MultiChoice has declined to comment on the news that Netflix plans to launch in South Africa by the end of 2016.
Netflix revealed on 22 January 2015 that it has intentions of launching in South Africa within the next two years as part of its global expansion strategy.
This came after the subscription video on demand service told shareholders it believes it can complete its international roll-outs in two years, while remaining profitable.
With a significant player like Netflix confirming plans to enter the South African market, the question is how will local broadcasters and video on demand (VOD) players react?
“We prefer not to comment,” a spokesperson for MultiChoice said.
Other broadcasters were willing to weigh in, however.
On Digital Media, which operates StarSat in South Africa, said that its direct-to-home satellite TV service is very different from the type of service Netflix offers.
The broadcaster said Netflix will bring some needed competition to the VOD market in South Africa.
“South Africa considers itself a free market society, so we should welcome competition from across the globe,” said On Digital Media.
Netflix brings challenges, and will face the challenge of poor SA broadband
E.tv agreed with On Digital Media’s assessment that Netflix wasn’t a direct competitor to broadcasters.
However, the entry of on-demand services like Netflix means more competition for eyeballs, which E.tv said will present challenges for all existing broadcasters in terms of a shift in viewing patterns.
“On-demand services like Netflix also bring new ways for content players to deliver their product and reach viewers,” said E.tv’s Monde Twala.
“E.tv is therefore following these developments with interest,” Twala said.
Twala believes that South Africa’s broadband infrastructure remains a challenge for operators such as Netflix, and the cost to the consumer will be a key concern considering the broader national development objectives.
“Another area requiring careful consideration is how to regulate such multinational content platforms,” Twala said.
SA VOD operators: unconcerned or silent
South Africa has seen a number of subscription and transactional VOD services come online in the past few months, namely Vidi, Altech Node, and MTN FrontRow.
Altech Node acknowledged receipt of our questions, but was not able to provide answers by the time of publication.
“MTN is not concerned but encouraged by new entrants in the market as we believe that competition is beneficial to the customer,” said MTN SA’s Larry Annetts.
Times Media Group, which operates Vidi, did not respond by the time of publication.