For some years now, South Africans have been circumventing regional restrictions on the US-based Netflix service, but that’s not what has changed video-on-demand in South Africa, writes ARTHUR GOLDSTUCK.
Not long after dismissing South Africa as a potential market for its movie-on-demand service, Netflix last week announced it would bring the service here within the next two years.
As vague as that timeframe may be, it set the cat among the video pigeons in this country. Expectations for Netflix transforming the local movie-watching market are, however, misplaced.
The truth is, Netflix has already transformed the local market. And no, it’s not because thousands of South Africans have found ways to bypass regional restrictions. Nor even the fact that some service providers are offering unblocking services for regional content restrictions.
These services are based on providing a DNS-masking service, which means the user’s Internet address is masked, so that a registration request appears to come from the United States rather than South Africa, for example. A simple Google search reveals dozens of options for this technique.
The problem with such services – and the thousands of South Africans who have taken advantage of them – is that it remains the arena of the techie, the geek and the early adopter. The vast majority of the population will never come close to such workarounds, as evidenced by Eighty20’s latest figures for DStv satellite TV subscriptions: one third of South African households – more than 5-million homes – have DStv. The number keeps rising, with a 23% annual growth rate recorded for the past decade.
Another statistic to pour cold bandwidth over a belief in techie-circles that Netflix is hurting DStv: its holding company, MultiChoice, last year generated revenues of R27,5-billion, and a profit of R6,3-billion. In other words, one year’s profit could fund several serious competitors to Netflix.
Meanwhile, the long-touted prospect of Netflix coming to South Africa has spurred the emergence of a variety of new players in local video-on-demand. Vidi from media group Times Media Limited and FrontRow from mobile network operator MTN both rely on broadband, while Node from technology conglomerate Altech uses a combination of satellite for downloading movies and any Internet connection for uploading requests, registrations and settings.
Apple TV is also in the mix with a local version of its movie store. Other small players peck away at the market from the edges, the equivalent of online mom-and-pop video stores.
None of these provides a comprehensive new-release service to those who are abandoning physical video stores, and even their back catalogues are disappointing for the serious movie buff.
Nevertheless, when Netflix announced in a letter to shareholders on Wednesday that it’s able to accelerate the roll-out of its international expansion plans, it was really a euphemism for saying it has to expand quickly into markets where growing numbers of competitors are staking claims to the video-on-demand territory.
That forces them to be less squeamish about conditions on the ground. Like the local newcomers, they’ve realised that, if they wait for perfect broadband, the competitive environment will become far more of a challenge than slow connections.
It is also likely they figured out that thousands of South Africans are already using their service by pretending to be elsewhere in the world.
Finally, they would have picked up on the fact that fibre-to-the-home (FTTH) services are sprouting throughout South Africa, and these are ideal for Netflix. Some of the FTTH providers may well have contacted Netflix to request that it become part of the content services offered to customers, to take full advantage of fibre speeds and justify their capacity.
Netflix will have little impact on DStv in the short term. It may slow down its growth, but there is one area where no video-on-demand service can compete, and that is live sports. This is the mainstay of DStv’s market dominance throughout Africa, and Netflix is unlikely to challenge that dominance.
Netflix will comply with regional licensing requirements, as it does in all territories. For this very reason it has tried to prevent users in non-Netflix countries like South Africa from using the service. For the same reason, sadly, its offering is unlikely to be dramatically better or different from the video-on-demand competition locally.
In short, much of the potential impact that Netflix could make on the local market has already been made.
Smart grids needed for Africa’s utilities
Power utilities across Africa should rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem, says COLIN BEANEY, Global Industry Director for Asset-intensive and Energy and Utilities at IFS.
Africa’s abundant natural resources and urgent need for power mean that it is one of the most exciting and innovative energy markets in a world that is moving rapidly towards clean, renewable energy sources. The continent’s energy industry is taking new approaches to providing unserved and underserved communities with access to power, with an emphasis on smart technologies and greener energy sources.
Power systems are evolving from centralised, top-down systems as interest in off-grid technology grows among African businesses and consumers. And according to PwC, we will see installed power capacity rise from 2012’s 90GW to 380GW in 2040 in sub-Saharan Africa. Power utilities are needing to rethink their business models and how they manage and monetise their assets to keep pace with the changing energy ecosystem.
Energy and utilities providers are transforming from centralised supply companies to more distributed, bi-directional service providers. They can only achieve this through the evolution of “smart grids” where sensors and smart meters will be able to provide the consumer with a more granular level of detail of power usage. This shift from an energy supplier to “lifestyle provider” will require a much more dynamic and optimised approach to maintenance and field service.
African companies must thus embrace digital transformation as an imperative. This transformation begins by embracing enterprise asset management to improve asset utilisation. The subsequent steps are enhancing upstream and downstream supply chain management; resource optimisation; introducing enterprise operational intelligence; embracing new technologies such as the Internet of Things, machine learning, and predictive maintenance; and becoming a smart utility.
