Naspers Launching Video On Demand In South Africa To Preempt Netflix

Naspers Launching Video On Demand In South Africa To Preempt Netflix

Naspers announced Wednesday it plans to move into South Africa’s video-on-demand market, saying this will give it a “fighting chance” when U.S. rival Netflix arrives, Reuters reports.

Africa’s largest company isn’t the only one trying to beat Netflix to Africa.

A crop of new tech entrepreneurs and startups in Africa and the diaspora want to become the Netflix of Africa, BusinessDayLive reports

Based in South Africa, Naspers is the largest company in Africa with a market capitalization of more than $66 billion. The multinational Internet and media group does business in more than 130 countries. Its main operations are in e-commerce.

U.S.-based Netflix said in January it will expand into around 200 countries within two years, Reuters reported. It is uncertain when Netflix will enter South Africa.

With a market value of $32.9 billion, Netflix provides on-demand Internet streaming. In July it said it had 65.55 million subscribers, including 42.3 million in the U.S. and 23.35 million internationally.

Naspers will use a mix of local and international content to build subscribers, its general manager John Kotsaftis said in a briefing, Reuters reports.

Through its video-on-demand unit, Showmax, Naspers plans to enter the market with 19,000 TV episodes, Kotsaftis said.

Initially Naspers will focus on the 1 million households in South Africa with fast Internet

“We have a platform that is completely scalable, but right now it is only about South Africa,” Kotsaftis said.

Nollywood produced 2,000 films in 2014 and generated $4.1 billion in revenue. Internet video-on-demand companies hope to move the business online away from street hawkers selling pirated DVDs for a couple of dollars, according to BusinessDayLive.

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Nigeria’s iRokoTV pioneered the sector in 2010 and was followed by other subscription services such as South Africa’s Africa Magic Go and Kenya’s BuniTV. Afrostream was started in France in 2013 by African descendants.

Other companies such as Times Media Group have introduced Netflix’s model of subscription-based viewing on demand in South Africa, Reuters reports. Times Media said it has 3,500 TV episodes and 400 movies.

Naspers said it will have content in local languages going back more than 20 years. “We are focusing on South Africa in a way Netflix will not be focusing,” Kotsaftis said, according to Reuters.

Competition is already formidable, but the scarcity of high-speed Internet access will put the brakes on the spread of video-on-demand in Africa, BusinessDayLive reports. The number of smartphones in Africa may be set to double in the next two years to more than 350-million subscribers, but entering credit card details into a website is not yet the norm in many parts of Africa.