The rise of video-on-demand in Africa

March 7, 2015

The continuing rise of online video consumption is shaping pay-TV services into video on demand in African countries like South Africa and Nigeria.Undoubtedly, new providers of VOD are parading into the market while the continent’s pay-TV services are developing mobile applications to meet the demand.Some are entering the subscription-based TV business as a provider of an online VOD services.Such services would be available on smartphones, tablet computers, smart TVs and personal computers in the next couple of months. To offer the service, companies are acquiring broadcasting rights to premium movies and TV series from international companies like Warner Brothers, 20th Century Fox, Paramount, NBC Universal,Walt Disney and Sony Pictures with most of those deals being for three to five years. In one case that am familiar with, a company will now offer more than 3,000 blockbusters and more than 4,000 episodes of TV series. Customers who pay for viewing packages will watch the content in the language of their choice including subtitles or English subtitles, in full high definition. The key selling point of online video on demand is its similarity to home entertainment DVDs because companies can provide new movies and TV series three months after they were screened in theatres and aired on US and Canada television according the manager involved in that media company foray into Sub Saharan African market.

Three to four months after Hollywood movies are screened in theatres or TV series are aired on US television networks, they generally go to the home-entertainment business. One year after their premieres, pay-TV operators are allowed to offer such content on their platforms. And five years after their premieres, these shows can be aired on free TV. The company has invested about $25 million on this project, of which $19 million went to content rights, platform development and employment while the rest was for marketing and advertising via online, out-of-home and cinema media. In its first year, the company targets 400,000 subscribers, generating about $30 million in revenue. To reach a wider audiences, the company has enlisted strategic partners like movie rental stores, IT device distributors and an Electronics manufacturer from South Korea to provide its service on smart TVs and pay-TV platform. VOD appears to be a new offer for consumers amid the rise of mobile Internet users and increasing consumption of online video content. However, a study conducted early this year shows that the lion’s share of potential subscribers is still staying with major digital free TV stations who are also expected to offer popular movies and television series to attract viewers. Media companies that are visionary have decided to develop and launch their over-the-top services. Through such application, companies have access time-shift, two-day catch-up and movie on-demand. More than a five million mobile apps are expected to be downloaded by the end of this year across the sub saharan Africa.

Contador Harrison