Dear colleagues and friends,
How is the year starting out for you?
On my side, after an Omicron-flavored December, I am now feeling some NYE (New Year Energy). Indeed, the first few days of 2022 have already brought us big news in the African entertainment space - a good omen for what’s to come.
I now keep track of these announcements in real time on LinkedIn -- follow me there to make sure you don’t miss out.
With HUSTLE & FLOW now dedicated to in-depth opinion and analysis, I am starting this new year with my Top 3 Totally Subjective Trends for 2022. As a bonus, I’m also throwing in my thoughts on the main and most urgent challenge for the African creative and sports industries going forward.
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Happy reading,
Marie
MY TOP 3 TRENDS FOR 2022
1. MONETIZING AFRICA’S CREATIVE ECONOMY
If the first two years of the pandemic have shown us that digital content was King (remember the explosion of online concerts, endless Zoom conferences, IG Live DJ sets, Nollywood Netflix binges, 3D fashion shows, and record-breaking virtual art auctions), 2022 will be the year where platforms and entrepreneurs get serious about monetizing the millions of eyeballs behind these flickering screens.
The first players to board the train were, of course, Meta (the Company Previously Known as Facebook - also owner of Instagram and Whatsapp for those sleeping at the back), YouTube, and TikTok. The pandemic fast-tracked the social media giants’ plans to deploy monetization features that were already available elsewhere across Africa. These moves have set in motion a major shift by suddenly allowing African entrepreneurs and creators to bypass a certain category of gatekeepers and earn directly from their work.
Making this possible from a technical standpoint is the mushrooming of local fintech solutions, with African startups in the sector raising a whopping $3B in 2021. My prediction for 2022 is that we will see the emergence of various companies focused more specifically on helping creators connect with and monetize their audience. This new segment of the market already includes Wowzi (Kenya), Selar (Nigeria), Minly (Egypt), StarNews (Ivory Coast), but also ANKA (formerly Afrikrea, Ivory Coast), the creative-focused e-commerce platform which just raised $6.2M.
Finally, we will be entering a whole new realm of possibilities this year with the global mainstreaming of blockchain technology, cryptocurrency, and NFTs, and the reflection around Web3. If I lost you here, don’t panic. Future Africa has a great explainer about what these innovations could mean for the continent and its creators. Africa, and more specifically Nigeria, already counts some of the most active crypto and NFT communities in the world. In November 2021, leading art fair ArtX Lagos, led by the always-visionary Tokini Peterside, held a special NFT exhibition and sale in partnership with digital art marketplace SuperRare, featuring among others star Nigerian digital artist Osinachi. This is just the beginning.
2. THE AMERICANS ARE COMING
The first month of the year has brought us three major news: Amazon Prime Video’s entry into the Nigerian market through licensing deals with prominent Nollywood production companies Inkblot and Anthill; Warner Music Group’s acquisition of music distributor Africori, and Andreesen Horowitz’ first African investment in gaming publisher Carry1st (alongside Google and the rapper Nas).
Spurred both by the Black Lives Matter movement and by the imperative to find new growth markets, Hollywood companies started partnering with African creators a couple years ago. Disney is producing sci-fi series Iwájú with Kugali, and the feature film Greek Freak about Greek-Nigerian NBA star Giannis Antetokounmpo, directed by Nigerian director Akin Omotoso. The studio also picked up the rights to several other African animation projects. Disney+, which is expected to launch on the continent later this year, is already predicted to sign up 3.1 million subscribers by 2026. Also notable on the content side are Nigeria’s EbonyLife Media’s numerous development deals with international studios.
All these announcements have led The Hollywood Reporter to proclaim that the streamers were (finally) investing in Africa, but this is just the tip of the iceberg as the volume of conversation going on privately is much bigger. This new interest for the African entertainment space also does not only come from American players. China has been making its own chess moves, most recently with the strategic sponsorship of the on-going African Cup of Nations by TikTok and crypto exchange Binance, companies both founded and led by Chinese CEOs.
