South Africa’s video-on-demand (VOD) streaming market has been a hive of activity in recent months, and is tipped for further growth as more players make their services available locally.
This is the sentiment shared by industry analysts, remarking on the latest entrants in SA’s TV streaming wars.
British TV online subscription-VOD service BritBox confirmed its debut in the local market in July, officially going live on 6 August. South Africa became BritBox’s fifth international market after the US, UK, Canada and Australia.
Closer to home, eMedia Investments, the home of Openview, Etv and eNCA, last week announced the launch of its online video-streaming service in partnership with MTN. Named eVOD, the new service offers audiences locally-produced dramas and movies on Android and Apple devices, providing a combination of free and subscription-based content.
These new services take on Netflix, Showmax, Video Play from Vodacom, Prime Video from Amazon, Hong Kong-based Viu, Apple TV and TelkomONE, launched in November, which are available in SA.
Today, Showmax Pro announced it will live-stream all matches of English Premier League, La Liga and Serie A in more than 50 countries across Africa.
Growth on the horizon
“I think you are going to see a lot more players coming forward,” says Mark Walker, associate VP for Sub-Saharan Africa at IDC, commenting on what’s to come in the local streaming services market.
Walker highlights that fibre providers like Frogfoot and Vumatel are providing fibre-to-the-home (FTTH), as a growing middle-class and consumers want to see more content.
This, in turn, takes care of accessibility and affordability. “A lot of the content providers have woken up to the fact that the internet is a viable channel, especially now that the cost of access has gone down, and the rollout of fibre is far deeper than it used to be.”
Similarly, independent analyst Nozi Dikgale says SA presents great opportunities for online VOD players.
Dikgale points out this is supported by macro-environment factors, such as the narrowing of the digital divide, technology infrastructure development, as well as the rising number of middle-class households with FTTH.
“Both mobile operators and technology companies have made investments in fibre technology infrastructure, which has accelerated internet access to South African homes. Declining mobile broadband (data) prices over the past three years have also benefited consumers to stream content online, which is mostly done via mobile devices.
“In recent times, we have also noted declining price points for fibre internet, which has increased internet access to many middle-class households. This has contributed immensely to adoption of VOD services and general usage on internet-related platforms; that is, social media, e-commerce as well as other digital entertainment services.”
The independent analyst explains the over-the-top (OTT) video market is growing, with fierce competition.
Like her counterpart, she anticipates this trend will gain momentum, as the macro-environment enables more players to enter the South African market as part of emerging market business expansion strategies.
“SA is viewed as a gateway for many global entities when it comes to investments in Africa and business opportunities. It makes sense for BritBox to follow existing players in the SA scene.
“SA is one of the most targeted countries in Africa, since it presents a lot of opportunities and has great growth potential for services such as VOD; consumer demand will always exist and demands always change, and will continue to grow as consumers become more digital-savvy.”
Affordability sweet spot
With the DStv premium subscription costing R829 per month, Walker indicates a customer would pay less even if they subscribed to five of the available streaming services.
BritBox offers customers a week’s free trial, and if they choose to sign up, they pay R99.99 per month, or R999.99 for 12 months.
In the case of eVOD, consumers have a choice between daily, weekly and monthly subscriptions. The daily subscription costs R5, while the weekly and monthly payments are priced at R15 and R29.99, respectively.
Walker notes BritBox targets the higher LSM (urban LSM 10) and should do well in that area. “The content is good; there is some solid content there – it’s the content from ITV, BBC. The big threat there is Netflix, Apple TV – they’ve also got some high-quality shows. They will aim it at the right market: high-income areas, middle-aged high income, etc.”
OneVOD, he comments: “Media organisations are jostling for positions around the streaming market, using the internet as a way to reach the customer-base rather than relying on cable-based solutions.”
As to BritBox’s fortunes in the local market, Dikgale says it’s still early days to measure or speculate on its growth trajectory.
“At the moment, it seems the service will be priced similar to its main rivals Netflix and Showmax, at R99 per month.”
The value it adds to consumer content preferences will be the major contributing factor to its bid to stand out from the rest and draw new subscribers, she adds.
Winner takes all
Amid all these entrants in the local market, Dikgale believes both consumers and business operators in the OTT video industry stand to benefit.
“OTT operators stand to gain revenue and profit growth once the services take-off and grow in subscriber numbers.”
However, it is the consumer that will benefit the most. “The consumer gets direct access to a broad selection of content to choose from, they curate their own content, time of consumption is controlled by the consumer, and they can consume the content as many times as they wish to without any interference.
“The price points that are in the market also benefit the consumer at the end of the day. To be able to access these services at R99 per month is affordable to those that have wireless and fixed broadband in their homes.
“Consumers also benefit from the many options of mobile broadband packages that are geared towards entertainment platforms, which are made available at reasonable cost by major mobile network operators. The consumer has so much power in this regard,” Dikgale concludes.
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