When MTN announced last week it would shut down its video-on-demand (VOD) service, VU, just more than a year after Times Media lowered the curtain on a VOD service called Vidi, many assumed it was now a two-horse race between Naspers-owned ShowMax and the global giant Netflix.
But the news was barely cold when a new player unveiled its offering. An online service called Digital Entertainment on Demand (DEOD) has been launched by a VOD solutions provider, Discover Digital. They happen to be the same company that provided the platform for MTN’s VU, and would have learned a few lesson’s from MTN’s failure to set the market alight.
The key lessons are fairly obvious, though:
- It requires massive marketing budgets or clever niche programming – or both – to go up against the vast offering of Netflix, even given the fact that it has a more limited catalogue than the original US service;
- Without live sports, the bulk of the pay TV market remains firmly in the hands of Multichoice and its DStv bouquet – with Supersport still one of the best live sport services in the world;
- The number of people with the kind of high-speed connectivity needed to watch high-definition video via the Internet is still tiny, relative to the scale needed to make such a service profitable.
Nevertheless, when the first inklings of Netflix’s arrival in South Africa surfaced, it became clear that DStv subscribers who were only watching movies and video series would be easy pickings for the US-based provider, which has single-handedly destroyed the video rental industry in the USA. As a result, Naspers decided to set up its own competitor, preferring to see customers jump ship to a sister company rather than to the competition.
ShowMax has worked hard to differentiate itself, with the largest South African movie and series catalogue available from any provider. However, this does not appear to have been an effective enough counter to Netflix’s secret weapon: the ability to bring its own high-quality productions to a global audience simultaneously.
But there is one market where it has made a massive impact through a keen understanding of local dynamics. In Kenya, it has achieved instant success, partly through adopting the same local content strategy in South Africa. But the most important factor in its success is its understanding of the local dynamics of the economy.
It has allowed viewers to subscribe via M-PESA, the Kenyan-born mobile money service that has transformed payments in East Africa. Users can also purchase a single movie at a time, making it the most affordable as well as accessible VOD service in Africa.
Into this stormy mix, in the past week, DEOD made its entry.
It offers a standard selection of rental and subscription movie and video series content, but has added two elements that give it more of a YouTube than a Netflix feel.
The first is a news service that includes most major news channels from around the world. Since viewers tend to stick to one or two news sources, this one is unlikely to have the competition sit up and take notice. The second new element however, is a potential winner.
A Sports Pack gives access to a range of popular niche sports that have been largely ignored by mainstream TV, with the aim of giving sports participants, sporting bodies and sponsors exposure. It includes no less than five niche channels:
* Channel Edge HD – an extreme sports bouquet;
* Fightbox HD – covering all forms of fighting and martial arts;
* Motorvision TV – an automotive and motorsport channel;
* Nautical channel – for sailing and boating enthusiasts;
* Sportskool – a tuition based channel with instructional sports content.
“The new DEOD sports offering is just the first of a broader range of Discover Digital on-demand services set to propel South African niche sports into the limelight,” says Discover Digital managing director Stephen Watson.
“There are probably 40 or more sports in South Africa that have thousands of participants, national championships and even international competitions, which do not enjoy airtime on traditional TV in South Africa.
“Via the DEOD sports desk, they now have an opportunity to secure coverage of their events among local fans. We also have the capacity to help sporting bodies stream, package and archive their events on any number of digital platforms for a broader international audience, which allows their sponsors to gain more exposure, better monetise their events, and showcase their participants.”
These include sports like women’s hockey, SuperGP, mountain biking, surfing, gymnastics, tennis, netball, water sports and boxing, along with school leagues and tournaments with large followings.
Discover Digital plans to send its own experienced production team to help schools and sports bodies learn how to record, stream, archive and monetise their own content.
It is an open secret that no one can compete with DStv for the rights to major sports leagues and events. But in that very strategy lurks the massive gap that DEOD has spotted: the content Multichoice doesn’t want, but that tens of thousands of viewers do.
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee
The cost of catching DEOD
DEOD app: free to download for Android (from Play Store) and IOS (App Store).
Rent a single movie: R18
On Demand – All movies, series, music: R79 a month
All News channels: R49 a month
All sports channels: R99 a month
News + On demand: R99 a month
Sports + On Demand: R159
Five devices are allowed to access each subscription. All titles are initially available in Standard Definition. Later, DEOD will introduce Chromecast and Airplay support, along with Smart TV apps for all TV brands, and High-Definition will then be enabled.