As I told Quartz last week, the good news is that experienced entertainment providers with global reach will help grow African talent and intellectual property worldwide. However, it is important for the future of the continent’s creative industries that the IP remains at least partially owned by its African creators. With the appeal of African music, film, art, and fashion at an all-time high, African creative entrepreneurs are in a good position to seek and negotiate true win-win partnerships.
3. THE RISE OF THE AFRICAN INVESTOR
Which is why I am particularly excited about this final trend: the rise of African players across the investment value chain.
At the seed stage, angel investing is now taking hold. After the ground-breaking $200M Paystack exit and the minting of several unicorns including Flutterwave, Fawry, Wave and ChipperCash, successful African entrepreneurs and business people are now seeing the value in supporting and mentoring the next generation. Angel networks are thriving, as well as investment syndicates such as the previously mentioned Future Africa Collective (of which I am a member) or CcHub’s own outfit.
Meanwhile, wealthy Africans have started to look at art as an asset class. Younger collectors have been snapping up contemporary pieces in recent auctions, while Former Sony exec and FreeMe Digital founder Michael Ugwu has positioned himself as an ardent supporter of and investor in the local NFT art ecosystem and is motivating others to join him.
In Venture Capital, we are seeing the emergence of new funds led by Africans, including several focused on the creative industries, such as Laureen Kouassi-Olsson’s Birimian, Roberta Annan’s Impact Fund for African Creatives, and HEVA Fund, led by George Gachara -- interestingly all three showing a strong focus on fashion. In the music space, Afropop superstar Mister Easy launched his $20M Empawa Fund in 2020.
When it comes to Sports Business, South African billionaire Patrice Motsepe was elected president of the hot mess that is the Confederation of African Football (CAF) last year, based on his promise to transform it into a profitable venture. Zambian economist Dr. Dambisa Moyo has joined prominent Nigerian businessmen Babatunde “Tunde” Folawiyo and Tope Lawani in investing in NBA Africa, owner of the Basketball Africa League (BAL). Bolstered by the marketing power of the NBA, BAL will be a great case study for what I want to call a fresh SAAB (Sports As A Business) mindset in Africa, where sports were previously seen either as a playground for rich political cronies seeking influence, or as a slightly hopeless destination for non-profit developmental efforts.
Finally, African institutional funding is also on the rise, including through two notable projects I had the privilege to advise on. Multilateral trade institution Afreximbank, which in 2020 had announced the launch of a $500 million fund to support the African creatives industries, is now working on the first-of-its-kind panafrican film finance facility. The new vehicle will provide African-sourced and managed funding through a variety of financing products to commercially viable projects from across the continent. Meanwhile, the African Development Bank (AfDB) has approved a loan of $170 million to finance the Digital and Creative Enterprises Program (i-DICE), a Federal Government of Nigeria initiative promoting investment in the digital and creative industries.
AND ONE CRUCIAL CHALLENGE
The phrase “Africa is rich in talents” has been said so often that it has become a tired cliche. I myself am guilty of having repeated it numerous times over the years.
But every experienced African operator knows the truth: the main, most painful challenge we are all facing is in fact the scarcity of trained and specialized creatives and professionals, of properly developed projects, and, in the creative and sports space (tech has greatly improved) of established, investable companies.
We should expect major deal flow and recruiting bottlenecks as the most obvious IP, talents and companies are snapped up by early movers and the lack of capacity building mechanisms becomes obvious.
Netflix, one of the first global giants to enter the market, has been forced to reckon with this issue after a few (private) disappointments. The company has since invested in programs to train TV series writers and even Development Executives in partnership with the Realness Institute, and held a post-production workshop. The streamer has now just announced a $1 million scholarship fund for film and TV students in sub-Saharan Africa. If Netflix is struggling to find trained talents, everybody will.
But obviously, in every crisis lies an opportunity, and this should signal to education players that now is the time to invest the space.