When subscription video on demand (SVOD) service ShowMax launched in South Africa in August at R99 per month, it took 40% out of the VOD market pricing.
That’s the word from Stephen Watson, managing director of Discover Digital.
Asked to clarify where he got the number from, Watson said that he did a quick calculation, looking at the cost of Netflix (R165 per month, depending on exchange rate and unblocking provider) and the monthly price point of R145 (Vidi’s monthly fee).
FrontRow, the transactional and subscription VOD service that Discover Digital operates for MTN, was launched towards the end of 2014 and recently reduced its monthly fee to R119.
With Netflix set to enter the South African market before the end of 2016, and companies such as PCCW and Orange set to launch VOD services in the country soon, fierce competition in the local VOD space is anticipated.
Watson said that he expects that even more VOD services will launch during 2016, but he doesn’t believe the market can sustain all of them.
“There will be casualties come 2017,” he said, meaning that services will either be bought out or shut down.
Update: An earlier version of this article quoted Stephen Watson as saying that ShowMax had grabbed 40% of the VOD market share in South Africa. This was a mistake and we apologise to out readers and Watson for the error.