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Are Forex Shortages Behind the Kwese TV Shutdown?

Kwese Shut Down Press Statement

The following is a press statement from Econet on the reasons why it has had to give up on it’s Kwese offering. The whole thing is probably going to be greeted angrily by the company’s customers. After investing so much in trying to upstage DSTV, Econet has apparently given up. So, what’s behind the Kwese TV shutdown?

Update:

It has since emerged that the decision by Econet to pull the plug on Kwese came after a Supreme Court ruling invalidating its license. The company, however, did not give this as the reason when announcing the shutdown. So, the Kwese TV shutdown was probably because of a multitude of issues. We still maintain, however, that Kwese could not have been sustained any longer, considering the forex shortages that prevail in the country. 

Is it because of Forex Shortages?

We fully suspect that the problem has to do with the foreign currency shortages that the country has been facing. Getting Kwese payments in bond notes is not very ideal, considering that the content that is displayed on the platform has to be paid for using foreign currency. In any case, the Kwese TV shutdown is not really a complete shutdown. A shell of the normal Kwese, it appears, will remain as you can see in the statement;

01 November 2018 – In order to maintain its position as a leader in broadcasting innovation in Africa, Econet Media has reviewed its business strategy and service offerings, to align them with the changes in the global digital and satellite broadcasting sector, and growth in access to mobile and fixed broadband on the continent.

The strategy review will see Africa’s leading multiplatform broadcast network focusing on three core services; Kwesé Free Sports (KFS), Kwesé iflix and Kwesé Play. KFS is Africa’s largest free-to-air TV service, Kwesé iflix is Africa’s leading mobile video-on-demand sports and entertainment platform while Kwesé Play is a leading-edge video streaming service with more than 200 sports, entertainment, kids and news channels including Red Bull TV, NBA, YouTube, TED and Bloomberg.

With increased focus on these three services, Econet Media will streamline its direct-to-home satellite television service. This will see the reduction of third-party channels available on the bouquet, as well as the removal of Kwesé branded sports (excluding KFS) and general entertainment channels. The broadcaster’s new bouquet will carry FTA, religious, and free news channels which will be available to viewers for a minimal fee, as the broadcaster will waive monthly subscription fees. Kwesé subscribers who have already paid their subscriptions for the month of November, or in advance, will receive a full refund.

Kwesé was launched at a time when the global pay television industry was in transition. Business models were evolving from traditional content rights linked to linear broadcast channels, to premium content rights moving towards digital media platforms.

Kwesé has built a satellite TV business with presence in 11 markets, a free-to-air business across 27 countries, delivered the 2018 FIFA World Cup Russia™ across Africa to a network of 115 sub-license broadcasters across 37 countries – reaching over 200 million households, acquired a controlling stake in a leading mobile video-on-demand service, and launched its own OTT service Kwesé Play. The business has also managed to secure leading sports rights and general entertainment channels to build a compelling content offering across its platforms, making a significant shift in the continent’s complex and competitive media industry.

Having recognised the importance of carrying original local content, Econet Media will also establish its own content creation hub, Kwesé Studios. 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.

These changes are in keeping with Kwesé’s commitment to providing affordable premium content, maintaining an innovative approach to content delivery and being attuned to audience viewing and purchasing habits.

As a consequence of the revised business model, Econet Media is reviewing its operational structures across all markets where Kwesé TV has presence which may result in changes to the company’s various business units.

Again, we suspect that the Kwese TV shutdown has to do with the prevailing forex shortages in the country. It’s hard to see how the business model could have been sustained considering that the content that is on Kwese is not made locally. Okay, this is just conjecture. What do you think were the reasons behind the Kwese TV shutdown?

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