July 2024
By Catherine Jewell, former Senior Information Officer, WIPO
Piracy is prevalent in Kenya, robbing content owners of valuable revenue. Now a new digital movie distribution platform is fighting back. Meaning “of us and for us” in Kiswahili, Yakwetu aims to support creators by interrupting the piracy value chain at its source: Kenya’s “movie shops”, where customers pay to have popular yet pirated content copied directly to their flash drives.
But with subscription services holding just 1 percent market share in Africa, how can Yakwetu convince customers to adopt its disruptive pay-as-you-go model? Co-founder and COO, Mike Strano, tells WIPO Magazine about its creative approach to streaming in Africa, its focus on local content, and how it’s “legitimizing piracy channels”.
What prompted you to set up Yakwetu?
In 2014, Safaricom, Kenya’s leading telecoms provider, made a public tender for content. At the time, in-home internet connectivity bundled with content was popular and Safaricom wanted to secure its position in that market. So my co-founder, Trushna Buddhdev Patel, and I put in a tender. I had been working in the entertainment sector since 1999 and Trushna is an experienced cinema distribution professional. We realized that streaming video on demand (VOD) was the way to go in Kenya – at the time, there were only about two million TV sets in Kenya versus 13 million smart devices. Our content streaming journey began in October 2014.
Tell us more about Yakwetu and its content.
Yakwetu is an online streaming platform for African content.
We launched our first streaming service, MyMovies.Africa, in September 2019 and have since been developing Yakwetu, which allows us to offer a broader range of content. We have seven verticals: movies, TV series, music, virtual reality, podcasts, audiobooks and games, all in one place. Each vertical has a slightly different revenue model. We plan to plug in ad-supported content soon, to deliver a hybrid model, where free content comes with ads but you pay for ad-free content. Customers can sign up for free on a pay-as-you-go basis and can buy or rent content from us. That’s a truly African model and it works.
At present, 90 percent of our content is Kenyan. It’s easy to access. But our ambition is to carry content from across Africa. We’re targeting Gen Z and Gen Y; these are the generations that are growing in Africa. We are also including edutainment in our catalogue. That’s important right now in Africa given the challenge of youth employment. Young people make up more than 60 percent of the African population. If they don’t have work, how are they going to support themselves and their families? The risk is that they turn to crime. That’s why it’s so important to empower them and help them find ways to earn a living. On top of that, it’s a massive market and something we can easily adapt our technology to.
Customers pay to have trending content copied onto their flash drive. The creators don’t get a penny.
What does Kenya’s movie market currently look like?
The movie market is dominated by the piracy retail chain, which in Kenya alone consists of an estimated 54,000 movie shops. Subscription-based streaming platforms in Africa hold just 1 percent of the market. Data costs are high and people use their data bundles to generate income, not to stream movies. Customers go to the shops and pay their “movie guy” to copy trending content onto their flash drive. They go home, watch it, delete it and go back for more. The creators don’t get a penny.
Under Kenyan law, movie shop owners can be arrested for carrying pirated content, whether local or international. If convicted, they face two years in jail and a USD 5,000 fine, which they can’t afford. The perception of shop owners is that major international studios may be unlikely to file a complaint against them with police; however, a local producer may have them arrested. So, almost all movie shops don’t carry local content - only international; meaning that everyone loses out.
Piracy takes up to 99 percent of the revenue of content owners in Africa. It’s crippling the creative industries.
How is Yakwetu tackling piracy in Kenya?
We see Yakwetu as a piracy intervention. Piracy takes up to 99 percent of the revenue of content owners in Africa and other developing nations. It’s crippling the creative industries.
With our new service launching in Q4/2024, customers still go to their movie shop but, when the shop downloads local content from our cloud, it’s legitimate and encrypted onto the client’s flash drive. When they plug their flash drive into their TV, our player is installed, allowing them to watch local movies on a legitimate pay-as-you-go basis, without drawing on their precious data bundle.
With our model, the shop owner, content owner and Yakwetu are paid in real time via our respective mobile wallets. Everyone wins. Once we demonstrate that we have a customer base that is consuming legitimately through the movie shops, we’ll tackle international film piracy in collaboration with the major studios.
Even if we took a modest share of the markets in Ghana, Kenya, Nigeria, South Africa and Tanzania, we would be a USD 100 million company.
What response are you getting from the movie shops?
We already have a list of movie shop owners that want to work with us. Things are getting tougher for them but they still dominate the market. The reality, though, is that these shops will never be in a position to meet the security requirements to set up a legitimate video library.
