United States-based video on demand (VoD) giant Netflix announced its surprise launch across Africa’s 54 countries on 6 January, heating up the competition for the favour of the continent’s movie and TV watchers.
Ultimately [the winner of Africa’s audiences] will be, just like everywhere else, the player that is able to offer the best quality, most relevant content
Reed Hastings, co-founder and chief executive officer of Netflix, shocked many of Africa’s media players – who had argued the company would expand elsewhere before targeting Africa – when he announced that Netflix was now available in 130 countries, including every African one. “Globally, we are now in over 70 million homes, and people watch Netflix all over the world on virtually any internet-connected device. Tune-in has been replaced by personal choice. We live in an on-demand world, and there is no going back,” Hastings proclaimed to journalists. Netflix was a prime mover in VoD, and its users currently watch in excess of 125m hours of content per day.
VoD is becoming increasingly popular worldwide as viewers opt to watch what they want, when they want and as much as they want. African start-ups were the first to spot the opportunity on the continent, with the likes of Nigeria’s iROKOtv launching in 2011 and Kenya’s Buni.tv in 2012. With localised knowledge and the capacity to adapt quickly to market demand, they had a head start in the African VoD market.
Multinational corporations were keen to follow suit. South Africa’s Times Media Group launched VIDI in 2014 and internet giant Naspers started its own VoD plat- forms, AfricaMagic GO in 2014 and ShowMax in 2015. Ericsson joined the party in November 2015 with its mobile-focused service NuVu.
With Netflix now live in Africa, could this spell trouble for local VoD providers? Definitely not, according to founder and chief executive of iROKOtv, Jason Njoku, which just announced a major partnership with France’s Canal+. He says that internet constraints – and in particular costs – mean that Africa is still a long way off from adopting video streaming.
Njoku argues: “Mobile TV, rather than VoD, is the immediate future of content consumption in Africa. I say this as, for the foreseeable future, unreliable and super- expensive internet access will not allow for consistent, quality streaming for some time.”
Njoku says Android-based mobile video services that rely on downloading will dominate the video content market in Africa in the coming years, but he adds that traditional TV will also con- tinue to be popular.
While agreeing that internet availability and costs currently prevent video streaming in Africa, Marie Lora-Mungai, founder and chief executive of Buni.tv, says VoD is nonetheless the future of video viewing in Africa. “The cost of data and internet speeds are still a major challenge to the growth of VoD in Africa, so at the moment the only people able to access this type of services are the middle class in countries where broadband internet has started to spread, like Kenya or the diaspora,” Lora-Mungai says.
She adds: “I do believe that VoD is the way forward for video in Africa, even though the market is still at an extremely early stage today in 2016. First of all, VoD is simply a global trend, with consumers worldwide demanding to view premium content anywhere and at anytime. We’re not going to come back from that.”
Home of Nollywood
The real battlefield will involve content. iROKOtv is, in its own words, known as “the home of Nollywood”. With an audience numbering in the hundreds of thousands and some watching up to five hours of Nollywood content a day, Njoku says iROKOtv remains the only place audiences worldwide can access a large volume of quality Nollywood content. Njoku sees the company as a global player, as approximately 55% of iROKOtv’s users are based in the United States and Britain.
Buni.tv’s Lora-Mungai agrees that knowledge of what consumers like watching will differentiate Africa’s homegrown providers: “Smaller players like Buni.tv can compete through their deeper knowledge of the local market, by being more nimble and adapting better to a shifting situation. However, I believe that the only true way to compete is through original content creation.” She adds: “Even though technology is a crucial component of VoD services, in the end it’s all about the content […]. Our strategy is to create more original content that people love.”
In 2015, Buni.tv partnered with production company Ten10 Films to combine all elements of the content pipeline under one umbrella: Restless Global. Through this company, the partners are identifying and developing local talent, and supporting it to create original content, which is then sold and distributed, including on Buni.tv. “Ultimately [the winner of Africa’s audiences] will be, just like everywhere else, the player that is able to offer the best quality, most relevant content,” she says.
Netflix executives seem to know that local content is its weak point, conceding that the service carries “limited” African content in “some” countries. They are quick to add that Netflix will add more local content as its popularity grows and the company begins to understand regional markets.
According to Anesu Charamba, head of information and communication technology at research company Frost & Sullivan Africa, the battle between Netflix and Africa’s existing providers will ultimately be beneficial. “Netflix’s arrival on the continent will bring about a bit of a shake-up in the digital media space, with far-reaching implications. Ultimately, the consumer is best served by the development as a result of greater competition in the market,” Charamba says. ●