You will be redirected back to your article in seconds

Discop Africa: Streamers Search for Foothold in Crowded African Market

Despite data costs, bizzers optimistic about long-term uptake

JOHANNESBURG — Before Naspers’ VOD service Showmax rolled out its hyper-local Kenyan offering last year, Showmax Africa head Chris Savides noticed that audiences in Nairobi already had their own version of video-on-demand: Pirated content which was downloaded, distributed on flash drives, and often delivered to your door.

The existence of that parallel ecosystem underscored the fact that, despite the challenges facing streamers across the continent, African consumers already have the same built-in desire for on-demand content as the rest of us.

“We don’t have a VOD market that we have to develop—people are consuming VOD every single day,” Savides noted at a panel discussion at Discop last week.

Russell Southwood, of telecoms, Internet and broadcast consultancy firm Balancing Act, drove the point home by adding: “The money is out there, it’s whether it’s [moving] in your direction.”

Africa’s VOD marketplace has steadily expanded and evolved in the past few years, with Balancing Act estimating earlier this year that more than 180 platforms for VOD – via mobile apps, set-top boxes, or the Internet – had entered the fray. But the extent to which they’re capturing and monetizing a sustainable share of the market remains to be seen.

Sharks like Showmax and Nigeria’s Iroko are doing battle with Netflix, which launched on the continent as part of its 2016 global expansion, but the waters are mostly teeming with minnows, small regional players trying to exploit local content niches.

Margins are slim if your business model is tied to rabid support from fans of Kenya’s low-budget Riverwood industry. But even deep-pocketed players can get burned: Earlier this year, telecom giant MTN folded its latest VOD venture and went back to the drawing board.

While subscriber numbers aren’t available, top-tier services like Netflix and Showmax seem to have staying power on the continent. There’s enough consumer spending to be found in cities like Johannesburg, Lagos and Abidjan to ensure a profitable base of customers shelling out $10 a month to catch the new season of “Stranger Things” or “Orange is the New Black.”

“What we’re not doing is finding a lot of services…that talk to local communities,” said Manny Teixeira, MTN’s group head of digital media and services. “We have 230 million subscribers. That’s who I’ve got to serve.”

Subscription prices alone are likely less of an obstacle than data usage. Even as data costs come down across the continent, they’re still prohibitively high for streamers to gain wider traction. Teixeira cited a study that 50% of African smart phone users regularly switch off their data out of fear that auto updates and unexpected usage will exhaust their data supply.

“Data consumption on mobile is an expensive medium at the moment. It’s a challenge that we face on a daily basis,” he acknowledged.

Sitting in the hot seat, Teixeira stressed the difficulties facing the heavily regulated telecom industry: if MTN wants to launch a new product in Nigeria, he noted, it can’t settle on a price point until regulators have their say.

But data costs alone aren’t the main hurdle for VOD absorption. “I think we have a challenge…at a hyper-local level with how content is packaged, and the type of services that are available,” he said.

MTN is exploring ways to offer more cost-effective data bundles packaged with video consumption, similar to how its wildly popular music streaming service has made it one of the biggest music distributors on the continent.

Showmax is likewise looking to use innovative partnerships to bring more value to its subscribers, allowing them, for example, to download their content for free in shopping malls or aboard city buses. “We’re trying to make it as easy as possible for consumers,” said Savides.

With Internet penetration and smart phone usage on the rise across Africa, there’s a vast market still waiting to be served. MTN is likely to rebound with a new VOD offering soon. Earlier this year, Asian streamer Iflix, a leading SVOD service in emerging markets, announced a partnership with Econet Media’s Kwesé to launch a new platform across sub-Saharan Africa.

That competition can only benefit African consumers in the long run. “This is not a one-horse race,” said Savides. “We’re at the beginning of this…but it’s exciting.”

More TV

  • Win Rosenfeld, Jordan Peele and Simon

    'Star Trek: Discovery,' 'Twilight Zone' Bring Energy, Emotion to PaleyFest

    Both the CBS All Access shows “Star Trek: Discovery” and the upcoming “Twilight Zone” reboot held PaleyFest panels on Sunday, with both sets of cast and creators bringing energy, humor, and emotion to the stage. Both panels were moderated by Variety‘s executive editor of TV, Daniel Holloway. First up was “Discovery,” where series star Doug [...]

  • Marvel's Runaways Review

    'Marvel's Runaways' Renewed for Third Season at Hulu

    Hulu has renewed “Marvel’s Runaways” for a third season. Set in the Marvel Cinematic Universe, “Runaways” stars Rhenzy Feliz, Lyrica Okano, Virginia Gardner, Ariela Barer, Gregg Sulkin, and Allegra Acosta as the Runaways, six teenagers from different backgrounds who unite against their parents, the Pride, portrayed by Angel Parker, Ryan Sands, Annie Wersching, Kip Pardue, Ever Carradine, James Marsters, Brigid Brannagh, Kevin Weisman, Brittany Ishibashi, and James Yaegashi. The new order is [...]

  • Robert Mueller Report

    TV News Scrambles Schedules in Wake of Mueller Report

    The “Mueller Report” has prompted a bevy of new reports from the nation’s big TV-news outlets. CBS News plotted a Monday primetime special to cover the disclosure of a summary of the report prepared by Special Counsel Robert Mueller that had examined Russian influence on the 2016 U.S. presidential election and probed whether President Donald [...]

  • Noah CentineoNickelodeon Kids' Choice Awards, Show,

    Kids’ Choice Awards 2019: JoJo Siwa, Noah Centineo Take on Bullying

    This year’s Nickelodeon Kids’ Choice Awards was full of positivity and encouragement to be yourself. DJ Khaled, known for his upbeat mantras, hosted the 32nd annual awards ceremony alongside JoJo Siwa at USC’s Galen center. Siwa accepted the award for favorite social music star. Siwa said in her acceptance speech, “I get hated on every [...]

  • Bette Midler, Judith Light Join Netflix's

    Bette Midler and Judith Light Join Ryan Murphy's 'The Politician' on Netflix

    Bette Midler and Judith Light will guest star on “The Politician,” the first series Ryan Murphy will launch on Netflix after he inked a deal with the streamer last year. Murphy made the announcement at the end of Saturday’s PaleyFest panel for his FX series “Pose,” and noted that Midler and Light will both appear [...]

  • Mj Rodriguez, Billy Porter, Indya MooreFX's

    Patti LuPone Joins FX's 'Pose' as Season 2 Jumps to 1990

    “Pose” co-creator Ryan Murphy revealed that Broadway legend Patti LuPone will guest star on the upcoming second season of the FX drama, and that the series will jump ahead to 1990. Murphy made the announcement while moderating the “Pose” panel at PaleyFest on Saturday, telling lead actress MJ Rodriguez that she will share many scenes [...]

More From Our Brands

Access exclusive content