Africa's mobile operators have struggled with Video-on-Demand platforms and faced a number of obstacles including the shortcomings of their own networks. But at last things seem to be coming right for some of them. Russell Southwood talked to Zubair Munshi, Executive Head - Video, Vodacom about the launch of Video Play in South Africa and its future plans.
Vodacom Video Play was launched 16 June 2018 and over the seven months of its existence has garnered 2 million registered users, of which 800,000 are 30 day actives:"We're very happy with the performance that's been delivered over the first seven months".
Munshi, who spearheads the operation, has worked both in broadcasting (multichoice, eTV) and telecoms, including for MTN's Enterprise Wholesale business at one point.
He explained to me that the Vodacom Video Play offer comes in three broad categories: transactional VoD (one-off purchases), subscriber VoD and Pay Per View live TV.
In terms of the transactional video, the content available includes the latest blockbusters from all of the Hollywood studios, including titles like Black Panther and The Equalizer. It also has older Hollywood content including all the Star Wars and Harry Potter films:"You have 48 hours to watch a film and you can hop in and hop out of it".
There is currently no local content yet on the platform but they are on the brink of bringing it on board:"We're talking to potential partners and there will be announcements soon with major local guys".
On the subscription VoD side, there are two ways you can buy. Firstly, there is an "all you can eat" subscription for R99 a month. This gives you access to 18,500 titles including "the better TV series like Grey's Anatomy and series that are exclusive to us like Berlin Station and Wolf Creek".
Secondly, there are micro libraries which offer niche content like Nollywood, Bollywood, religion, fitness and lifestyle and these can all be independently subscribed to ranging from R5 a day to R99 a month.
The live streaming service is on a Pay Per View basis for things like the FA Cup where you pay R35 and get it on a full pay per view basis:"You select the game you want and you pay for it. We also offer a full season pass for diehard FA Cup fans for R249. This gives you access to all the live games and catch-up after the matches have been aired. You can also get discounts on individual matches that stay up for 7 days. It's R25 up to 2 days after the match and R5 after 2 days after the match and you get the highlights free". Payment is made through operator billing but "we'll also have third party billing in place by the end of May".
So how did Vodacom buy content rights for the service, particularly for the sports content?:" In order to launch as fast as we did, we went through content aggregator partners and got the FA Cup through an aggregator partner".
Why has this kind of VoD service not happened earlier for mobile operators?:"There's been a lot of difficulty trying to make the model work. There are three issues you come up against when doing this:
1. "There are issues around content rights and this has taken a long time. It's why we used an aggregator because it would have taken a long time for the (Hollywood) Studios to offer a different deal for emerging markets. I get where these guys are coming from. But if you consider some of our services, they go from R100 a month to R5 a day and it will be more R5 a day than R100 a month. The thinking has to be different. There needs to be a different model and that's been difficult to explain. Unless the pricing makes sense for the economies (we operate in) then you're not going to get the values".
2. "There's a certain value in being the second guy to the party. The early bird gets the worm, the second bird gets the cheese.
3. "Costs are high therefore you need to hit a fairly high number. Unless the service is low price, you'll never get to that scale. We need to be able to offer meaningful scale to the market. When we go to the market, we want to get things right".
What will it look like in three years time?:"We continue to grow on a daily basis but we see the usual seasonality. In January we saw people leaving as they cut back on spending. We expect the service to scale and definitely to increase by a multiple over three years".
"We're ambitious to roll out outside of South Africa and want to deploy the service in other markets. It's a nice regional play and there will be localization in each of the territories. We want to get into them as fast as possible. The next one is Lesotho, then Tanzania where we'll extend into local Swahili content. After that we'll go into Mozambique with Portuguese language content, then DRC with Francophone content. We'll try to do the latter together with someone else and it could make sense to have English subtitles for the expats there".
"This is the first step of many by Vodacom in this environment and we're trying to get it right. We've not moved fast and first and I think that's a good thing. We're being circumspect about how we do it. When we get it right, we'll scale very quickly.
We've learnt a few lessons along the way. Certain things work and certain things don't. We're the first in South Africa to offer live football without a subscription".