Cape Town - Internet streaming is a serious competitive threat to broadcast television in South Africa, but the technology is hamstrung by cost challenges, says an analyst.
"There is no doubt that internet streaming is a viable competitor to broadcast television... if you can afford and are able to get the requisite bandwidth," Andrew Fraser told Fin24.
Fraser is the former marketing head of Sony Mobile and a TV show producer.
Last week, multinational media and internet company Naspers launched ShowMax, an internet streaming company created to compete in a growing market with MultiChoice's BoxOffice, MTN's FrontRow and Times Media Group's Vidi.
The ShowMax launch also comes after Netflix said earlier this year that it plans to launch in more markets, such as South Africa, by the end of 2016.
But Fraser warned that while these services could potentially upend the local business model for broadcast TV, the cost of data would keep it exclusive.
"So for now, this will really be limited to the top part of the market who have access to reasonably fast DSL or fibre connections."
In the UK streaming TV is proving a serious challenge to the BBC which suffered a £150m licence shortfall as consumers switched to the alternate technology.
Streaming technology would, however, likely challenge MultiChoice first before affecting local public broadcaster the SABC, said Fraser.
"Streaming is a much bigger threat to a subscription Pay TV company like DStv, where the customer profile (especially in the Premium package) is most likely to have the required connectivity," Fraser said.
However, South Africa's impending shift to digital terrestrial television (DTT) offers broadcasters a wide range of tools to deliver content, said Fraser.
SA missed the international June 2015 International Telecommunications Union (ITU) deadline to roll out DTT. But government is getting ready to start the switch-over after it announced winners of a key set-top box tender earlier this year.
"How broadcasters will evolve as content platforms is really up to them. One thing that DTT offers is a more efficient use of bandwidth. That means being able to deliver a significantly larger amount of channels in the same bandwidth."
*Fin24 is a part of Media24, which is owned by Naspers.
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