Africa is becoming a playground and all big technology companies want to come and play. As that game begins, expect many asymmetric competitions. The latest one is that Netflix wants to help the Kenyan people by giving them TV shows and movies free. Yes, free mobile plan: “Now we’re giving audiences in Kenya the chance to experience these stories for themselves — completely free of charge.” That is a big activation.
“We’re launching a free plan that allows people to enjoy Netflix ad-free on Android mobile phones in Kenya. When you sign-up, no payment information is required. All you have to do is enter your email, confirm you are 18 or over and create a password. If you’ve never watched Netflix before — and many people in Kenya haven’t — this is a great way to experience our service. And if you like what you see, it’s easy to upgrade to one of our paid plans so you can enjoy our full catalogue on your TV or laptop as well.” – Cathy Conk, director of product innovation at Netflix. Netflix needs growth in Africa as TC Daily noted:
Netflix’s growth in Africa is falling short of expectations. In total, Netflix has less than 2.6 million subscribers on the continent. That’s a small percentage, especially when compared to the 27 million subscribers the platform has in Asia, or the 38 million subscribers in Latin America. Netflix was launched in both regions around the same time but Africa still lags in growth.
It is what it is – and that is where anyone starting a local streaming service in Africa must pay attention: the probability of success is extremely low because the competition has become amorphous. I never liked the streaming business in Africa due to the broadband cost challenges. Yes, it takes a “rich” person to spend money to watch a show of 60 minutes!
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The next dimension which I expect is this: you can sign up for free and if you use Safaricom, even your mobile data will not reduce when you are watching Netflix. In other words, no metering. Disney+, Netflix, Hulu, etc will offer that bundle in Africa within three years; Wall Street expects that playbook.
I added 4 million new customers (that reduced your profit by $10million) will likely boost your stock than we added 500k users (with improved profitability of $10m). In other words, Wall Street does not care that you have made extra $10m. For them, what matters is that you are growing. And if discounting the products will do it, go ahead. (Remember in America, the best time to buy clothes cheapest is the last week of every quarter as that is when brands do “sales” to improve quarterly numbers.)
As this happens, MultiChoice should watch its flanks. Yes, GOtv and DStv are not immune if people can get shows and entertainment via their mobile devices without thinking of data plans. Even European football can be watched on mobile from an American streaming provider.
And as that happens, consumers will win because choices will abound.
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We have to reject this offer, because it is not good for our people and economy. Why would they offer what they sell in developed markets for free in emerging markets? The most plausible answer here is to keep entrepreneurs from the emerging markets from developing home grown streaming platforms.
Nobody grows an economy by offering what should be sold for free, it’s a great disadvantage to our own entrepreneurs, we need to look at long term consequences.
Arts and entertainment are things Africa is richly endowed with, so the minimum we can do is to propel our own giant streaming platforms, championing and telling African stories in their purest and most authentic form. This is not oil drilling that we relied on global super majors to lead the way, we are talking about entertainment here, something unique in every culture and people. It’s an aberration letting a foreign firm control the narratives.
This is one sector I will never give up on, because it’s very unique, funding may be a challenge presently, but we have an unmistakable clarity on how Africa can play in this space, and it’s not something that should ever go to the highest bidder from the other side of the Atlantic.
In the game of wits and ideas, we must learn to hold our turf, you may not be able to compete in financial capital, but never be found wanting in enthusiasm and passion, they help you win big.
Our main focus right now should be on how to democratise broadband services, making internet access available and affordable to all Africans.
I am very convinced that we can compete in entertainment, but we must learn to resist these subtle gifts whose real intent is to cripple us, making our people unproductive at the end.