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Kenya Research Briefing - Mobile Phones Transform Kenyan Publishers - Strategy Boutique Thaesis
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Kenya Research Briefing - Mobile Phones Transform Kenyan Publishers - Strategy Boutique Thaesis

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During a period of three months Koen Voermans, consultant working for strategy boutique Thaesis, interviewed 26 executives, entrepreneurs, and representatives from organizations in the Kenyan ...

During a period of three months Koen Voermans, consultant working for strategy boutique Thaesis, interviewed 26 executives, entrepreneurs, and representatives from organizations in the Kenyan publishing and mobile industry.

In the research briefing you will read about...

1. importance of the mobile phone becoming the main gateway for communication, money transfer, information, and commerce in Kenya;
2. trends and developments in the Kenyan mobile services industry including innovative new initiatives within the Kenyan context;
3. the structure and challenges of the Kenyan book and newspaper publishing industry;
4. online and mobile initiatives of Kenyan newspaper publishers;
5. the inevitable transformation of the Kenyan publishing industry driven by fierce competition of disruptive mobile substitute information and commerce service providers.

We hope you will enjoy reading the briefing and get inspired by the great developments within the Kenyan mobile and publishing industries!

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Kenya Research Briefing - Mobile Phones Transform Kenyan Publishers - Strategy Boutique Thaesis Kenya Research Briefing - Mobile Phones Transform Kenyan Publishers - Strategy Boutique Thaesis Presentation Transcript

