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African VOD battle heats up

News, 21 August 2015

CAPE TOWN: Naspers, the South African media group, has launched a new video-on-demand service called ShowMax, the latest move by businesses keen to gain a foothold in Africa's VOD market before the entry of giants like Netflix.

Initially the Naspers service will focus on the 1m households in South Africa with good internet speeds. "We have a platform that is completely scalable, but right now it is only about South Africa," said John Kotsaftis, general manager of ShowMax.

News reports suggested, however, that Naspers is aiming to deliver video content to mobile devices across the whole continent within three years.

There are now three VOD services in South Africa, the other two being MTN FrontRow, launched last December, and VIDI, which Times Media Group introduced in September.

Netflix is expected to join them some time in 2016, but MyBroadband said South African consumers were already accessing Netlflix and Hulu via DNS-based unblocking services and virtual private networks.

Kotsaftis claimed that the content offered by ShowMax would be a deciding factor in the battles ahead. In addition to Hollywood shows, "we have a vast local content selection which Netflix will never have if they enter the market", he told CNBC Africa.

Further north, Nigeria's IrokoTV has been operating since late 2011 when it began distributing the output of the Nigerian film industry. Nollywood produced 2,000 films last year and generated $4.1bn in revenue, figures which are now attracting the attention of a new generation of VOD entrepreneurs.

Afrostream, for example, was set up by France-born Africans to target the European diaspora and Francophone Africa

But, said co-founder Tonje Bakang, "we know that the real market is in Africa, where there's a middle class of 300m people".

Data sourced from Reuters, Mail & Guardian Africa, CNBC Africa, MyBroadband; additional content by Warc staff