It may seem a strange thing to say but Showmax is still finding its feet. Multichoice may be the powerful incumbent in the pay TV sector but it has to work out how to be a challenger with VoD. Russell Southwood talked to Niclas Ekdahl, CEO, Connected Video, Multichoice who's been in the job just over a year about how he sees things.
Niclas Ekdahl travelled an interesting road before he got to be in charge of Showmax. In Sweden, he was the founder and CEO of MTG's OTT business Viaplay before heading Ericsson's Nuvu platform. From there he segued into Naspers to lead the Connected Video segment that was then spun out with the Multichoice Group. Connected Video's core services are the VoD platform Showmax and DStv Now, the online platform for its pay TV subscribers.
In a bid to broaden its market appeal and drive up its subscriber numbers, Showmax has launched a mobile only version of the service in Kenya, Nigeria and South Africa:" We see the opportunity to tackle a different market with 3G and 4G users. Fixed broadband levels are low. Data rates are becoming more affordable".
The subscription rates are laid out below. This kind of "cut-price", only on one platform offer also allows it to see whether a price cut will actually generate larger numbers.
Kenya KS750 KS375
Nigeria N2900 N1450
South Africa R99 R49
The service was launched at the end of June/beginning July but Ekdahl is coy about numbers:"We're not sharing actual subscriber numbers but quite a few users are picking the mobile only package".
"The Nigerian market - with both standard and mobile subscribers - is a key driver for us. Nollywood content with exclusive content like Naija Big Brother is very important and it is resonating very well. There's a balance between Nollywood and Hollywood content".
Showmax has also been trying to improve its content offering over the last 12 months with a small amount of high-quality original content (see: http://bit.ly/34e34gZ), co-productions (The Roast with Comedy Central) and leveraging relationships across the wider group (a Big Brother Naija recap show called Hot Room).
Local favorites are now available on the platform at exactly the same time as they are on the pay TV linear channels. He's even talked about putting things on Showmax before it goes linear, describing this as a "mindshift" internally.
It's also tuned up popular content sections like Childrens so that it's both easier to navigate and giving parents the ability to control the content their kids watch so that it's age appropriate.
International movies remain a big draw for Showmax users and it has done a deal with Warner Bros to ensure that first pay TV window movies are on the platform at the same time as they are for premium subscribers. Some of the recent titles covered by the deal have included: Oceans 8, Crazy Rich Asians, The Meg, Aquaman, Lego Movie 2, Wonder Woman and Ready Player 1
"We also have other similar movie deals. We ask customers what they want and they usually respond movies in general, especially new Hollywood titles". It has identified three "hot" types of content: childrens' animation, local content and Hollywood TV series:"Series are still going strong. Subscribers were able to watch the last season of Game of Thrones within 24 hours of its release in the USA."
It's also going to be putting in place a new data codec to help with bandwidth and quality issues:"You use half the bandwidth with the lower bit rate".
So how quickly will Sub-Saharan Africas become a VoD-friendly environment?:"It's starting to move. In South Africa and the rest of Africa, the challenges are broadband access, speed and price. These are temporary glitches. Broadband keeps growing and prices are becoming much lower. However, even if 4G prices are cheaper, they are still not uncapped. But as these changes happen, OTT products will get bigger and bigger".
And is DStv Now changing how its pay TV subscribers watch things?:"It's a catch-up service outside South Africa and it's getting momentum. Some markets - like Ghana - are most surprising because it is at almost South African levels of penetration for DStv Now, which illustrates how things are going with the penetration of OTT services".
How will it look like in two to three years time?:"There will be way more users and subscribers. Content is going to have more local viewership and more markets. They will consume more hours of the service and I wouldn't rule out new pockets of content".
And will free-to-air and pay TV services be the losers?:"That assumes there will be losers. The worldwide trend is an increasing number of hours of viewing per day but linear viewing is in decline. It's only possible to monetize (linear) via advertising and we're seeing diminishing returns there. The African TV viewer is quite astonishing in terms of stamina in terms of hours per day. He or she watches 4.5 hours against a worldwide average of 3 hours".