Netflix Inc. the global leading movie streaming platform has concluded plans to introduce cheaper, mobile-only subscription in Nigeria and the rest of Africa in order to strengthen its presence in the country and the region as a whole in a move which appears targeted at Showmaxx’s dominance in the continent.
This is in addition to commissioning more locally produced contents and shows that depict the cultures and experiences of ordinary Africans.
Netflix Inc. became the world’s largest subscription-streaming service by flooding the market with popular content that’s cheaper than the competition. However, 5 years after it got introduced in Africa, the United States company is struggling to grow beyond the wealthiest segment of the population, in a continent held back by poverty, piracy and limited access to broadband.
This is expected to greatly increase the competition for the African market with Showmaxx, the Multichoice subsidiary, which seems to be clearly ahead and has the majority of the market share because of its more local and African content. It could also help increase its presence in the continent where it is struggling and is still a relatively small player.
According to Digital TV Research, the streaming service firm has only 1.4 million subscribers when compared to about 20 million customers that have been signed up to Multichoice Group Ltd, the leading African pay-TV firm.
With the rapid expansion of 4G mobile networks, the streaming service is given a new channel to get to audiences especially in a country like Nigeria, sub-Saharan Africa’s biggest economy and the heart of its TV industry.
Netflix plans to expand the mobile-only contracts permanently if the trials, which began in South Africa and Egypt, becomes a success. It agreed to deals with South African wireless carriers to add subscriptions to people’s phone bills and offers pre-paid vouchers for those without bank accounts. This is similar to the services that have been adopted by Showmax, MultiChoice’s streaming service.
Netflix is offering subscribers N1,200 ($2.65) a month for its mobile-only service, well below the N2,900 it’s been charging for its most basic account. However, the offer is still more expensive than the N250 per month charged by Iroko TV, a streaming platform that has the largest online catalogue of Nigerian Nollywood content giving access to over 5,000 of such movies.
But the income from Iroko’s low-price plans hasn’t been enough to cover its costs and the company is now scaling back its African operation to focus on wealthier viewers in the diaspora.
Netflix’s has moved to avoid the low production values found in a lot of Nollywood output and channel the continent’s best talent to develop slickly-made shows across every genre just like its deal with well-funded producers like Nigeria’s EbonyLife TV.
According to RBC Capital Markets analyst, Mark Mahaney, it expects to massively increase its subscribers to 500 million customers by 2030, up from 193 million as at the end of June.