  • Mobile phones transformKenyan publishers
  • on ya ile g hin a ati en text ob tion lis r m le K n M lu ub eny n sfo vitab co o P K Tra s ine in rev in i Strategy Boutique Thaesis KenyaResearch briefing January 27, 2011
  • In this research briefing you will read about...1. importance of the mobile phone becoming the main gateway for communication, money transfer, information, and commerce in Kenya;2. trends and developments in the Kenyan mobile services industry including innovative new initiatives within the Kenyan context;3. the structure and challenges of the Kenyan book and newspaper publishing industry;4. online and mobile initiatives of Kenyan newspaper publishers;5. the inevitable transformation of the Kenyan publishing industry driven by fierce competition of disruptive mobile substitute information and commerce service providers.
  • Content 1 Statistics and images explaining the Kenyan context 6-13 ya en text K n o i nc 1 Drivers, solutions, and statistics of mobile communication 15-19 2 Drivers, solutions, and statistics of mobile money transfer 20-24 e bil on 3 Mobile phone as a gateway for information and commerce 25-29 Mo luti 4 Trends in the four mobile segments 30-61 o rev 1 Kenyan book publishers are educational publishers 64-68 2 Future of education is e-learning 69-74 g 3 Book publishers are in a Catch-22 with the government 75-77 shin a bli eny 4 Kenyan newspaper publishers are media publishers 78-88 Pu K in 5 Online and mobile initiatives of newspaper publishers 89-97 6 Two strategic challenges for Kenyan publishers 98 n 1 Transformation is inevitable for Kenyan publishers 100-104 a tio 2 Learning from and utilization of mobile success stories 105-106 sf or mtable an neviTr s i 3 Opportunity for local content in niches 107-110 i 4 Transformation strategy is required 111-114
  • Kenya in contextLater: on ile g hin a ati ob tion lis r m leM lu ub eny n sfo vitab o P K Tra s ine Source: Central Bureau of Statistics, 2010rev in i Photos: Thaesis/Koen Voermans
  • Beautiful nature and therefore tourism
  • 21% of people live in urban environments
  • 44% of people is younger than 14 years
  • 510 euro is the GDP per capita
  • Bad road, water, and power infrastructure
  • 8.1% of rural households have electricity
  • Strong local culture with local needs...
  • ...and strong tribal bounds with rural areas
  • Mobile revolutionBefore: Later: on ya g hin a ati en text lis r m le K n ub eny n sfo vitab co P K Tra s inein in i Photos: Thaesis/Koen Voermans
  • 50% of the people have a mobile phone
  • <--- Communication --->
  • <--- Communication ---> Drivers: Cheap handsets Batteries Wireless networks Low calling rates Many resellers
  • Usage:Connect with friends Connect with relatives Sell goods Inquire prices Finding a job <--- Communication ---> Drivers: Cheap handsets Batteries Wireless networks Low calling rates Many resellers
  • 20 mil. mobile subscribers in Kenya 20 18Mobile subscribers (Millions) 16 14 12 10 8 SEP07 DEC07 MAR08 JUN08 SEP08 DEC08 MAR09 JUN09 SEP09 DEC09 MAR10 Source: Communications Commission of Kenya, 2010
  • 70% of Kenyans use mobile to pay
  • <--- Money transfer --->
  • <--- Money transfer ---> Drivers: Mobile penetration Hardly any bank accounts Simplicity Cost effective Many agents
  • Usage:Pay to remote areas Save money securely No transport costs Pay for goods Transfer to relatives <--- Money transfer ---> Drivers: Mobile penetration Hardly any bank accounts Simplicity Cost effective Many agents
  • 13.5 mil.M-PESA subscribers and 20,000 M-PESA agentsSource: Safaricom, 2010
  • Anything else?
  • You bet!
  • Mobile phone as a gateway for ... Communication Money transfer
  • ... information and commerce Communication Money transfer Information Commerce
  • Information Commerce Drivers: 3G networks Smartphones Mobile applications Local developer community Low internet penetration
  • Trends in four mobile segments
  • Communication Money transfer Price wars Social networks Information Commerce
  • 78%market share of telecom provider Safaricom 5% 6% 11% Safaricom Airtel 78% Orange YuSource: Safaricom, 2010
  • Price warincreased competition among telecom providers1. Call rates dropped to 3-4 Kenyan Shillings per minute2. SMS rates dropped to 1-2 Kenyan Shillings per message
  • 996,180Facebook users in KenyaSource: Socialbakers, 2010
  • Activeuse of social networks for many purposes 56 percent 6 percent contributed to a got a job discussion 69 percent 40 percent 56 percent uploaded photos or joined a brand fan clicked on an ad videos group 48 percent 12 percent met in person with an met and dated old friend someoneSource: TNS Research International, Digital LIfe project 2010
  • Communication Money transfer Banking Point of Sales Online shopping Information Commerce
  • Money transfer extends to banking
  • Money transfer extends to point of sales
  • Money transfer extends to online shopping
  • Many players try to claim online domain
  • Communication Money transfer Information Commerce Data Collection Notification Content
  • Data collection: from consumers send to content providerConsumer Consumer Consumer Consumer Content provider
