The effect of Netflix on South African content

Global streaming giant Netflix has become popular in South Africa.

The multi-billion dollar company has eaten into DStv’s Premium market share substantially due to its low price and extensive database of movies and series.

Netflix has also benefited from high-speed uncapped Internet becoming more widely available and affordable.

MyBroadband recently spoke to various experts about whether Netflix could overtake DStv in terms of popularity in South Africa, and they highlighted that Netflix’s affordability relative to DStv means it poses a significant threat.

MD of World Wide Worx Arthur Goldstuck said that Netflix poses a particularly significant threat to DStv’s Premium base.

The future of local content

While many South Africans are thankful for the competition Netflix has brought to the South African market, the company also brings with it a threat to local content creators.

Director at Media Monitoring Africa William Bird told MyBroadband that the SABC’s financial crisis places the weight of local content creation firmly on DStv’s shoulders.

“We know the current financial crisis facing the SABC means the role DStv plays is even more critical, so if their bottom line is down we can be certain that their support of local content will go down as well,” said Bird.

He added that while there would be positives involved should Netflix get involved in local content creation, these would be complemented by less-than-ideal side effects.

“The upside is that it means our local content people, to compete with global markets, will have to produce to the same standards – but it also means positioning content for global rather than local markets.”

Bird speculates that DStv might even consider entering into a partnership with Netflix for content.

Regardless of whether this happens, Bird believes that “with our high data costs and DStv penetration on the continent, it will not be an easy win for Netflix or similar competitors”.

ICASA on Netflix

Bird suggested that ICASA could also seek to intervene by forcing Netflix to pay the same taxes and fulfill the same BEE requirements as local broadcasting networks in South Africa.

ICASA could consider imposing local content considerations onto Netflix, too, said Bird.

However, as of now, ICASA has made it clear that Netflix has no obligation to make local content due to the fact that it is a streaming service rather than a TV licensee.

In the future, it is possible that ICASA will follow the lead set in Europe – where at least 30% of Netflix’s content is expected to be “local”.

Director of the South African National Editors’ Forum Kate Skinner stated that the government therefore needs to make a decision regarding content services like Netflix.

“I think what would be most useful is if the government clarified its position on OTT services and audio-visual content,” said Skinner.

“We need an overall policy that deals with our local commercial media players, the SABC, and the role of international players including Netflix.”

Now read: Netflix has no obligation to make South African content – ICASA

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The effect of Netflix on South African content