Thursday, January 7, 2016

NEUTERED NETFLIX: A gutted Netflix South Africa has a limited offering, underwhelming content - and not even some of its own shows. Here's why.

A "neutered" Netflix became accessible in South Africa on Wednesday night but South Africans who sign up need to be aware that there's some big content gaps and limitations for the expensive service due to licensing rights for hit shows already gobbled up by existing pay-TV broadcasters and other video streaming services.

Netflix that was available in 60 countries on Wednesday night launched in a further 130 countries including South Africa but what viewers and general consumers might not immediately recognise is that the global video streaming giant's content offering differs from country to country depending on intricate and complicated broadcasting and licensing deals.

Netflix South Africa's offering is dramatically curtailed from what Netflix subscribers in the United States or some other countries are getting. 

The result is that South African Netflix users are paying too much at R126 per month for a Netflix version that is limited, underwhelming and not worth the money.

Does Netflix have any previous seasons or the latest season of its own hit shows House of Cards or Orange is the New Black? Nope, because it sold its own shows to M-Net.

Does Netflix have HBO's Game of Thrones or ITV's Downton Abbey? Nope, those are signed to linear TV channels like M-Net and BBC Worldwide's BBC First on MultiChoice's DStv with the rights to previous seasons of both those shows held by Naspers' ShowMax.

In the same way literally hundreds of TV shows are missing from Netflix's South African version because the global streaming giant doesn't have the rights and can't show it.

Netflix was clearly more focused on hoping to try and make a splash by launching in 130 countries at the same time than actually caring about South Africa specifically and what specifically its service and content offering in South Africa would be and look like.

Does Netflix have its own buzzy and new Making a Murderer, the great and hilarious comedies Unbreakable Kimmy Schmidt and Master of None and dramas like Marco Polo, Sense8, Narcos and Marvel’s Jessica Jones? Yes, since Netflix didn't sell those rights of its own original shows.

Will Netflix subscribers in South Africa be able to watch Fuller House, the Netflix comedy spin-off of Full House when it starts in February? Very likely.

Can Netflix users download these shows on tablets and smartphones in broadband pricey and penetration limited South Africa like PCCW Global's ONTAPtv.com and ShowMax? No.

When Netflix announced in 2015 that it planned on launching in South Africa and numerous other territories during 2016, new subscription video-on-demand (SvoD) providers like ShowMax and ONTAPtv.com jumped to not only quickly create and launch commercial video streaming services but to sign content deals with distributors.

By going on a content buying spree, signing content licensing deals for their streaming services with international distributors and Hollywood studios – and including some exclusive deals for premium content – in a deliberate and pre-emptive strike they've actually neutered Netflix's launch proposition.

Strange as it might sound, the result is that ShowMax now sits with the largest video streaming content offering in South Africa – not the global Netflix.

Netflix can only add content and make it available after existing licensing rights agreements for specifically streaming content – as well as for pay-TV play-out – have lapsed. That's why Netflix for South Africa doesn't have shows like The Big Bang Theory or Bubble Guppies.

Netflix wants to make more of its own original content and is spending $5 billion this year so that it can own its own shows and movies which it can then launch simultaneously worldwide without having to struggle with a differentiated service, country to country, depending on content rights and who has what show.

Netflix says its lowering piracy of TV content as its rolling out to more countries.

"In the first 6 months after we launched in Australia and incumbent broadcasters created competing subscription video-on-demand (SVoD) services, BitTorrent usage dropped by 14%," said Ted Sarandos, Netflix chief content officer at the CES 2016 keynote address on Wednesday night.

"Global distribution [of TV shows] no longer needs to be fragmented. It needs that everyone, pretty much everywhere, should be able to see great films and TV shows at the exact same moment."

"The technology is there, it is the business models that now stand in the way. That's a big reason why we decided to do original programming," said Ted Sarandos.