  • Data collection: from consumers send to content providerConsumer Consumer Consumer Consumer Content providerNotification: from content provider send to subscribers Content provider Consumer Consumer Consumer Consumer
  • Data collection: from consumers send to content providerConsumer Consumer Consumer Consumer Content providerNotification: from content provider send to subscribers Content provider Consumer Consumer Consumer ConsumerContent: by consumer gathered from content provider Consumer Content provider
  • Information services for different industries Education Retail Agriculture Data Questionnaire answers Reviews Stock levels collection Ratings Market prices Market prices Exam results PromotionsNotification Schedule changes Product arrivals Weather alert Health alert Product catalogue Animations Opening hours Crop rotation advice Content E-books Directions Health information Presentations Business directory And many more....
  • Mocality: innovative business directory
  • 3707: events, matatus, movies, exchange
  • Ushahidi: data collection and visualization
  • M-Farm: market prices and weather alerts
  • Yoza: cellphone stories from South Africa
  • Jumuika: vouchers and product offers
  • Communication Money transfer Information Commerce Business services Webshops Classifieds
  • Fourbarriers for online or mobile commerce1. Lack of trust2. Social shopping culture3. Supply chain management issues and dificulties4. Lack of a single payment solution
  • Threeapplications of mobile commerce1. Businesses offering their goods online2. Retail organizations offering goods in Webshops3. Consumers or businesses advertising products and services in Marketplaces
  • Business: book and pay flights
  • Business: collect school fees
  • Webshops: books, media, and technology
  • Webshops: buy abroad deliver in Kenya
  • Classifieds: offer and find cars
  • Classifieds: or many things more...
  • 10+ trends of the mobile revolution Communication Money transfer Price wars Banking Social networks Point of Sales Online shopping Information Commerce Data Collection Business services Notification Webshops Content Classifieds
  • Publishing in KenyaBefore: Later: on ya ile ati en text ob tion r m le K n M lu n sfo vitabin co rev o Tra s ine i Photos: Thaesis/Koen Voermans
  • Kenyan publishing = books + newspapers
  • Book publishers are educational publishers
  • 2009Education in Kenya in numbers Preprimary Primary Secondary Universities 1.9 million 8.8 million 1.5 million 177,735 children children children students38,247 schools 26,667 schools 6,971 schools 31 institutes of which of which of which of which 23,823 public and 18,543 public and 5,019 public and 7 public and 14,424 private 8,124 private 1,952 private 24 private92,955 teachers 171,301 teachers 43,016 teachers -Source: Kenyan Ministry of Education, 2010
  • Textbooksonly viable (book)publishing products1. Government funded textbook market has a large market size “Textbook market is 80 percent of the in total estimated 50 - 75 million euro large Kenyan publishing market”2. Lack of a general reading culture and therefore no general books market “We once organized a book signing event in a supermarket. People were coming in with pencil and paper, not being sure who had to sign.”
  • 80%market share of seven biggest publishers }
  • KIEKenyan Institute of Education controls textbook market 1. Publishers offer their educational books to the KIE 2. KIE, based on the curriculum, reviews and approves the books 3. Approved books are published in a yearly catalog and can be sold to schools
  • The future of education is E-learning
  • Government leads e-learning innovation
  • And many more....Government partners with private firms
  • E-learning is installing hardware
  • E-learning is content fit to the curriculum
  • E-learning is mobile
  • What does this mean for book publishers?
  • Publishers are controlled by the government Funding of Leading textbook market transformation to and most e-learning marketimportant source with disruptive of income competitors
  • Strategies by publishers to solve the paradox1. Digitize textbooks for e-learning solutions2. Improve the reading culture to stimulate general books market3. Selling through new channels including supermarkets and saloons
  • Newspaper publishers are media publishers
  • 123 radio stations make up the Kenyan media landscape 125 100Number of stations or titles 75 50 25 0 Radio Television Newspapers Source: Synovate, 2010
  • 23% annual growth rate of radio stations over the last 10 years 125 100Number of radio stations 75 50 25 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Synovate, 2010
  • 70.6% of households in rural areas possess a radio 100.0% 80.0% 60.0%Households 40.0% 20.0% Urban Rural 0% Total Radio Television Mobile phone Source: Central Bureau of Statistics, 2010
  • 90% of men and 77% of women listen to the radio at least once a week 100.0% 80.0%Weekly usage of mass media 60.0% 40.0% 20.0% 0% Listens to radio Watches television Reads newspaper All three None Source: Central Bureau of Statistics, 2010 Men Women
