Internet TV company TV2U International (ASX: TV2) is planning to expand its African commercial ambitions by signing a licensing agreement with Africa Enterprise Media Group (AEMG), to launch and market its video content delivery platform under the brand name ‘TV2U Africa’.
AEMG is the leading South African digital and broadcast technology provider that serves thousands of clients in half a dozen countries.
The company also provides online TV and video-content distribution service for broadcasters, distributors and owners of content who wish to sell content on to other customers.
The commercial licensing agreement will run for an initial 36-month period, with an option for a further 36-month term.
As part of the terms of the deal, AEMG has agreed to licence TV2U’s technology and brand assets to enhance the full-service OTT streaming platform already being offered to customers by AEMG.
According to TV2U, “TV2U Africa will supersede AEMG’s existing direct-to-consumer service, with TV2U replacing AEMG’s incumbent technology provider.”
The internet TV company said it will also power the branded, fully managed content platform already offered to AEMG’s internet service provider, mobile operator and content rights holder clients in South Africa.
In parallel – and demonstrating its global market ambitions – TV2U has locked in a video streaming deal with one of Indonesia’s largest telecom service providers, Indosat Ooredoo.
South African bounty
According to market statistics, South Africa is currently Africa’s second richest country with the broader region being heavily populated and yet in the early stages of affluence-building economic development.
TV2U says its technology will be instrumental in supporting a full range of content delivery capabilities, including subscription streaming and transactional video on demand (TVOD).
TVOD is a particularly important area for growth, with many consumers in South Africa and the region preferring to pay for their digital content on a pay as you go basis.
As a positive first salvo of commercial return, TV2U said that 10,000 existing active subscribers and streaming service users will immediately be brought onto its platform, from existing end-users in South Africa, Namibia, Mozambique, and Botswana.
Over time, TV2U expects its user-base and commercial haul from the deal to expand with initial estimates forecasting one million paying subscribers in the first twelve months.
TV2U Africa is on track to be operational as a multi-tenanted streaming service within four weeks with both paying subscribers and additional revenue streams already being mentioned as a result of advanced data analytics.
The company said its advanced data analytics capabilities will be leveraged to further drive revenue potential across the region and also sets a foundation for the parties to share premium African and international video content.
The deal announced today stipulates that AEMG will have exclusive rights to utilise the TV2U platform and brand in South Africa and to promote them on a non-exclusive basis across the rest of Africa and the Middle East.
Subject to performance as part of a revenue share model, AEMG may be offered exclusive rights to promote the TV2U platform and content in other countries.
“After looking at all comparable solutions, TV2U was the only provider that could meet our feature specification and multi-tenanted platform requirements. Combined with TV2U’s strong heritage in the OTT space and the expertise of its team, we’re looking forward to bringing a truly next-generation OTT streaming service to millions of end-users in Africa and across the region,” said Ivan Bridgens, CEO of AEMG.
News of TV2U’s commercial venture in Africa helped its share price add around 9% by mid-afternoon trade, currently trading around $0.012 per share.