The scramble for African streaming
• Showmax is fast becoming the little streamer that could and has overtaken Netflix as the most popular service on the continent
In SA, local streaming service Showmax may still play second fiddle to global streaming giant Netflix. However, when it comes to the rest of Africa, MultiChoice’s eight-year-old streaming platform, recently relaunched after the 2023 Comcast deal, is fast becoming the little streamer that could and has overtaken Netflix as the most popular streaming service in Africa.
This turn of events goes against industry predictions made in 2023 in a survey by Digital TV, which predicted that by 2029 Netflix would become the biggest streaming service in Africa with a projected 7.9-million subscribers, while Showmax would grab second place with 4.4-million subscribers, ahead of bronze medallist Amazon Prime with a predicted 3.14-million users.
Instead, thanks to its focus on local and African content, its exclusive licensing deal with HBO and its leveraging of its rights to the Premier League as part of its packages, Showmax, according to a recent survey by market research firm Omdia, had 2.1-million subscribers by the end of November 2023, with Netflix in second place with 1.8-million. Amazon Prime is way behind in third place with only 300,000 subscribers and while that could change once the retail giant begins its
SA operations later in 2024, the low subscriber numbers have already seen Amazon Prime announce that it is stepping back from its previously loudly announced commitments to generating unique African and Middle Eastern content.
With its recent relaunch, following the Comcast deal that resulted in the US company purchasing a 30% stake in the service, Showmax has expanded its offerings of exclusive international content to include not only fan favourite, stalwart HBO but also BBC, ITV, Paramount, Lionsgate, Sony and Warner Brothers shows. Its use of the Premier League as a carrot for sports fans is also paying dividends as African football fans sign up to the service for their weekly fixes.
According to Omdia, Showmax’s market share in Africa is now 38.7% ahead of Netflix, which has a 33.5% share of the continent’s still-undertapped and potentially highly profitable streaming market.
In SA, Showmax is estimated to have 900,000 subscribers, putting it in second place behind Netflix, which has 1.2-million, but it seems that MultiChoice’s long experience on the continent is paying off.
Showmax has aggressively pursued a strategy of developing African original content and the Comcast deal is seen as a means of generating greater income for further aggressive development of this strategy. As the streamer’s CEO, Marc Jury, recently told restoftheworld.org, the Comcast deal “allows us to invest in far greater numbers of local productions. And so when you take those local productions, coupled with the international content from around the world and the best of live sport, we know that we’ve got a winner.”
The brand recognition and market share that MultiChoice’s DStv satellite service has in Africa has proved to be a useful means of attracting African subscribers to the streaming platform. French TV giant Canal+, which recently made an acquisition offer for MultiChoice, which was wisely rejected, has recognised the power of the company’s footprint in Africa by investing $89m in Showmax to help increase availability and spread of its products on the continent.
The most obvious explanation for the SA streamer’s success in Africa is experience. While Netflix, Amazon, Disney and other platforms arrived in Africa and then had to develop strategies around the production of local content, MultiChoice already has a wealth of experience in producing content in Africa and developing strong relationships with African producers.
It’s been in the business of African television since 1995, when Netflix was still a dream and the idea of streaming seemed to be science fiction.
According to Marie LoraMungai, founder of consulting firm Restless Global, this has meant that “MultiChoice’s level of commitment to building the African video-streaming business from the ground up is a lot deeper than the global players’ need for expansion ... The African market is essentially MultiChoice’s to lose
... It has teams on the ground in most countries, constantly taking the pulse of what audiences want to see. In some places, like Zambia, MultiChoice even single-handedly props up the entire audiovisual sector.”
MultiChoice’s 2023 revenue of R59.1bn still relied predominantly on DStv but it has increased its investment in Showmax as it works towards the ambitious goal of acquiring 50-million subscribers and generating $1bn in revenue over the next five years.
While that may sound like a big but doable ask, Showmax s success will, according to industry analysts, need to take into account a smooth relationship with Comcast in a sector where one of the most common reactions to loss in subscribers and profits is slashing costs, and the establishment of a more competitive pricing strategy.
Showmax recently slashed its subscription fees by a whopping 50% in an effort to swiftly grow its subscriber base as an attractive lure for investors. It may drive subscriber numbers in the short term but, as Netflix has realised during its tenure on the continent, sometimes the only way to make up for losses is to increase subscription costs and hope that those who remain will be rewarded with more local content and relevant programming for their efforts.
For now, it seems that MultiChoice and Showmax are reminding their competitors that Africa — as the muchquoted, grating adage reminds us — is not for the cowardly, especially when it comes to the business of streaming. And their long and patient history of content development on the continent is putting it in pole position for the streaming scramble.
SHOWMAX HAD 2.1-MILLION SUBSCRIBERS BY THE END OF NOVEMBER 2023, WITH NETFLIX SECOND WITH 1.8-MILLION