  • 83%of advertisement space is placed on radio 2% 0% 15% Radio 83% Television Print CinemaSource: Scangroup, 2010
  • 209% growth of gross advertisement exposure since 2006 50 40Kenyan Shillings (billions) 30 20 10 0 2006 2007 2008 2009 2010 Source: Synovate, 2010 Note: 1 Euro is 107 Kenyan Shillings, the total advertisement exposure in 2010 is 390 million Euro
  • 301,488 daily newspapers are distributed every day in 2009 350,000Average circulation (daily newspapers) 300,000 250,000 200,000 150,000 100,000 50,000 Total 0 English 2004 2005 2006 2007 2008 2009 Swahili Source: Central Bureau of Statistics, 2010
  • 336,635 weekly newspapers are distributed every week in 2009 350,000Average circulation (weekly newspapers) 300,000 250,000 200,000 150,000 100,000 50,000 Total 0 English 2004 2005 2006 2007 2008 2009 Swahili Source: Central Bureau of Statistics, 2010
  • 13.67% net profit margin for Nation Media Group in 2009 16% 15% 14%Net profit margin 13% 12% 11% 10% 2005 2006 2007 2008 2009 Source: Nation Media Group, 2010
  • Newspaper publishers offer radio and television Nation Media Standard Radio Africa Media Group Group Holding Max The Daily Nation Business DailyNewspaper The East African The Standard The Star The People Taifa Leo (Swahili) Classic FM Kiss FM Easy FM East FM Radio Q FM Maisha FM Jambo Fm Kameme FM X FM Smooth FM NTV Classic TV K24Television East Africa KTN Kiss TV STV Note 1: Also broadcasting organizations (i.e. Royal Media Services, Capital FM, and KBC) are active in the market Note 2: Only titles and stations within the Kenyan market are included
  • Online & Mobile initiatives
  • Portals
  • Mobile websites
  • E-papers
  • Premium SMS services
  • Classifieds
  • Talent scouting
  • Social media
  • Kenyan newspaper publishers have the opportunity to satisfycustomer information needs in a fully cross-medial manner
  • Two strategic challenges for Kenyan publishersBook publishers are forced into a Catch-22 by the KenyangovernmentNewspaper publishers have an opportunity to claim adominant position utilizing their cross-medial organization
  • Transformation is inevitableBefore: g ya ile lishin a en text ob tion K n M lu ub eny P K co oin rev in Photos: Thaesis/Koen Voermans
  • Mobile will evolve to information and commerce Communication Money transfer Information Commerce
  • Publishing organizations traditionally create information and enable commerce
  • Mobile will therefore enter the market of publishers and transform dynamics
  • Publishers could utilizestrengths in information and commerce and claim a dominant position
  • Being ahead of fierce competition from new entrants and substitute services
  • Learning from successful mobile services1. solve real problems of target customers2. with understanding of the local context and needs3. by offering data collection, notification or content services4. in a simple and accessible way5. utilizing the customer and rewarding him
  • Benefiting from mobile money transfer services which enables charging forinformation and commerce services
  • With an opportunity for local content in niches
  • Events and lifestyle in Nairobi
  • Restaurants in Nairobi
  • East-Africa market analysis for investors
  • This requires a...
  • ...clear transformation strategy
  • Is this really differentfor Western publishers?
  • Let’s discuss!
  • Thank You... for your attention. Discovered new opportunities? We can help you transform.Koen Voermans, consultant of Thaesis, researched the Kenyan mobile and publishing market betweenOctober and December 2010. He interviewed 26 executives, entrepreneurs, and representatives.Strategy Boutique Thaesis Kanaalweg 17L-A Koen VoermansSince 2006 3526 KL Utrecht Consultanthttp://www.thaesis.nl The Netherlands koen.voermans@thaesis.nlinfo@thaesis.nl +31 30 267 3514 @kvoermans
  • ti on gy ed ia ma n olo M or ch Inf TeWe research trends and consult clientsWe invest in our peopleWe are ThaesisWhat we doThaesis is all about strategy. We develop strategies for large companies, for example in publishing andretail. We challenge outdated assumptions that underly current business models. We understand changesin consumer behaviour. And we help companies redefine their raison dêtre in today’s businessenvironment. In the last year, Thaesis has worked on strategies related to e-books, mobile, digital rightsand social media. In formulating winning strategies, Thaesis combines financial analysis with businessmodel design. In short: we translate tomorrow’s developments into today’s answers. And we do it preciseand fast.Strategy Boutique Thaesis Kanaalweg 17L-A Koen VoermansSince 2006 3526 KL Utrecht Consultanthttp://www.thaesis.nl The Netherlands koen.voermans@thaesis.nlinfo@thaesis.nl +31 30 267 3514 @kvoermans
  • 26executives, entrepreneurs, and representativesCyber School Technologies Kalahari Ratio MagazineDaily Nation Kenya Buzz SafaricomDealfish Kenya Publishers Association Story MojaEast African Educational Publishers Kenyan Blogs Webring SymbioticeMobilis Longhorn SynovateHomes Kenya Magazine Longman TBL Mirror FundInReturn Capital Mobile Planet UshahidiJambopay Mocality Virtual CityJomo Kenyatta Foundation Pesapal