ShowMax and VU, two of South Africa\u2019s streaming video providers, will be affected by the weakening of the rand.<\/p>\n
During 2015, the rand weakened by 30% to the US dollar – with its value dropping by 13% in December alone.<\/p>\n
The decline of the rand in December and\u00a0January was attributed to President Jacob Zuma\u2019s axing of finance minister Nhlanhla Nene<\/a><\/strong> for David van Rooyen.<\/p>\n Zuma\u2019s replacement of\u00a0van Rooyen\u00a0with\u00a0Pravin Gordhan briefly strengthen the rand, but the currency currently sits at around R16 to the dollar.<\/p>\n \u201cAs with many other companies and industries, the significantly weaker rand does have an impact on our business plans,\u201d ShowMax told MyBroadband.<\/p>\n \u201cOur focus is on managing that impact and keeping pricing stable.\u201d<\/p>\n It said a weaker rand also means an automatic price increase for Netflix subscribers in South Africa, which is beneficial for ShowMax\u2019s value proposition.<\/p>\n \u201cRand weakness translates into a de-facto price increase by our international rivals, whose services are priced in [dollars], which has the\u00a0beneficial impact of making ShowMax better value for money.\u201d<\/p>\n Discover Digital, which operates VU, said\u00a0most premium international content licensing deals are done in US dollars.<\/p>\n \u201cThe slide in the rand against the greenback will have a knock-on effect on all broadcast and\/or VOD content procurement costs,” it said.<\/p>\n This may force operators to\u00a0decide if they must\u00a0subsidise costs until such time as they achieve critical mass,\u00a0or increase prices.<\/p>\n \u201cTime will tell which route they take.”<\/p>\n Expect a big DStv price hike in April<\/strong><\/a><\/p>\n Expect some ISP price increases because of weak rand<\/strong><\/a><\/p>\n Massive price hike on smartphones and tech<\/strong><\/a><\/p>\nWeaker rand means more expensive Netflix<\/h3>\n
Video content is bought in dollars<\/h3>\n
More on the slide of the rand<\/h3>\n