When we license our content to them, we do so on our terms. That means our content is encrypted (and can’t be copied) and only plays on our player. As we recruit movie shops as agents, we tell them up front that, in 10 years, their business (as distributors of pirated content) may no longer exist, especially as data costs fall and people become more comfortable with streaming. By working with us, we’ll help them transition to a legitimate business operation. We believe this is the most socially responsible way to deal with the situation, since these movie shops are usually operated by young people, so we must be careful not to contribute to the massive youth unemployment in Kenya and Africa.
What’s the commercial opportunity for streaming local content in your target markets?
It’s massive. PwC estimates the market to be worth USD 5.7 billion per year - in South Africa, Nigeria, Kenya, Ghana and Tanzania alone. Even if we took a modest market share there, we would be a USD 100 million company.
When we started this journey, our aim was for the internationals to license their content to us. They are willing to do that, because we meet their technical requirements for content security; but they don’t move without a minimum guarantee of USD 100,000. That doesn’t work for us right now, so we’re focusing on local content. We see it as a great opportunity, given the rise of the creative industries of Africa in recent years.
We’re doing something different. What we bring to the table is local focus and local solutions.
Are you competing with the big streaming platforms?
No. It will take years for the big streaming platforms to match the penetration levels they enjoy in developed markets. There’s just too much free pirated content available and people don’t want to use their data bundles to stream movies.
We’re doing something different. We’re intervening in the piracy retail chain and legitimizing the piracy channels. No big streaming platform is going to do that. Theirs is a one-size-fits-all global model, where anything outside their main markets is a plus. What we bring to the table is local focus and local solutions.
Funding is a big challenge. To scale we need capital investment and that’s tough because entertainment is considered a luxury and not a frontline need.
How are you supporting African filmmakers and musicians?
At present, the big streamers in the African market are paying creators often less than 20 percent of the cost of producing a film. They also want all rights for two years but don’t do anything with them. That means if you spend USD 50,000 to produce a movie, you get just USD 10,000 to stream it. How do you make up the difference when, after two years, your audience will have moved on?
That’s where Yakwetu comes in. We create income-yielding opportunities for our creators beyond our platform by sublicensing their work to VOD platforms, TV stations, airlines, festivals and more. We have different splits for different scenarios but we ensure each partner gets an equitable share. For example, when a film is distributed through our platform, we split 50–50 with the film producer; when working with an agent, we split the returns three ways between the agent, creator and ourselves. And when we secure deals with other platforms, it could be a flat free or a split. It depends. Everyone agrees in advance and contracts are set up. Creators who have an exclusive deal with us know the value we offer.
And, of course, we also pay royalties for the music in our content to CAPASSO (the Composers, Authors and Publishers Association) in South Africa.
It’s all about education. For us, content and its protection are king.
What are key challenges for Yakwetu?
Funding is a big challenge. To scale we need capital investment - and that’s tough, because entertainment is considered a luxury, versus a frontline need. We understand, but we also believe entertainment is a basic need. We want investors to understand that, by disrupting the piracy value chain, we’re helping Kenya’s creative industries to thrive in the long term.
How is Yakwetu building IP awareness?
It’s all about education. At Yakwetu, we have very strict content-management protocols, which we developed with international content in mind. For us, content and its protection are king.
We also educate our partners on how to protect their own content. For the education of consumers, we join forces with others, via Partners Against Piracy (PAP) Association of Kenya, for which I’m the inaugural chair.
Creators, take the time to find out how IP can protect your content, help you defend your rights and leverage the value of your work.
What’s your message to creators, consumers and governments?
Creators, treat your creativity like your most valuable asset. Take the time to find out how intellectual property (IP) can protect your content, help you defend your rights and leverage the value of your work. There are many free online courses that can help with this, including from the WIPO Academy.
Consumers, use platforms that give content creators a fair share of the revenue they generate. That way, we all benefit from a vibrant creative industry.
Governments, remember your role as enablers of the creative industries. Work closely with the sector to understand its needs in terms of legislation and to pass that legislation quickly. Today, everyone’s a creator. There’s no better time to raise IP awareness. The new generation respects creativity, they just need to learn how to use IP so they can reap its benefits.
How does Yakwetu’s WIPO Global Awards win support your business?
Our dedicated team are greatful that our hard work has been recognized! But this is just the beginning. Now we have a great responsibility, to live up to the award. It’s a validation of our business model, as well as an opportunity to explain to new investors what we are doing and attract the resources we need to scale. The award will take us to the next level. We’re ready for that.
Yakwetu won the WIPO Global Award for Entertainment Technology in 2023. The WIPO Global Awards celebrates small and medium-sized enterprises (SMEs) for their excellence in commercializing IP-backed innovation and creativity in an effort to improve society. Yakwetu won the WIPO Global Award for Entertainment Technology 2023. This year’s winners were announced during the General Assembly of Member States in Geneva in July.
