Why streaming services shut down in South Africa

South Africa’s content classification agency, the Film and Publications Board (FPB), has told parliament that six online distributors closed in the country because their operating costs did not justify the size of the addressable market.

The FPB said competition, access to key content, data prices, access to advertisers, and creation of local content to compete with international and local players were among the reasons the platforms shut down.

These distributors pulled out of South Africa between March 2022 and October 2024, it said.

The FPB said it currently has 14 online distributors on its books with valid online distribution agreements, with six registering between 2020 and 2021.

There are 2,000 distributors registered in South Africa overall.

Asked about the six distributors that shuttered their South African operations, an FPB spokesperson told MyBroadband that it is still seeking legal advice on whether it can disclose their names under the Protection of Personal Information Act.

While the FPB declined to disclose any names, BritBox was one prominent streaming platform that shut down its South African service in August 2024.

BritBox is operated by BBC Studios and iTV. The streaming service switched its focus to its more established global markets.

In 2017, the FPB introduced an annual licensing fee of R795,000 for online platforms to “self-classify” their content.

This was most recently amended on 4 October 2024. Online distributors now pay per title or per season, with a cap of R2,447,373.82 per year.

FPB CEO Makhosazana Lindhorst recently explained to parliament that self-classification is the same as the agency assigning age restrictions, except distributors do it themselves.

She said they monitor distributors to ensure they are classifying correctly by taking quarterly samples.

“We take the movies that they have classified and test them to ensure that the age rating that is given is correct,” she said.

“If it’s wrongly classified, we retrain them and allow them to reclassify.”

However, if they continue to classify incorrectly, the FPB will take enforcement action. However, Lindhorst said this has not yet been necessary as all registered online distributors have complied with the classification guidelines.

The FPB told MyBroadband that its licensing fees were not the reason online distributors pulled out of the country.

“The Film and Publication Board has updated its tariffs to accommodate new entrants in the industry and small distributors on the current tariffs,” the spokesperson said.

“Affordability for these distributors was not about the FPB tariffs, but rather due to competition and access to key content, data prices, access to advertisers, and creation of local content to compete with international and local players.”

Lindhorst revealed to the Parliamentary Portfolio Committee on Communications last year that Apple had refused to pay its annual licensing fee, hurting the FPB’s financials.

As a result, the FPB served Apple with a compliance notice.

She said that as a result of Apple’s non-compliance, they obtained a legal opinion that has given them various options for taking enforcement action against non-compliant distributors.

Lindhorst said they had approached the Department of Communications and Digital Technologies to find out whether it would be possible to geoblock non-compliant services in South Africa.

Apple distributes movies and TV shows through its Apple TV app, offering titles for rent and purchase. It also offers a subscription on-demand video service called Apple TV+.

Additionally, it distributes video games through its App Store.

The FPB is responsible for classifying and setting age restrictions for both kinds of content.

The FPB said that although Apple initially resisted complying with its demands, they responded positively after the agency issued them with a compliance notice.

As of November 2024, Apple has renewed its online content distributor registration and is now compliant.