Thursday, October 19, 2017

Netflix: We're not in competition with MultiChoice's DStv says the global video streaming giant as it signals a bigger push into the South African market.

Netflix says it's not in competition with MultiChoice's DStv in South Africa and Africa and that any service offering compelling content to viewers as TV moves into the future, will continue thrive.

Netflix spoke to South Africa media and answered questions from the press at its first Netflix House SA media event in a lux high street Fresnaye mansion in Cape Town this week to showcase and preview it's existing and upcoming content and to hear from the press what they need - something it said it will be doing regularly from now on.

Netflix that has rapidly gained subscribers in South Africa, is making steady inroads as a brand since it launched in South Africa and across Africa in January 2016, where, besides traditional satellite pay-TV services DStv and China's StarSat, services like Naspers' Showmax, Amazon Prime Video, DEOD, and Kwesé Play have made their appearance in a market segment of subscription video-on-demand (SVOD) services that has quickly become crowded.

When the global video streaming service was specifically asked if it's acquiring and licensing TV rights to keep it away from MultiChoice's satellite pay-TV service DStv, Netflix said that it's not acquiring show titles to stop DStv from having access to it.

"In terms of competition, we think there's room for everyone.  For us, competition is anything that's entertainment. So there's room for everyone. We're not saying that DStv shouldn't be around," Netflix told the media.

"In the United Kingdom there's always talk about the BBC and will the BBC end up dying because of Netflix? No. Because they offer something different. DStv has sports. There's always different things in every market and what Netflix is trying to do is to give people more."

Yann Lafargue, manager for technology and corporate communications at Netflix for the Europe, Middle East and Africa (EMEA) region, said that "On demand viewing is just the future of entertainment".

"Competition is healthy. Nobody has the monopoly on great stories. The companies like HBO, Amazon - those who create compelling stories that people like to watch and enjoy - they're going to survive; they're going to thrive."

"The thing that is the key is the exclusivity. If we all have the same content and you can watch the same type of content everywhere - why would you subscribe to some services specifically?" said Yann Lafargue.

"It's because it's a kind of signature show. So HBO has Game of Thrones for instance. So you want to sign up for Netflix because you want to watch Stranger Things or Narcos. And we're going to have more and more of those big hits to keep you entertained and captivated and to give you a reason to subscribe to Netflix."

He said "we know we have much more titles than the competition, but it's not about volume. For us it's not like DVDs on a shelf".

"We're trying to show around 300 shows from your algorithm on your interface. And when you start looking at something, then you will start seeing more suggestions because you like Robert DeNiro shows or something like that."

"Star Trek: DiscoveryDesignated Survivor - those shows are available here in South Africa on Netflix but not in the United States. So there is this misconception sometimes that it's always better elsewhere, the grass is greener somewhere else, and it's not the case necessarily."

Since last month subscribers of Kwesé Play can currently subscribe through that service to Netflix and be billed in rand by having the Netflix subscription added onto the Kwesé Play account but Yann Lafargue says all South Africans will eventually be able to pay in rand and not dollar.

"It's going to come. It's just a question of making sure that all the modes of payment - credit card, debit card and Paypal - everything could be shifted to rand. As Netflix grows and localises and create partnerships we do see that currency integration".

"What we see in some markets is that when you're new, people don't necessarily trust you. When you're a new brand, people wonder can I enter my credit card details on your website - is it safe?"

"So what's happening is that if you already have your internet service provider or you mobile phone contract, you go 'Okay I don't pay Netflix directly but my monthly bill just adds a line and I pay my local service provider', then it's easier and it removes friction."

"So that's the type of deals and partnerships we're trying to do."

"But pretty soon - perhaps coming in a month or so - we will have a shift to that."

Netflix on piracy and password sharing
Regarding piracy of content Yenia Zaba, the Netflix manager for media relations for Europe and Africa, says "we're not going to physically fight against piracy, we know it's out there, but piracy exists mainly because of two reasons."

"Piracy is there because content isn't accessible in another way, and B, it's not affordable."

"We don't have numbers for South Africa, but in many countries where piracy was really big - the Nordics, Australia - piracy dropped by 30% thanks to Netflix," says Yann Lafargue. "When you make it easy and the quality [of how people can watch it] is better, people move away from piracy."

"And also the frustration when you feel like a second-rung citizen - that was the case in South Africa, that was the case in France, or Germany, where you had to wait 2 years to get a TV show to become available to you, and you really want to watch it because on social media you hear about this great show - you're going to find a way to watch it."

"Netflix gives you a show, it's in South Africa, it's in France, it's in Finland, it's in South Korea, it's in the United States at the same time. So there's no incentive to do it [piracy]. And we also have 30 days for free."

In terms of password sharing between people, Yann Lafargue says "as long as it remains within the family circle I think it's fine. If you have a $7.99 plan, there's only one person who can watch at the same time."

"So if you give it to 10 of your friends, it's good, but if one of them is watching, you will be locked out of your own account. You won't be able to watch for what you're paying, so why would you do that?"

"It's fine if you want to show a piece of content to someone, but at the end of the day it's self-regulating."

"It's good also in new markets, so it's fine I guess in South Africa if you're at a coffee shop and you're telling your friend about these great documentaries that you've seen, or these amazing movies and go 'Oh, it's on Netflix, have a look, watch it'. And maybe they think I should get it as well. So it's kind of good because it's free advertising."

"We don't really have a strong stance against it, it's self-regulating by itself at the same time. And as long as it remains within a family, it's more or less okay."

"Also its more often teenagers. But when they first start working and get their first income, they often go 'I want my own account' and can afford it."