Netflix comes to South Africa

Netflix is coming to South Africa within the next weeks, this comes after the video streaming service confirmed that South Africa forms part of its global expansion plans. Netflix's global expansion strategy involves 'acceleration to 200 countries', or being available in almost every country in the world by the end of 2016.

It then intends to "generate material global profits" from 2017 onwards.

"We have not provided details of when we plan to go where, but you can be confident South Africa is among the countries we intend to serve sometime in the next two years," said Netflix at the time.

Netflix was asked about the January launch rumours, but said it has nothing to add at this stage.

A number of video on demand services have launched in South Africa in the past 18 months, including a Netflix competitor from Naspers called ShowMax.

ShowMax recently launched its international KykNet service, offering almost 6,000 hours of Afrikaans programming in the UK, USA, Australia, Canada, and New Zealand for $8.99 per month.

DSTV has held uncontested monopoly over South Africa's paid TV market for many years. Alternative services have materialised in recent years, but none with the features to rival DSTV. Enter, Netflix, an online streaming service that has been tipped to finally give DSTV some much needed competition.

Many believe that DSTV's revenue will suffer following the introduction of Netflix in South Africa in 2016, and it's easy to see why.

A lack of competition has allowed the broadcast service to retain high prices for their TV packages over the years. To gain access to all the channels and services DSTV has to offer, one must be subscribed to their Premium package, which goes for R799 a month. Only the higher value packages allow subscribers access to MultiChoice's BoxOffice service, which offers the ability to rent movies online movies online for 48 hours, through the decoder. The scheduled viewing and endless advertisements are also features that Netflix can easily out-do, and others have already tired.

DSTV's biggest draw will undeniably be its multiple sports channels, which broadcast live sports matches to its many subscribers. Additionally, DSTV owns full rights to the popular SuperSport channels, and its content cannot be broadcast elsewhere. Sports are a huge incentive to remain a DSTV subscriber despite better online streaming options. DSTV subscriptions are easily down-gradable, however, and it will be interesting to see if consumers remain loyal to the broadcast company, or downgrade to the lowest package for sport channels before taking out a Netflix subscription.

At R88 ($8 in America) a month with no additional fees, Netflix plans to remove its geo-blocking system, allowing all its operating countries access to the same content. With no schedule or ad breaks, Netflix gives subscribers access to thousands of hours with of content. DSTV may have a sports option, but Netflix is set to pull popular series off DSTV. Successful series, such as Orange is the New Black and House of Cards, have signed off their rights to Netflix, and they will be removed from the DSTV broadcast once Netflix enters the South African market. This will be a huge blow to DSTV. Regardless of its hold on the sport market, DSTV will have to consider dropping monthly rates and restructuring its broadcast content in order to remain a major paid TV player in South Africa.

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