Vodacom accused of providing false information to shareholders
Vodacom provided false information to shareholders about its Video Play streaming service, a well-placed source close to Video Play told MyBroadband.
Vodacom launched the Video Play service in August 2015 with only a handful of videos from eNCA, eTV, Urban Brew, and MobiTV.
The original app used spare network capacity to download and cache selected content during low-demand periods.
Customers had to buy a prepaid bundle of minutes within the app to use the service and select the content they wanted to download overnight.
There was no charge for browsing, only for the minutes of the video a user downloads.
Vodacom later switched the service to a subscription-based model that offered daily, weekly, or monthly access to the catalogue for R25, R40, or R99, respectively.
Vodacom Video Play grew its library to include several big-ticket international movies and TV shows, at one point reaching 9,000 titles.
When Vodacom started to provide shareholders with figures about its Video Play service, it looked like a runaway success.
In its September 2019 interim results, Vodacom told investors they had 1 million Video Play customers who made 14.8 million video-on-demand purchases.
Vodacom later told shareholders they had achieved over 40 million Video Play purchases in 2019.
“Vodacom’s Video Play is certainly carving out its place in the video on demand landscape in South Africa,” the company said.
Investors were impressed by the numbers, which showed that Vodacom was the first operator in South Africa to launch a successful streaming service.
However, doubts about these impressive numbers emerged after Vodacom’s integrated report for the year ended 31 March 2020 showed a completely different set of numbers.
Vodacom said, “In South Africa, Video Play provides access to local and international content, with 3.5 million Video Play purchases made during the year.”
These numbers were an order of magnitude lower than the other figures Vodacom previously provided for the same financial period.
Since then, Vodacom stopped reporting subscriber numbers or purchases related to Video Play.
The operator quietly pulled the plug on Video Play on 1 July 2022, and executives who were part of Vodacom’s Video Play are also no longer at the company.
The source told MyBroadband that Vodacom’s Video Play figures were highly inflated, and when management realised what was really happening, they pulled the plug on the service.
Vodacom mum on strange Video Play numbers
MyBroadband asked Vodacom about its conflicting Video Play purchase numbers, but the company would not answer this question.
It could also not say why its Video Play purchases suddenly plummeted — forcing it to close the service — when other streaming services blossomed in South Africa.
Instead, Vodacom said despite Video Play’s initial success, it wants to become an enabler for video streaming through its add-to-bill capability and its VodaPay Super App.
“To migrate to the marketplace offering it has been necessary to decommission the current Video Play service,” it said.
Vodacom said this involved a phased approach, with all existing Video Play subscribers migrated to a free-mode model up to 30 June 2022.
“From the 1 July 2022, the Video Play service was decommissioned to enable us to work on our revised marketplace strategy,” it said.
The explanation makes for good corporate spin, but the reality is that Vodacom would never move a million paying subscribers who made 40 million purchases to a free platform.
If Video Play grew as rapidly and was as successful as the numbers showed, Vodacom would have offered it as a streaming service in the VodaPay Super App.
Video Play also formed a core part of Vodacom’s Vision 2025. Vodacom tried to talk it away, saying it decided to partner with the best-in-breed video-streaming platforms instead.
Commenting on the departure of executives linked to Video Play, Vodacom said no employees were dismissed as part of the change in the Video Play strategy.
Vodacom said it has a robust performance management process that ensures the delivery of its strategic goals.
Timeline of Vodacom Video Play subscribers and purchase announcements
The list below provides a timeline of Vodacom’s Video Play subscribers and purchase announcements.
Note the numbers on 30 September 2019, when Vodacom claimed 14.8 million purchases in six months, and 31 March 2020, when it reported 3.5 million purchases for the whole year.
It then announced on 28 August 2020 that there were 40 million Video Play purchases in 2019, after which it never ported on Video Play again.
- Interim Results Analyst call (12 November 2018) — More than 600,000 customers are engaging and playing on the Video Play platform.
- Quarterly Results Analyst call (24 January 2019) — Our video play platform has over 700,000 active customers now.
- Annual report (31 March 2019) — During the year, Video Play performed particularly well, with over 869,000 active monthly users.
- Quarterly Results Analyst call (25 July 2019) — Video Play continues to grow and now has just under 900,000 active users paying for the services.
- Interim results (30 September 2019) — 1 million Video Play customers and 14.8 million Video on demand purchases.
- Annual report (31 March 2020) — Video Play once again performed particularly well, with 3.5 million Video Play purchases… [and] one million customers.
- Press statement (28 August 2020) — With over 40 million Video Play purchases in 2019, Vodacom’s Video Play is certainly carving out its place in the Video on Demand landscape in South Africa.
- Annual report (31 March 2021) — No mention of Video Play subscriptions or purchases.
- Annual report (31 March 2022) — No mention of Video Play subscriptions or purchases.
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