Streaming wars come to Africa

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The recent entry of streaming service, Disney+ into the African market is the clearest indication yet that multinational players are now looking to the continent as an important area of growth.

Africa is largely an undeveloped subscription video-on-demand (SVOD) market but has high prospects for growth, driven by a rising number of subscribers – mostly a youthful and tech-savvy population that is also on the rise.

Similarly, more local service players are entering the market as incumbents set out aggressive expansion plans and content strategies to tap the market.

All these developments are igniting fierce competition in the race to capture viewership and untapped business potential.

Global business intelligence and media company, Dataxis projects the market will reach more than 15 million subscribers by 2026, a threefold increase in five years – after doubling between 2018 and 2021, as the firm points to a raging battle for eyeballs.

“Although the gap between the local player Showmax and the international player Netflix is narrowing, the low penetration rate of 38 percent in the region, combined with the launch of new actors in 2022…suggest that competition will intensify between local and international platforms to win the Sub-Saharan region,” Dataxis said it its latest research.

Showmax, run by MultiChoice, dominates the market. It had almost 2 million subscribers by the close of 2021 and the firm says this number is expected to more than double to 5 million in five years.

American subscription streaming service Netflix comes second with 1.5 million subscribers – a number seen growing to 4.7 million.

Below the two top contenders are new entrants: VideoPlay, owned by the South African mobile operator Vodacom, BAZE owned by Kenya’s biggest telco by subscriber base, Safaricom and KIWI (Côte Ouest Audiovisuel). VideoPlay has a subscriber base of 1.1 million, seen rising to 2.4 million in 2026.

Disney+, the latest entrant, currently boasts 137.7 million subscribers globally. It expects to see its subscriber base skyrocket with its launch across 42 markets – including six in Africa.

If the US-headquartered streaming service gains a significant foothold in Egypt, Morocco, Algeria, Libya, Tunisia, and South Africa – its target African countries – it would change the subscription base matrix.

In South Africa, the streamer’s first stop on the continent, Disney+ is wooing users with lower subscription costs and a line-up of local and international award-winning content.

At $7.47 per month, users can subscribe to a Standard Plan that allows them to stream concurrently on 4 devices and access unlimited downloads across 10 devices.

This is cheaper than the $14.14 a month charged by Showmax. Netflix offers prices as low as $3.11 per month, however users are only allowed one device per user. It’s only on Netflix’s Premium plan that subscribers can use up to 4 devices – at $12.62 per month.

Dataxis lists high prices among key challenges making it difficult for populations in Africa to access SVOD content. Other hurdles include unstable internet connection and lack of payment methods.

“Therefore, various initiatives are being taken to attract as many consumers as possible: mobile applications, partnerships with mobile operators, or access to free content,” notes the report.

In April, Showmax introduced Max Data Saving mode that allows users to stream a maximum of 50 MB per hour – giving subscribers more control over data use and expenses.

“Showmax is designed for Africa: a mobile-first continent where the cost of data remains a barrier to streaming,” said Barry Dubovsky, COO, MultiChoice Connected Video, during the launch.

Safaricom’s BAZE allows users to access video content through two subscription plans. An all-day pass at $0.086 – and an all-day pass with 200MB data at $0.17.

Globacom, a Nigerian multinational telecoms company also launched its VOD, Glo TV mobile app, in 2021 while Côte Ouest Audiovisuel, another key player in the African audiovisual landscape, unveiled its over-the-top (OTT) platform, KIWI, in early 2022.

Streamed video consumption is expected to grow significantly as more people subscribe to mobile phone services and internet numbers continue to swell across the continent.

According to GSMA’s Mobile Economy report 2021, 615 million people in Sub-Saharan Africa will subscribe to mobile services by 2025, equivalent to 50 percent of the region’s population – rising from 495 million mobile subscribers at the end of 2020.

Apart from pricing, competition is rising on the types of content relayed to viewers, with most players looking to skew towards local content, which is growing in popularity in Africa.

“SVOD platforms are also faced with important cultural requirements. Offering local content is an important key differentiator,” said Léa Zouein an Analyst at Dataxis.

Dataxis attributes Showmax’s success partly to its ability to offer both international and local productions, with four of its top five movies in Sub-Saharan Africa in 2021 being local productions.

Netflix has also been making strides toward building up its African film collections through co-production initiatives. It has co-productions with Nigerian Studio, Ebony Life and most of these films appear in the top ten most-watched movies in many countries.

In March 2022, during the fourth South Africa Investment Conference (SAIC), Netflix pledged R929 million to the local film industry until 2023.

“South Africa is on the cusp of something spectacular, and this is why we are making this kind of commitment to show the creative industry does have a role to play as far as pushing this country forward on its economic agenda,” Shola Sanni, the Director of Public Policy for Sub-Saharan Africa at Netflix said in a SABC News interview.

In April 2022, Netflix and Unesco shortlisted six short films “reimagining” folktales, with production being co-funded by the two brands and scheduled to premiere this year.

The short films will be created through local production companies in South Africa, Kenya, Nigeria, Uganda, Tanzania and Mauritania and presented in multiple African languages including, among others, Kiswahili, Hausa, Fulfulde, Xhosa, Luo and Runyankole. – bird story agency