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THE MEDIA APRIL 2018

“Netflix is too expensive for most African homes – even in South Africa. We forecast 1.46 milion Netflix subscribers in Africa by 2022, of which 525 000 wil be in South Africa and 352 000 in Nigeria.” “MultiChoice/DStv have said it themselves: subscribers are moving to cheaper packages,” says Simon Murray, principal analyst at Digital TV Research in London. But Murray isn’t convinced that streaming services are the main threat to DStv. “… piracy and cheaper pay TV options such as StarTimes are a much greater threat,” he says. “Many pay TV operators around the world are now working with Netflix. Netflix is too expensive for most African homes – even in South Africa. We forecast 1.46 million Netflix subscribers in Africa by 2022, of which 525 000 will be in South Africa and 352 000 in Nigeria.” StarSat and GOTV have made limited inroads in South Africa, but have performed “much better elsewhere in the Anglophone countries”, he says. US research outfit, MoffettNathanson, reported earlier in 2018 that the number of consumers in the US ‘cutting the cord’ was at its highest level ever when pay TV businesses lost 762 000 subscribers in the first quarter of Q1 of 2017, shrinking 2.4% year on year. MoffettNathanson said people were watching less TV, on average 18 minutes less per day than two years before, but were watching more media content than before – just not on linear TV. SVOD services such as Netflix, Hulu and Amazon had picked up substantially. Analyst Craig Moffett said many subscribers had chosen “skinny bundles” such as Sling TV. “Cord cutting isn’t such a problem in Africa as there are few cords to cut,” Murray says. “We estimate that most SVOD viewing in Africa will take place via mobile phones. However, not only do subscribers have to pay a fee to the SVOD platform, they often have to pay high data charges to mobile operators.” DRO P IN PRE MIUM SUBSCRI BERS And that, of course, is the crux in South Africa. The costs of data preclude millions from taking advantage of streaming services. Mobile operator Cell C launched Black, a ‘pay per view’ option on mobile, in November 2017. “What we haven’t done well in South Africa is bring content in a cost effective way to the masses,” said CEO, Jose Dos Santos, at the time. Black, he said, was a “totally interactive platform” with a multi-service approach. It offers content and services such as movies, series, live TV, soccer coverage, buying tickets, betting, booking hotels and flights, music, and games. The major difference between Black and other streaming SVOD services is that pre-paid Cell C subscribers can buy content with airtime. It also concluded deals with five international soccer clubs; Barcelona, Chelsea, Liverpool, Manchester United, and Real Madrid, whose content will appear on the channel. Byron Lotter, portfolio manager at asset managers, Vestact, says “hefty prices, a slowing South African economy and certainly streaming alternatives” have contributed to the drop off in Premium subscribers. “Two years ago these alternatives were not available in South Africa.” He reckons the only cheaper packages “realistically available in South Africa are streaming services”. Anecdotal evidence suggests Premium subscribers are cutting the cord. South African journalist, Tony Jackman, wrote on his Facebook page: “DStv. Cancelled. On the 28th Byron Lotter Simon Murray The Media | wagthedog.co.za P 23


THE MEDIA APRIL 2018
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