ShowMax, Netflix and SA's disrupted TV future - TechCentral

ShowMax, Netflix and SA’s disrupted TV future

Duncan-McLeod-180-profileThe television entertainment industry in South Africa is in for significant disruption in the next 18 months. And couch potatoes look set to be the biggest beneficiaries as competition intensifies between traditional broadcasters and new Internet streaming providers.

The trigger for much of the change looks set to be Netflix, which confirmed earlier this year that South Africa will be one of the markets into which it will launch its Internet video-on-demand (VOD) services by the end of next year. The announcement was always going to ruffle feathers, especially at MultiChoice, which dominates the pay-TV market.

Indeed, Netflix’s declaration that it intends growing the number of countries in which it operates from 50 to 200, including South Africa, by December 2016 appears to have triggered a pre-emptive strike by Naspers.

The media group, which owns DStv, is set to launch a video-on-demand service this week called ShowMax. The former CEO of DStv Digital Media, John Kotsaftis — who led the launch of the Catch Up and BoxOffice products — will head up ShowMax. The new business is apparently separate to MultiChoice, perhaps signalling that Naspers is keen to foster rivalry in the group to accelerate innovation.

MultiChoice and Naspers have never taken competitive threats lying down. They were never not going to defend their ground against Netflix and other streaming providers.

More details about Naspers’s streaming TV plans will emerge on Wednesday when the group holds a press conference.

But Netflix isn’t the only rival threatening to chip away at DStv’s dominance in pay TV. Times Media Group was early to market with a streaming offering called Vidi, although it’s not clear how well it’s done. There has also already been one spectacular failure: the satellite VOD-based Altech Node, which parent Altron is now looking to offload.

Perhaps more interesting to watch will be South Africa’s big telecommunications operators, which are coming to regard VOD as a value-add for their broadband users.

MTN has already launched FrontRow, though it has hasn’t disclosed subscriber numbers. Vodacom is biding its time, but the operator is known to be testing subscription VOD offerings, which it intends providing to its fibre-to-the-home customers. Telkom has been slow in bringing an offering to market, but is also understood to be working on a solution.

As speedier broadband comes to the suburbs thanks to new fibre players and investments by Telkom in both fibre and faster copper technologies, streaming is becoming a viable alternative to DStv, especially for those who don’t want or need access to the SuperSport channels.

ShowMax will be unveiled this week

ShowMax will be unveiled this week

But it’s not only in streaming where South Africa’s TV industry is set to get more lively. It’s likely that the commercial switch-on of digital terrestrial TV will happen in the coming months. The SABC, and M-Net will all launch new terrestrial channels, and new players in free-to-air and subscription services are likely to come to market.

Then there’s On Digital Media (ODM), the parent of StarSat (formerly TopTV), which is getting near to coming out of business rescue, which it’s been in for the past three years. It’s waiting for the transfer of its licence by its regulator before finalising the rescue process. New investor, China’s StarTimes, is expected to help StarSat launch new products and services as it seeks to claw market share away from MultiChoice.

“I would expect that the relationship with StarTimes is going to bring in new innovations,” ODM’s Eddie Mbalo told me this week. Mbalo, a former ODM CEO, has been appointed as a director of the company’s newly restructured board.

Already, MultiChoice and StarTimes are fierce competitors across Africa, especially in subscription digital terrestrial television, so there’s every reason to expect the two to have a proper barney in South Africa, too.

Indeed, Mbalo signalled that ODM is ready for a fight when he said that the broadcaster has no intention of abandoning its 2013 complaint against MultiChoice at the Competition Commission over sports rights.

The battle for viewers is about to get very interesting indeed. Don’t dare change channels.

  • Duncan McLeod is TechCentral’s editor. Find him on Twitter
  • This column is also published in the Sunday Times


  1. Just more Naspers “me-too” – there is nothing new or innovative here, which is in part a reflection of who they have selected to run this lack-lustre initiative. DStv are stagnating with astonishingly poor digital talent at the top (thought leaders just don’t want to work with poor leadership) . Now that the monopolistic stranglehold on content rights gets challenged they launch a service that is an also-ran in emerging economies

  2. Ofentse Letsholo on

    We’ll just have to wait and see how all of this will turn out. As much as I’m “happy” Multichoice has started showing some change I still feel they are going to charge extra for new content but I guess we’ll have to wait for Wednesday press conference.

  3. Lynley Pillay on

    Alot of the success of services like netflix and hulu is that they have original shows that get taken into main braodcast systems. Like Orange is the new black and House of Cards and these services have the know how and experience. Also they have proper metrics to determine what will make it or will not.

    Nas Pers basically looks at what works that side and takes the top performers and throw cash at it and bring it to South Africa.

    I am sorry I will stick to Netflix and Hulu. They have their issues but they develop content and change when they need to.

    Nas pers does neither. They are only used to taking what benefits the company and could not care for the actual people that pay.

    Maybe if they develop local shows and put their money to good use and listen to people. Also 30 day trials. What can they lose?

  4. Andrew Fraser on

    “Me-too” can be successful. One thing that Naspers has that none of their local competitors have is very deep pockets. And that can be the key differentiating factor when it comes to securing the best content.

    The question is, of course, is whether this business will be set up as a competitor, having to fight against Multichoice to buy rights for the best content, or whether this “competition” will be put on ice while they hoover up all the best content, share it between them, and close out any external competitors.

    To date, Multichoice/Naspers hasn’t had to compete against a well-funded competitor for content rights. When Netflix enters the market, that will change.

  5. this is absolute crap, streaming internet in SA doesn’t work as the ISPs throttle anyone and anything they deem to be unfair usage, maybe if someone came up with a way of dethroning telkom it might work but until then we have to put up with the crap they have on dstv, sabc, etv and the like.

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