Video-on-demand heats up
A WINNER: ACCESS TO POPULAR NICHE SPORTS LARGELY IGNORED BY MAINSTREAM TV
The arrival of a new service in South Africa last week added a new flavour to an intriguing marketplace.
When MTN announced last week it was to shut down its video-on-demand (VOD) service, VU, just over a year after Times Media closed a VOD service called Vidi, many assumed it was now a two-horse race between Naspers-owned ShowMax and global giant Netflix. But then an online service called Digital Entertainment on Demand was launched by Discover Digital. It’s the same company that provided the VU platform and would have learned a few lessons from MTN’s failure.
Nevertheless, when the first inklings of Netflix’s arrival in South Africa surfaced, it became clear that DStv subscribers who were only watching movies and video series would be easy pickings for the US-based provider, which has single-handedly destroyed the video rental industry in the US. As a result, Naspers decided to set up its own competitor, preferring to see customers jump ship to a sister company, rather than to the competition.
ShowMax has worked hard to differentiate itself, with the largest South African movie and series catalogue available from any provider. However, this does not appear to have been an effective enough counter to Netflix’s secret weapon: the ability to bring its own high-quality productions to a global audience simultaneously.
But there is one market where it has made a massive impact: in Kenya, it has achieved instant success, partly through adopting the same local content strategy in South Africa. But the most important factor in its success is its understanding of the local dynamics of the economy. It has allowed viewers to subscribe via M-PESA, the Kenyan-born mobile money service that has transformed payments in East Africa. Users can also purchase a single movie at a time, making it the most affordable as well as accessible VOD service in Africa.
Into this stormy mix, in the past week Digital Entertainment on Demand (DEOD) made its entry. It offers a standard selection of rental and subscription movie and video series content, but has added two elements that give it more of a YouTube than a Netflix feel. The first is a news service that includes most major news channels from around the world. Since viewers tend to stick to one or two news sources, this one is unlikely to make the competition sit up and take notice. The second new element, however, is a potential winner. A Sports Pack gives access to a range of popular niche sports largely ignored by mainstream TV, with the aim of giving sports participants, sporting bodies and sponsors exposure.