Wednesday, November 19, 2014

BREAKING. Netflix expanding to New Zealand and Australia in March 2015, is South Africa next?

The global video streaming service Netflix is expanding to New Zealand and Australia and has announced that it will become available in those southern hemisphere countries from March 2015. Is South Africa next?

Netflix started an aggressive roll-out across Europe in September, including countries like Germany and France and its major expansion to now include New Zealand and Australia from early in 2015 signals a strong likelihood that its international growth plans will eventually include South Africa as well where the launch of video-on-demand (VOD) services suddenly exploded the past two months.

Nothing is preventing Netflix from entering South Africa, except for the painstaking and often cumbersome process of acquiring broadcasting rights for individual programming; Netflix is currently licensing some of its high-buzz shows like House of Cards and Orange is the New Black to M-Net which is showing it on its TV channels on MultiChoice's DStv.

If Netflix eventually launches in South Africa, those titles will for instance not be on Netflix until such time as such a licensing agreement ends.

A Netflix South Africa offering, should it eventually launch, will start small just like a newly launched TV channel, mostly with library titles, and then grow and expand in volume over time as it adds more original and exclusive series and content.

Netflix first expanded into Canada in 2010, Latin America in 2011 and then the United Kingdom, Ireland and Scandinavia in 2012.

The video-streaming giant, like all VOD services, is however conscious of the end-user experience and South Africa still has a way to go in terms of not just broadband penetration and availability, but also streaming and download speeds while the cost of internet and broadband to consumers remain prohibitively high.

Players like Times Media's VIDI, Altech's Node, MobileTV which plans to launch its full service in February 2015, along with the French telecom operator Orange which wants to expand its new Dailymotion VOD offering, are suddenly all vying for a slice of the new VOD pie.

VIDI and Node offer mostly library content of old series and movies. Then there's Telkom which has plans to launch a VOD service and MultiChoice which is growing and enhancing its existing DStv BoxOffice and DStv Catch Up services and just launched its DStv internet connected services for its premium DStv Explora decoder.

Sadly, the bulk of South African consumers can't really sign up for and utilise these services which quickly gobble up gigas of data, and are handicapped as users of VOD services by slow speeds, high prices and words like "shaped" and "capped" from internet service providers.

In South Africa's favour however for a Netflix launch counts a large English-speaking consumer market, the most sophisticated digital content management rights environment on the African continent, a strong and fast-growing smartphone and WiFi market, a fast growing satellite TV market and a large and growing black middle class consumer market willing to pay for better TV and video content and who are disillusioned with the tepid TV offering of the beleaguered SABC.

The addition of New Zealand and Australia would bring the number of countries and territories enjoying Netflix to more than 50.