Aside from the effects of the Covid-19 pandemic, wider viewing choices and changing view patterns are also expected to be big drivers of the growth in streaming video service subscriptions over the next few years.
The biggest streaming platforms in South Africa are Netflix and Showmax, with an estimated subscriber base of over 400 000 and about 595 000 respectively. But these figures are expected to soar, with Statistica projecting that the number of video streaming subscribers will reach 9 million by 2025.
While the pandemic helped drive more people to use streaming services, subscriptions growth is also being driven by internet accessibility through free public WiFi zones and workplaces, as well as the ease of access to content using just about any device, according to a November 2020 article in the Journal of Open Innovation: Technology, Market, and Complexity.
The article adds that public pressure to cut data costs has also played a role:
“The calls and recommendations for broadband data cost reduction, including pressure from the #DataMustFall campaign, predict a further reduction in data costs in the future.”
It adds: “There has already been a reduction in data costs, as MTN and Vodacom announced a data price reduction in South Africa by almost 30% following the competition council pronouncement.”
Improvements in broadband technology are also boosting streaming services. The growing penetration of 5G broadband is contributing to the growth of the market, where viewing experience and users’ needs for instant satisfaction are provided for, says Reportlinker in its ‘Video on Demand Market – Growth, Trends, and Forecasts (2020 – 2025)’ report.
Lifestyles are also changing. The tradition of gathering around the living room to watch TV or consume ‘live’ content is gradually eroding, as users now have an incomparable choice of how, when and where they can consume content.
The growth in subscription figures and the lifestyle changes only tells half the story, as the streaming platforms cater for different viewer needs. Netflix has about 3 000 titles to choose from and it is regularly updated with new movies and series, while Showmax has over 1 000 different titles and Prime Video 2 000.
All three services offer an extensive range of options. However, content is what separates the winner from the loser. In the series category, Netflix has the most options and Showmax the least.
Netflix offers a broad range of quality and unique content, but it is heavily saturated with international or American productions. Showmax on the other hand is in a better position to win over South Africans because it provides local and culturally diverse content.
While both streaming services offer packages starting at just under R100, users may prioritise video-quality, speed and data costs. Netflix is more flexible, allowing even a slower network to access the platform. A selling point for Showmax on the other hand, is that DStv Premium subscribers automatically gain access to the platform.
The JustWatch streaming guide reports that Netflix and Showmax own a 35% and 24% share of the market, respectively, with Amazon Prime Video competing for third place, holding 23% of the market.
The user penetration in video streaming in the country currently stands at 13.1% and is expected to grow to 14.4% by 2025.