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Netflix’s January launch in South Africa is part of the service’s global expansion plan to be available in almost every country worldwide by the end of 2016. However, it’s not clear whether South Africans will be rushing to subscribe.
Netflix CEO Reed Hastings and CFO David Wells have been quoted as saying they are confident the company will be completing its global expansion programme (a total of 200 countries) earlier than expected – and will remain profitable while doing so.
Local challenges, including access to bandwidth and missing Netflix content (and the unsuccessful launch of similar services in the market over the past year), do not seem to be deterring the company.
Claire Herman, media director at Mediology, says it’s still too soon to tell what the uptake of Netflix will be or what impact it will have on DStv. And while MultiChoice does not have any content deals in place that would prevent other services from competing in the market, it has been quoted as saying that it welcomes healthy competition and believes its offering differs from that of video-on-demand services.
Herman points out that for the same subscription fee, Showmax users are able to access more than double the content offered by Netflix. And Netflix users in South Africa pay the same amount as their overseas counterparts, but have access to far less content.
In a relatively competitive landscape – Netflix enters a market already populated by Showmax, Vidi and OnTapTV – consumers are able to compare which service offers them the best value for money. At the end of the day, it seems to be a matter of personal preference – however, Showmax appears to come out tops in terms of offering quality locally produced films and series, while to date Netflix has not customised its offering to suit local viewers. The company has earned a reputation for investing in local studios, though, so perhaps this will change in time.
Another major disadvantage to Netflix is that its subscriptions are dollar-based, which means that subscription fees fluctuate with the value of the rand. “Netflix is not everything that it’s cracked up to be so far,” says Herman.
The big take-out: Netflix needs to up its game if it hopes to succeed in South Africa, where it launched recently.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Will Netflix disrupt the market as predicted?
Netflix’s January launch in South Africa is part of the service’s global expansion plan to be available in almost every country worldwide by the end of 2016. However, it’s not clear whether South Africans will be rushing to subscribe.
Netflix CEO Reed Hastings and CFO David Wells have been quoted as saying they are confident the company will be completing its global expansion programme (a total of 200 countries) earlier than expected – and will remain profitable while doing so.
Local challenges, including access to bandwidth and missing Netflix content (and the unsuccessful launch of similar services in the market over the past year), do not seem to be deterring the company.
Claire Herman, media director at Mediology, says it’s still too soon to tell what the uptake of Netflix will be or what impact it will have on DStv. And while MultiChoice does not have any content deals in place that would prevent other services from competing in the market, it has been quoted as saying that it welcomes healthy competition and believes its offering differs from that of video-on-demand services.
Herman points out that for the same subscription fee, Showmax users are able to access more than double the content offered by Netflix. And Netflix users in South Africa pay the same amount as their overseas counterparts, but have access to far less content.
In a relatively competitive landscape – Netflix enters a market already populated by Showmax, Vidi and OnTapTV – consumers are able to compare which service offers them the best value for money. At the end of the day, it seems to be a matter of personal preference – however, Showmax appears to come out tops in terms of offering quality locally produced films and series, while to date Netflix has not customised its offering to suit local viewers. The company has earned a reputation for investing in local studios, though, so perhaps this will change in time.
Another major disadvantage to Netflix is that its subscriptions are dollar-based, which means that subscription fees fluctuate with the value of the rand. “Netflix is not everything that it’s cracked up to be so far,” says Herman.
The big take-out: Netflix needs to up its game if it hopes to succeed in South Africa, where it launched recently.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.