ground-breaking opportunities. The first ECM Conference, held in Istanbul in late 2018 aimed to deliver a conference that would enable debate,discussion and insights into markets never previously showcased at international film and cinema trade events. Some have referred to them as “the underdogs”, but that’s missing a key global issue: 70% of worldwide economic growth is forecast in emerging markets.

Booming populations and prosperity

The growth in the middle class and urbanisation is taking place at a fast pace; with population growth occurring as a result of longer life expectancy and improved quality of life. Some already large cities in Africa are expected to increase their population by up to 80% by 2025, with 10 cities alone contributing more than US$50billion per annum to the world’s economy. How about some perspective in the context of emerging markets? That’s approximately the equivalent to the total gross domestic product of countries such as Serbia, Azerbaijan or Uzbekistan.

A conference to represent a community

Later this year, the Emerging Cinema Markets conference (19-21 November, www.ecm19.com) will focus on the continent of Africa, Turkey (our host nation) and New Europe (the Balkans and former Soviet states), Central Asia and the Gulf Cooperation Council states. In combination, these states present a market opportunity of 1.7billion people currently served by just 6,850 active cinema screens.

Our aim at the ECM conference is to spotlight market opportunities and discuss the positives and challenges to market entry. Film and cinema development cannot work in isolation from other cultural, country or regional factors. Cinema in emerging markets needs support to overcome significant barriers, which are generally not discussed at other industry gatherings — including investment and development funding and setting up a territory or company for growth.

The conference is turning into a community whose aim is to share common goals; develop cinema infrastructure; and enable growth in each market. #ECMIstanbul aims to shine a light on the prospects, capacity and requirements for emerging cinema markets, and the scale of the under-representation.

Big, but not in box office terms… yet

If we are talking under-representation, then the first place to start is in Africa. Africa is the world’s second largest and second most-populous continent. It covers six per cent of Earth’s total surface area and is home to 20% of its land area. With more than 1.3billion people and a median age of 19.4 years, it accounts for around 16% of the world’s human population, but a nominal amount of the global box office, principally as a result of limited access to cinema screens. As was highlighted by Luis Mota, director at NOS Portugal at last year’s ECM18 conference, their multi-screen operation in Mozambique trades close to 100% occupancy! Some 96% of the available screens in Africa are situated in 15 key growth territories where 62% of the population lives. IMAX, which has seen great success in Africa, has one screen per 93,000,000 people across the continent.

Currently, many African countries have zero cinema infrastructure, and that may still be the case a decade on from now unless the opportunity on the continent is further analysed and subsequently developed. Having attended several gatherings of investors into the African region during the course of the past year, it is striking how many are actively looking toward the continent with a high degree of positivity and optimism.

Those principles are important in Africa as they are in allemerging markets. Emerging cinema markets are moving from being “immature” to highly developed at a rapid pace, and that can take the industry by surprise. They are the new frontier, and their world is different. New territories and new cinemas that use new digital technology blended to global content providers and connected to international supply chains can create new opportunities and possibilities. Laser, LED, HDR, 5G are all on the horizon — not upgrades, but all brand new from day one, and all in the most modern of signature architectural developments, achievements that are rarely possible or deliverable in mature markets.

While each emerging cinema market is unique, there are common goals which enable development of best practice from those with years of experience to those about to join the industry. #ECMIstanbul is about listening, learning and sharing — certainly not about telling. Rob Arthur is founder and director of the ECM Istanbul conference. Find out more at www.ecm19.com

A View from the top Rory Stewart OBE, former UK Department for International Development Secretary

At the Africa Financial Services Investment Conference held in London in May, the UK’s former international development secretary, Rory Stewart, discussed Africa’s growth: “There is a strange sense that you lurch from an incredibly optimistic positive vision of where Africa’s going, to suddenly going to the absolute opposite of people being very gloomy… Clearly in that tension between these two principles, between the incredible potential of Africa and people’s sense of frustrations, is something in the centre of this problem which needs to be unlocked. And part of that problem is the question of how you unlock finance and how you unlock money in the centre of those economies… One in ten children born by 2050 will be Nigerian, potentially by the end of the century as much as 40% of the population in the world could be African. And of course, that means that the labour force that is going to power the global economy potentially by the end of the century will be African, and the consumers who are going to provide the markets for our goods are going to come out of Africa… [Navigating the development path] is going to be about people with experience of a particular country. We’re not kidding ourselves that because you spent a lot of time in Benin you’re suddenly an expert on Zambia. It’s on making sure we trust those people, with the right type of trust, to stick with somebody through changes.

Key differentiators in emerging markets:

Five key differentiators which will enable the success of emerging markets, and that will be a focus of attention at ECM2019 this November are:

1 - MARKETING TO CUSTOMERS Mature markets in Western Europe and North America have an ageing demographic. Emerging markets tend to have a younger population with an appetite for technology and stories. They demand a different approach.

2 - LOCAL CONTENT From Nigeria to the Middle East, there is a burgeoning local content market which is growing in its sophistication.

3 - VALUE AND OPPORTUNITY The price of a cinema ticket is different in emerging markets than in mature markets, but it has to be. Visits per capita are low or non-existent; income levels and infrastructure are sometimes limited; but if the Top 15 territories in Africa can achieve one visit per head of population that will require 6,250 new screens and 625,000 new seats. At a $5 ticket price over $3.5 billion of new box office gross is achievable. Developments have to be high quality but offer value ticket pricing, such as in India and China.

4 - TECHNICAL Technical support usually arrives when there is scale, but to be off screen for a week and unable to afford a simple repair to a sound system because of the cost of the engineering, will have a significant and highly detrimental impact on revenue; consumer and investor confidence. Support in alignment to development is a pre-requisite for growth.

5 - INVESTMENT AND POLITICS The host nation for ECM2019, Turkey is at the forefront of delivering effective legislative policy to secure a better (and less turbulent) market. Film and cinema are essential components to a successful economy. With government support, a higher level of transparency, trust and integrity can also be delivered which enables investment. It is not un-common in Africa or Central Asia, as current examples, for studios to include operators in their booking schedules only on condition of providing auditable nightly returns to ComScore or other authorised box office trackers. Film and Cinema can provide national recognition, a sense of pride and “soft power” for government. The development of infrastructure e.g. film studios; enables a place for stories to be shared in cinemas and provides a creative platform for local language to flourish as is happening in Kazakhstan.