In a competitive market for viewers’ eyeballs and wallets, black – the new streaming platform launched last year by mobile operator Cell C – is under pressure to succeed to avoid joining the list of local players who failed dismally in this space.
South Africa with millions of cellphone users is lucrative for streaming services. A significant number of people rely on their smartphones to watch movies or binge on series. Local subscribers use multiple sim cards.
The maturing market has attracted global players such as Netflix, a streaming service based in the US. The move has disrupted the market. As a result local rivals are feeling the pressure and looking for innovative ways to compete.
In January, US-based video-on-demand service Netflix released data on the South African market showing that South Africans’ TV streaming habits are on par with international viewers.
The study found that 61% of South African viewers admitted to regularly binge watching online TV shows.
So, Cell C with more than 16.3 million customers offers black a lucrative opportunity to deliver streaming services that will rival Netflix.
But black and its local rivals – DStv’s streaming service ShowMax – are fully aware that the streaming service market is not easy, and they must work hard to attract and retain their viewers.
Surie Ramasary, chief executive of black, however, says the hype around Netflix is exaggerated.
She acknowledges Netflix as a competitor but warns that black does not see it preventing media companies from thriving locally.
Earlier this month Cell C announced that it was offering all customers free streaming on black, SA’s newest entertainment platform. The promotion is active for the next three months.
One wonders, why Cell C is not making it permanent.
Black’s partner Cell C does not have the largest share of South Africa’s cellphone market.
Bigger rival, Vodacom, which is owned by British mobile phone giant Vodafone, is not competing in the streaming market.
A clever move by Vodacom.
MTN, South Africa’s second biggest mobile phone operator, failed in its attempts to launch a direct competitor to Netflix in South Africa.
In December 2014, MTN launched its streaming service FrontRow. On 1 December 2015, MTN FrontRow was rebranded into VU and pronounced “View You”.
But on May 2017, MTN announced it was shutting down MTN VU signalling a failure to entice and retain customers.
MTN’s VU was not the first VOD service to demise in South Africa. Vidi, a Times Media Group-owned VoD platform, was shut down in February 2016.
Its closure came after a series of VOD launches in South Africa and closure of Altech Node business in October 2015.
Streaming services, as an adjacent market, offer an opportunity to quickly generate revenue by enticing existing mobile phone customers, which makes them lucrative businesses for mobile operators.
That said, Cell C seems not to be taking the streaming service for granted, through black, the mobile phone company seems to believe it has a working plan to compete aggressively against the US-based streaming giant.
CEO Ramasary says black is experiencing good growth despite the presence of competitors like Netflix, Showmax and DStv in the local market.
“Netflix has built up a global brand by offering customers movies that are no longer in the rental pay window. This means content on our platform will actually have movies before they are on Netflix,” she says.
Although, black and Cell C have not disclosed how many customers are signing every month or have taken up the service, Ramasary sees local content as being a differentiating factor.
“They do not offer local content in every market, including South Africa. This is where we will have a competitive edge. In addition we will also start to build a library of our own originals over time.”
This could actually lead to job creation and not losses.
Not to be outdone Netflix has begun to embrace local content. This week Netflix fired a first salvo, by announcing that it will embrace local content.
This proudly South African film will be joining a growing list of shows on Netflix.
Soon, the US-based company with its big pockets may commission local filmmakers to develop series, movies and documentaries.
Black is of the view that the more content players enter the market the more the choice for customers widens and they will subscribe to more than one service.
“Much will depend on how well you treat your customer and look after their needs. Customer service will be a key differentiator as well. Media companies who are poor at this will see a decline in their subscribers,” Ramasary argues.
Owing to high data prices, Pay-TV will likely continue to dominate – meaning DStv continues to rule the roost.
The local streaming market has the potential but data must really fall for many to enjoy Netflix, black, Showmax and yet-to-be launched Vodacom streaming service.
For, now only those who can afford expensive reliable internet can enjoy streaming Netflix, black and ShowMax.