Is this the end of the road for Altech Node?

Altech Node, which was seen by many commentators as ‘South Africa’s Netflix’, is finding it tough to compete against pay-TV operator MultiChoice and other video-on-demand (VoD) services.

The performance of the Altech Node, which is owned by Altron’s TMT division, has not quite gone as planned on the market.

Altron, JSE-listed telecoms group, announced on Thursday that the recently launched Altech Node has performed below expectations, with regard to retail customer take-up.

“Altron TMT is well advanced in terms of exploring alternative opportunities for this business,” Altron said late on Thursday without providing additional information.

One wonders whether Altron TMT is planning to shut-down Altech Node or is it planning to partner with other players in the market?

What makes the Node interesting is that it is also an instant e-commerce platform that allows users to buy data, airtime and pre-paid electricity, and pay for municipal and utility services such as Eskom or Telkom – all from the comfort of their home and without the use of a computer. In addition to the Node’s entertainment capabilities is its smart TV and smart home functionality that enables users to download Android apps, access the Internet and email, and control home appliances using Node branded Smart Plugs.

It is also defined by the company as an entertainment hub, a streaming server, a Wi-Fi hotspot, an e-commerce platform, a home automation service, a home surveillance system and a Voice over IP solution – all in one and completely integrated.

For more on the Node, watch the video below:

The Node was introduced last September as a set-top-box that turns your home into a Smart Home, your TV into a Smart TV and provides over 700 hours of on-demand entertainment. But it seems to have failed to take-off.

Finweek recently reported that even though South African subscription-based video-on-demand (SVoD) services have failed to attract the expected millions of subscribers, the technology is developing at an unbelievable speed with new players trying to attract subscribers.

Unlike the local mobile cellphone sector, which managed to attract millions of subscribers when it launched 20 years ago, SVoD, which is in its infancy, seems not to be doing that well.

The delivery of video content is shifting towards subscription-based SVoD and consumption habits are fast changing – a development that provides hope for revenue streams diversification for all players involved.

Already Vidi, an online streaming service owned by Times Media Group, is providing subscription-based SVoD services at R149 a month without extra costs for data. Times Media Group owns the Sunday Times newspaper.

The country’s biggest pay-TV operator MultiChoice also provides the same services to its premium clients through DStv BoxOffice. While Altech Node, owned by JSE-listed Altron, provides subscription at R299 a month for access to older movies and TV shows, and newer movies are available for rental at between R15 and R25.

Earlier this year Naspers, the owner of MultiChoice, revealed that its DStv BoxOffice rentals have reached a massive
600 000 movies a month, which could be delivering millions in revenues similar to those earned by US-based Netflix – a global provider of on-demand internet streaming media.

That said, both Vidi and Node are not making noise about the number of subscribers on their books, which may be a sign that things are not that rosy.