The Netflix Africa’s Effect, DStv and Showmax Adapt

The Netflix Africa’s Effect, DStv and Showmax Adapt

The future of video-on-demand (VoD) market in Africa is beginning to evolve. iROKOtv was one of the pioneers of the digital VOD sector in the West African market. South Africa’s Naspers, Africa’s most capitalized business, with its brands lead the Southern African market through clusters of brands like MutiChoice, DStv, GoTV, etc. These African companies have stimulated the markets to get the attention of many international brands like Netflix.

The reason the VOD market is evident: Africa’s smartphone and mobile internet penetrations are improving. With the higher penetration, everyone wants to come in and competition goes up. DStv  and Showmax are changing strategies to better position the brands to compete.

In addition to getting access to Showmax’s catalogue of more than 25 000 TV series episodes and movies via the DStv Explora decoder, DStv Premium customers will also be able to access Showmax via the DStv Now app on their mobile device, media player or smart TV or watch online via a PC or laptop….

The Showmax subscription gives customers access to two concurrent streams on different devices, so parents can watch their shows on the big screen while the kids watch cartoons on their tablet. Showmax also gives customers the option to download up to 25 TV shows and movies to their smartphone or tablet for viewing later. It’s perfect for long road trips and flights.

To make accessing Showmax hassle-free, a link will be added to the DStv Now app and the DStv Now website. Premium customers can use up to four mobile devices such as smartphones and tablets to access the DStv Now app.

The simple fact is this: with Netflix in the region, growth is going to become harder and every local VOD player must find a way to differentiate its offering. DStv and Showmax want to combine their contents to deliver more value and through that compete. Distribution is vital and DStv has it. Showmax localized model will ride on that. At the end, the two combos will have the capacities to hold their terrains in the age where Amazon Prime and Netflix are coming to Africa.

The Players

Africa’s VOD is growing and very dynamic. Unlike text, there is no requirement that one has to be educated to read the contents. So technically, video has the full African market for itself provided the videos are produced in the languages of the customers.

There are more than 180 VOD platforms with focus on Africa and black culture. The same report noted that only about 6% of African web traffic is video related. This means that growth still awaits.

Netflix is now in Africa, delivering services to most parts of the continent except perhaps Somali and Sudan where US government has trade restrictions for U.S. companies.

Naspers, Africa’s largest company, owns ShowMax which is huge. This innovative firm has also added Econet Kwese TV which is delivered via satellite.

iROKOtv is the undisputed leader in West Africa, delivering high quality local contents. When it launched in 2011, it was followed by Kenya’s in 2012. Later, South Africa’s Wabona and West Africa’s Afrostreamm backed by Y Combinator. Some of these companies have merged resulting to Restless Global, Trace Play, etc. Wabona has since shut down. There is also Ericsson Nuvu, South Africa’s Vidi and many other small players across the continent. Sure, most of those startups will fade. But that should not be the end of the story.

All Together

I am expecting Amazon Prime to join in coming months as the company works towards its global domination. As I noted few days ago, Amazon will come via its best product which is ecommerce and using that will expand to sell services like Alexa, Amazon Prime and the Amazon Web Services. They have the scale and capital and will surely compete vigorously. The future of this sector will largely be driven by capacity to create highly differentiated and exclusive contents which can be distributed at scale. The local ones may have to adapt as DStv and Showmax have done. Also, more of them may need to merge because scale matters. This is a market in motion and it will be all good for the customers.


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