Streaming poaching cinema customers in South Africa

International streaming services like Netflix and Disney+ aren’t only stealing customers from traditional broadcasters like DStv, they’re poaching customers from cinema chains in the country.

This is according to multimedia and television journalism lecturer at the Durban University of Technology, Siphumelele Zondi, who added that the expansion of access to Internet connectivity in South Africa means more residents are moving to streaming services.

As a result, cinemas and traditional broadcasters are feeling the pain, with players like Nu Metro looking to diversify their content offerings to adjust to the pressures.

“As South Africans are continuing to get a lot more Internet access at home, you’re finding a lot more people getting access to these streaming services,” Zondi told 702.

“It’s not just television that’s struggling here. Cinema chains have also said that they are struggling. Ster-Kinekor in South Africa has shut down some of its cinemas.”

“Nu Metro has said it wants to diversify and go into gaming too because streaming services are also taking away their customers as people are no longer going to the cinema to watch a movie. They’re sitting at home and watching that movie,” he added.

Zondi said streaming services have also had a significant impact on traditional broadcasters’ audiences.

Sales director at Reach Africa, Leslie Adams, agrees. He said DStv is following a trend observed by satellite TV providers in major Western markets.

“DStv is following a trend that we’re seeing in the US and Western Europe, where streaming services are eating some of their lunch,” said Adams.

He explained that, unlike traditional broadcasters, streaming services offer the benefit of tailoring content to your viewing preferences. They also provide the flexibility of cancelling and resubscribing when you choose.

“Your interests will evolve and change and it may be very periodic, but now the option is available to you to just turn on and turn off,” said Adams.

DStv’s existential threat becoming reality

DStv owner MultiChoice has been aware of the threat posed by international streaming services for several years.

In a presentation to the Independent Communications Authority of South Africa in 2021, the pay-TV broadcaster described international streaming services like Netflix and YouTube as its biggest competitors.

It added that they pose “an existential competitive threat”.

However, it has since been coy whenever asked about the threat that streaming services like Netflix, Disney+, and YouTube pose.

Even South Africa’s Department of Communications and Digital Technologies has warned about the threat international streaming platforms pose.

“On-demand music and video online streaming services are seriously disrupting the industry globally,” it said in its annual performance plan for the 2024/25 financial year.

Despite the threats, MultiChoice believes it is well poised to lead the streaming industry in South Africa with its streaming service, Showmax, which it describes as the “home of local content in Africa”.

The broadcaster said the streaming platform is designed for African markets and offers viewers the continent’s “best and most-loved” stories.

“It’s also the home of HBO online in Africa as well as a broad selection of award-winning and blockbuster international movies and series, with an ever-growing catalogue of exclusive Showmax Originals and the best kids shows, as well as live sport from SuperSport on our Showmax Pro package,” it added.

MultiChoice is also aware of the high demand for international streaming services like Netflix and Disney+, and offers its subscribers the ability to access these platforms using their DStv decoder.