ShowMax: Netflix ‘good’ for SA internet TV

ShowMax website. (Duncan Alfreds, Fin24)
ShowMax website. (Duncan Alfreds, Fin24)

Johannesburg - Naspers [JSE:NPN] owned video streaming service ShowMax has said that Netflix’s launch in South Africa will boost local awareness of internet television.

On Wednesday night, US-based Netflix officially switched on its South African service as part of a launch in an extra 130 countries.

READ: Netflix goes live in South Africa

The launch of Netflix in South Africa means that local users don’t have to resort to using the likes of virtual private networks (VPNs) to access Netflix any more.

The use of VPNs allows users to appear as if they are connecting to networks from other countries such as the US, but the practice has been legally problematic when accessing services such as Netflix owing to content rights in different countries.

Netflix’s launch in SA then takes into account local content rights, making it legal to access in the country now.

But before Netflix launched in SA, global internet and media company Naspers moved last year to launch ShowMax in the local market. The move by Naspers came after speculation emerged earlier in 2015 that Netflix would launch in SA in 2016.

“It’s good news that we have another major player in the market who’ll generate additional interest in internet TV,” Richard Boorman, head of communications at ShowMax, told Fin24.

“This is a new segment in South Africa and so far one of the major challenges has been helping people understand what subscription video on demand is and how it works. In all likelihood, the more people talking about the subject, the more we’ll see the potential customer base grow,” said Boorman.

Boorman further said that South Africans could end up subscribing to a number of online streaming services.

Over the last year, other online streaming services such as ONTAPtv.com, from Hong Kong’s PCCW, has launched in South Africa. The local unit of French telecoms company Orange Horizons has also said it plans to launch a video on demand service in South Africa this year.

“Content varies across the different providers and from what we’ve seen in other countries people often subscribe to more than one service, so it’s not an either-or situation,” Boorman said.

“We’ve got exclusive international content from studios such as HB0, and on top of this with our Mzansi and kykNET sections we’ve got local content covered as well,” he added.

Boorman went on to say that ShowMax has also differentiated itself by allowing downloads of content.

Steven Ambrose, the chief executive officer of technology research firm Strategy Worx, has also said that local users have more choice with the Netflix launch.

“The content and positioning of Netflix will make it a popular addition to a mix of conventional and streaming TV services. The pricing of Netflix and ShowMax is low enough for many households to use as many as three services,” said Ambrose.

Netflix is priced at $7.99 per month which is subject to the current weakness in the rand which was hovering around the R16 mark to the US dollar on Thursday morning. This means that Netflix would at the time of writing cost around R127 per month. ShowMax, meanwhile, is priced at a fixed rand rate of R99 per month.

“The rate of growth of ShowMax may be slowed in the short-term but the market itself will grow exponentially in the next few years,” Ambrose added.

What are your thoughts? Will ShowMax be able to compete with Netflix? And will people possibly use both services, or choose just one? Tell us your view by clicking here.

*Fin24 is part of Media24 which is owned by Naspers.

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