With a rise in the popularity of online entertainment services like Netflix and Showmax, how are more traditional PayTV subscriptions like DStv influenced?
Netflix launched in South Africa in January 2016 and has shown a strong growth among South African consumers. Currently there are more than 152 000 South Africans with a Netflix subscription and this number continues to climb as more and more citizens have access to a fast and reliable internet connection. Currently, it is estimated that at least 62% of South African households have at least one member that has reliable access to the internet.
Other sources of online entertainment like Showmax and DStv Now are showing subscriber numbers of more than four times the size of the international streaming giant, Netflix. That is among South Africans, at least. Multichoice states that their steaming audience consists of more than 595 000 users. (As estimated at end 2018)
What does this mean for DStv’s traditional PayTV service? According to Businesstech it is estimated that around 20% of users that subscribe to subscription video on demand (SVOD) services, do so with the intent of eventually cancelling their DStv accounts. Considering all these figures, this equates to a relatively small amount of users. However it is worth noting that the number of users subscribed to Netflix has shown exponential growth in the last three years. If the above mentioned trend of 20% holds true, it would mean an ever-increasing amount of PayTV account cancellations in the future.
MyBroadband stated that Multichoice is working on its own streaming-only service to combat the likes of Netflix in an attempt to grab its own market share in the newly emerging demand for purely online streaming services in South Africa. How will this new service fare in comparison to an established company like Netflix? This is a question that will only be answered in time.