Friday, November 29, 2019

A black Friday as Cell C shuts down its loss-making Cell C black video streaming service after just 2 years.

by Thinus Ferreira

It's a black Friday on Black Friday in South Africa for the struggling Cell C which is shutting down its loss-making Cell C black video streaming service two years after it launched in November 2017.

The mobile operator poured over R1 billion into the subscription video-on-demand (SVOD) service that is the next victim in the vicious streaming wars where it tried to compete in the small but growing market against rivals ranging from Netflix South Africa and Amazon Prime Video to MultiChoice's Showmax and DStv Now, PCCW Media's VIU, DEOD, Vodacom Video Play, Acorn TV and others.

Now Cell C black that failed to generate revenue, will shut down on 31 December 2019, joining a list of previous streamers who shuttered ranging from VIDI and the Altech Node to OnTapTV, Kwes√© Play and Kwes√© TV, and others.

In an SMS to Cell C black subscribers, the company says it's giving customers a Showmax voucher that will give them access to Showmax for free for 3 months and that the service will shutter on 31 December 2019.

"To fill your entertainment gap, we're giving you 3 months' free Showmax on us," says Cell C black in the SMS. 

Cell C launched Cell C black, accessed through its own set-top box (STB) called the blackBOX, as well as through web browsers in November 2017 but in late-August 2019 abruptly shut down the streaming of all of its linear TV channels, leaving only on-demand programming.

The 40 linear TV channels on Cell C black ranged from FOX and National Geographic, to TNT, Trace and Al Jazeera.

At the time Cell C black told its customers and subscribers that it was "experiencing difficulties which are affecting our live TV channels" that the IT-division is trying to solve - a notice still being displayed on the service's website.

"Our decision to reconfigure our product and services is part of putting the business on the right track," Douglas Craigie Stevenson, Cell C CEO, said in a supplied statement three months ago about the radical reduction in the services offered by and investment in Cell C black.

Candice Jones, Cell C spokesperson, told TVwithThinus on Thursday night in response to a media enquiry that Cell C black is shutting down, saying that "Following a review of the company’s product portfolio and decision to redirect expenditure to revenue generating initiatives, Cell C can confirm that it will decommission its streaming content service, black on 31 December 2019."

"Content remains part of Cell C’s broader strategy, however, we have had to carefully look at how we approach this to ensure we provide a sustainable service that customers want while at the same time offer a service that makes commercial sense to the business."

"The company suspended all linear live TV channels on the platform in September. Cell C will not be accepting any new registrations on the black service, and will be refunding customers for outright movie purchases. Existing customers will be able to use the service until 31 December 2019."

"Cell C is in the process of notifying existing customers on black of its decision to end this service."

Cell C poured R523.9 million into Cell C black during its 2017 financial year and another R523.9 million in content acquisition to buy licensing rights to TV shows, films and the streaming rights to TV channels.

In August 2018 Cell C in a statement said that 2.5 million people had "browsed" through the content on the Cell C black catalogue and sampled some of the offering with 60 000 transactions that had been completed and 260 000 customers who had made use of the free trial option.

In January 2019 Cell C black dramatically cut down its free trial period from 30 days to just 7.

In late-September Cell C in its financial report said that it's cutting back spending on Cell C black by at least R120 million and that it is "reviewing the channel options for the black video streaming service – which will ensure a saving of R120 million annually with additional savings expected as Cell C continues to right-size this business unit".

Douglas Craigie Stevenson said that its investment in the creation of Cell C black was a big mistake, noting that "Cell C black was not the right play for Cell C. We didn't have the resources to compete in that environment."