Picture: REUTERS
Picture: REUTERS

MTN’s former video-on-demand provider is starting a new South African online TV service with lender Investec, just a day after its partnership with Africa’s biggest wireless operator was cancelled.

Closely held Discover Digital will provide a mix of on-demand subscription content and pay-per-view entertainment, as well as sports coverage and news services including Bloomberg TV, Discover Digital MD Stephen Watson said in an e-mailed response to questions. The product, called Digital Entertainment on Demand, effectively takes the place in the market of VU, which was scrapped by MTN on Wednesday.

Discover Digital "has been operating in the video-on-demand space for more than three years", Watson said. "There are options for Investec to become an equity partner in the business."

The new service joins a wave of online TV providers looking to grab subscribers in Africa as broadband becomes faster and affordable enough to fuel demand for the service. This poses a threat to Naspers’s DStv, which has long dominated the continent’s pay-TV market. The Cape Town-based company started Showmax, its response to the competition, two years ago. US giant Netflix expanded into Africa in January 2016.

This type of TV technology can be expanded quickly, without exorbitant infrastructure costs, according to Watson, who said: "While our immediate focus is sub-Saharan Africa, we have had interest in our services from the Middle East, Eastern Europe and South America."

MTN exit

MTN e-mailed customers to say VU would be shut down, without giving a reason. The company will provide subscribers with three months of access to Showmax as compensation, website TechCentral reported, citing MTN SA chief digital officer, Maxwell Nonge. The move comes less than two months after new CEO Rob Shuter joined from Vodafone.

Other new entries to the African market include Econet Wireless, the media company owned by Zimbabwe businessman Strive Masiyiwa; and Ericsson’s NuVu, which has partnered with Bharti Airtel in Nigeria. Iflix, a video-streaming service with customers mostly in southeast Asia which is backed by telecommunications giant Liberty Global, plans to start streaming TV shows in Africa this month.

Bloomberg

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