by Arthur Goldstuck (@art2gee) The arrival of a new video-on-demand (VOD) service in South Africa last month has added a new flavour to an intriguing marketplace.
When MTN announced in May 2017 it would shut down its VOD service, VU, just more than a year after Times Media lowered the curtain on a VOD service called Vidi, many assumed it was now a two-horse race between Naspers-owned ShowMax and the global giant Netflix. But the news was barely cold when a new player unveiled its offering. An online service called Digital Entertainment on Demand (DEOD) has been launched by a VOD solutions provider, Discover Digital. It happens to be the same company that provided the platform for MTN’s VU, and would have learned a few lessons from MTN’s failure to set the market alight.
Key lessons
The key lessons are fairly obvious, though:
- It requires massive marketing budgets or clever niche programming — or both — to go up against the vast offering of Netflix, even given that it has a more-limited catalogue than the original US service
- Without live sports, the bulk of the pay TV market remains firmly in the hands of MultiChoice and its DStv bouquet — with Supersport still one of the best live-sport services in the world
- The number of people with the kind of high-speed connectivity needed to watch high-definition video via the internet is still tiny, relative to the scale needed to make such a service profitable.
Nevertheless, when the first inklings of Netflix’s arrival in SA surfaced, it became clear that DStv subscribers who were only watching movies and video series would be easy pickings for the US-based provider, which has single-handedly destroyed the video rental industry in the US. As a result, Naspers decided to set up its own competitor, preferring to see customers jump ship to a sister company rather than to the competition.
Showmax’s instant success in Kenya
ShowMax has worked hard to differentiate itself, with the largest South African movie and series catalogue available from any provider. However, this doesn’t appear to have been an effective enough counter to Netflix’s secret weapon: the ability to bring its own high-quality productions to a global audience simultaneously. But there is one market where it has made a massive impact through a keen understanding of local dynamics. In Kenya, it has achieved instant success, partly through adopting the same local content strategy in SA. However, the most-important factor in its success is its understanding of the local dynamics of the economy.
It has allowed viewers to subscribe via M-PESA, the Kenyan-born mobile money service that has transformed payments in East Africa. Users may also purchase a single movie at a time, making it the most-affordable, as well as -accessible, VOD service in Africa.
Into this stormy mix, DEOD made its entry last month.
Potential winner in Sports Pack
It offers a standard selection of rental and subscription movie and video series content, but has added two elements that give it more of a YouTube than a Netflix feel. The first is a news service that includes most major news channels from around the world. Since viewers tend to stick to one or two news sources, this one is unlikely to have the competition sit up and take notice. The second new element however, is a potential winner: a Sports Pack gives access to a range of popular niche sports that have been largely ignored by mainstream TV, with the aim of giving sports participants, sporting bodies and sponsors exposure. It includes no less than five niche channels:
- Channel Edge HD — an extreme sports bouquet
- Fightbox HD — covering all forms of fighting and martial arts
- Motorvision TV — an automotive and motorsport channel
- Nautical channel — for sailing and boating enthusiasts
- Sportskool — a tuition-based channel with instructional sports content
“The new DEOD sports offering is just the first of a broader range of Discover Digital on-demand services set to propel SA niche sports into the limelight,” says Discover Digital managing director, Stephen Watson.
“Opportunity to secure coverage”
“There are probably 40 or more sports in South Africa that have thousands of participants, national championships and even international competitions, which do not enjoy airtime on traditional TV in SA. Via the DEOD sports desk, they now have an opportunity to secure coverage of their events among local fans. We also have the capacity to help sporting bodies stream, package and archive their events on any number of digital platforms for a broader international audience, which allows their sponsors to gain more exposure, better monetise their events, and showcase their participants.”
These include sports such as women’s hockey, SuperGP, mountain biking, surfing, gymnastics, tennis, netball, water sports and boxing, along with school leagues and tournaments with large followings.
Discover Digital plans to send its own experienced production team to help schools and sports bodies learn how to record, stream, archive and monetise their own content.
It is an open secret that no one may compete with DStv for the rights to major sports leagues and events. But in that very strategy lurks the massive gap that DEOD has spotted: the content MultiChoice doesn’t want but that tens of thousands of viewers do.
The cost of catching DEOD
- DEOD app: free to download for Android (from Play Store) and IOS (App Store).
- Rent a single movie: R18
- On demand: All movies, series, music: R79 a month
- All news channels: R49 a month
- All sports channels: R99 a month
- News + on demand: R99 a month
- Sports + on demand: R159
Five devices are allowed to access each subscription. All titles are initially available in standard definition. Later, DEOD will introduce Chromecast and Airplay support, along with smart TV apps for all TV brands, and HD will then be enabled.
Arthur Goldstuck heads up World Wide Worx (www.worldwideworx.com) and is editor-in-chief of Gadget. He is a consulting editor to MarkLives and our media tech columnist. Follow him on Twitter on @art2gee. This article has been republished from Gadget.
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