VOD will shake up Africa’s television industry

Posted on August 1, 2015 07:44 am

If the experience in other major television markets like Europe,Australia and North America is anything to go by, the omens are mixed for television business in Africa.In the North America, the phenomenon of “cord-cutting” where a consumer cancels their subscription to a cable or satellite pay television service, often in order to take up cheaper “over the top” services delivered online has attracted increasing attention in recent years.While pay television subscriptions have been falling in US and Canada, they are falling very slowly. A recent research showed that the 13 largest US pay-television providers that collectively represent about 95% of the market, 0.1% of the total in 2014 equivalent to 125,000 subscribers.However, revenues, profit, and employment in the sector has continued to grow.The so called “all-in-one” video streaming service many Africans have craved, bundling together leading video-on-demand services will come in handy for the viewers.It underscores how the introduction of VoD services will disrupt the television market in Africa. Even Internet Service Providers are now starting to play a role in delivering content.So what will the future of television look like in Africa?This move by different content providers raises questions for the future of television and VoD in Africa, such as: who will be the big media players in the future? Will the future of these services rest with the current traditional broadcasters, free-to-air and pay-TV? Or will Internet Service Providers play a larger role in this space in the future?

An expert working in television sector market research in Africa bullishly told me that live sports will be the reasons for customers to stay with free-to-air TV.The reality is that sports broadcasting is changing with new players such as YouTube, along with sporting organizations becoming their own broadcasters.There is no doubt that 2016 will be an interesting year for TV.Africa will see how VoD might force old players to adapt to the changing media landscape. Free to Air channels are getting involved with VoD services, with others expected to make a move in this space, although the recent dynamics in the sector could change many television network’s direction.There will also be interest around any new players that may appear as the race continues to establish some structured approach to a changing media distribution environment. In this we might see ISPs take a greater role as media outlets.Exclusive content will be the main battleground. Neither should it be forgotten that DSTV has its own VOD service and in theory, the South African company should be holding the trump card. Along with access to a huge back catalogue, DSTV service also allows subscribers to watch live television online.But the app that allows access to DSTV Play on mobile devices somewhat confusingly called DTSV mobile is as buggy and unpopular with subscribers as the new set top box.

And judging by comments on the app’s page,these problems are not new, and DSTV seems unwilling or unable to do anything about them leaving subscribers in East African region more disgusted than ever.DSTV has a number of advantages that should help it maintain its business for the time being. First, it has a large and still growing albeit very slowly subscriber base, which delivers a very healthy average revenue per user.However, high churn rates and the issues with some of its services and technologies suggest that subscribers are not all rusted on. DSTV also has an extensive catalogue of exclusive content, including an unmatched offering of sports programming with English Premier kicking off next Saturday being its premium content.It will only be a matter of time before this changes. In the latest Africa’s Internet Activity Survey, researchers found that at the end of 2014, almost 80% of all Internet connections were broadband. Over 10% of broadband subscribers have a service with an advertised download speed above 4Mbps. While many still experience lower speeds in Africa, this is still more than sufficient to receive VOD services in Standard Definition.There will be no ultimate winner in the new ‘Game of Screens’ in Africa but judging by the contestants’ moves, and by the audiences they are attracting, it will be compulsive viewing for some time to come.

Contador Harrison