My Broadband’s Jan Vermeulen says the expansion won’t cause a complete overhaul in the industry.
“Having more competitors in a space is generally a good thing for consumers; it helps keep everybody on their A game.”
Five video streaming companies have been launched in SA over the past year with Naspers moving into the business and launching ShowMax in August last year.
Vermeulen says the country’s record low against the dollar may fair better for both ShowMax and DStv.
“Looking at the current trends, I don’t think DStv is in any danger yet, chief reason being that Multichoice has locked down a lot of decent content. We are also priced in dollars, so the Netflix subscription is going to fluctuate with the rand-dollar exchange. That means every time the rand weakens, your Netflix subscription will go up.”
Trend analyst Dion Chang agrees that the impact may be small, but only in the beginning.
“In the short term, I don’t think there is going to be that much of an impact because we have prohibitive broadband costs and not everybody has that connectivity. With that said, if you start looking at all of the fibre optic providers that are starting to roll out in the big cities and suburbs, we going to have that competition really starting to get competitive in the next 24 months.”
He says Netflix may instead have a ripple effect on how we consume entertainment.
Looking at the broader trends in Africa, Chang said, “One of the biggest Telecoms companies like Safaricom just recently introduced something called the big box [a decoder] which also means that the telecoms company is moving into the entertainment space but they are also giving data to people for Wi-Fi, so they are combining entertainment and normal connectivity.”