Embracing mobility to drive ROI
Getting it right is about putting in place an enterprise backbone that accommodates asset and project management, multinational languages and currencies, new energies and markets, visualisation of the entire value chain, and mobility apps. Mobile technologies that support the field workforce have a vital role to play in driving better ROI from utilities’ investments in enterprise asset management and enterprise resource planning solutions.
Today’s leading enterprise asset management solutions feature powerful functionality for mobile management of the complete workflow of work orders – from logging status changes and updates, from receiving and creating new orders to concluding the job and reporting time, material and expenses. Such solutions are easy to deploy and intuitive for end users to learn and use.
Importantly for organisations operating in parts of the continent with poor telecoms infrastructure, connectivity is not an issue. The solutions work offline and synchronises when network connectivity is available. Users can work on any device—laptops, tablets, and smartphones—commercial or ruggedised.
By ensuring that field technicians have easy access to information and processes, the mobile solution enables technicians and maintenance engineers to easily do the following tasks:
· Create a new work order on the fly and log new opportunities
· Access both historical and planned work information when requested
· Permit customers to sign when the job is completed
· Capture measurements and inspection notes on route work orders
· Create new fault reports on routing
· Facilitate documentation through photo capturing
· Provide easy access to technical data and preventive actions.
The power of mobility allows the engineer to be the origin of all data capture on a service event. They can easily inquire on asset history, record parts used or parts needed for repair, record labour hours, and expenses as they occur, and any notes of repairs performed. When coupled with workforce management tools, such solutions unlock significant productivity gains for utilities who are trying to get the most from their workforce and assets.
Brands fall for app vanity
The experience of a mobile screen full of icons, representing independent apps that your need to open to experience them, is making less sense. Instead, businesses should serve customers with an ‘app-like’ experience inside the digital platform they already use, says PIETER DE VILLIERS, Group CEO at Clickatell.
Many brands remain obsessed with creating mobile apps. This not only defies trends that point to increasing consumer app apathy, but can exclude a sizeable portion of your customers in emerging economies. Companies need to engage with their users where they are rather than forcing them onto an app, in what can only be described as brand vanity.
In 2017 there were around 2.2 million apps available in the iOS app store and over 3 million on Google Play. And, while the number of apps being downloaded continues to rise, analysis shows that consumers are only using 30 apps per month and accessing just 9 on a day-to-day basis.
While these numbers still seem attractively high, in reality the majority of the apps we use are for messaging (like Facebook Messenger, WhatsApp, and WeChat) and our social networking, gaming, leisure, dating or utility activities.
Despite the facts, the application strategy as the holy grail for digital transformation is still being pushed even within large progressive brands. What’s more, some advertising agencies and digital consultants are still pushing apps as the best means for companies to connect with their customers. This has resulted in some organisations stubbornly doubling down on app strategies which are simply not showing return on investment (ROI).
It’s not immediately clear to us whether the fascination with apps is a roll-over from long overdue projects or whether brand owners equate a mobile-first strategy with a mobile app. Mobile-first in 2018 means customer first, and therefore embracing chat commerce in order to deliver services with convenience and simplicity in mind.
Why apps won’t win the internet
The problem with apps goes beyond user fatigue. In the first instance, many apps are poorly designed, assuming technical sophistication which may not match reality for the average customer. Poor user interfaces and attempts to provide complex engagement can result in even the best ideas missing their targets due to lack of engagement.
Secondly, we all know that economic realities drive consumer behaviour. In Africa, new mobile phone users typically opt for feature phones over smartphones. With a longer battery life and a much more accessible price point, feature phones still allow for a basic internet connection, chat platforms like WhatsApp, and call and message functionality. In these regions, the cost of an app – even if it’s free – goes far beyond installing it. Constant updates require reliable and cheap access to the internet. For the average phone owner in an emerging market, this can be a serious challenge.
Thirdly, and most importantly, apps must be relevant to their intended market. Frequency of usage is a key measure of relevance.
Apps which are used on a daily basis, like health and fitness trackers, enjoy constant engagement. New features which are added are eagerly awaited by users who are happy to update their apps.
However, users may well question the relevance of the app if they are required to conduct updates on a monthly or even weekly basis when they are only making use of the app once or twice a year.
On average, I download one app per quarter. Some I use more frequently than others, but all of these apps need to be regularly updated to maintain security, update features, and fix bugs. Many apps are pushing out updates much more frequently. I noticed over the past year that I could go from having all apps updated, to 32 apps requiring an update in five days.
When it comes to a customer-first digital strategy, companies should be asking themselves if an app is really the best way to reach their target audience.
In fact, at the end of 2016, Gartner predicted that by 2019, 20 percent of brands would ditch their mobile app. What’s more, in its 2018 predictions, the company forecast that by 2021, more than 50 percent of corporations would spend more per annum on bots and chatbots than on mobile app development.
So, we need to ask, what is the alternative for CIOs, CDOs, CMOs, and digital leaders who are looking for ways to reach, retain and grow their customer base?
The logical app alternative
The old battle advice goes: fight your enemy where they are not. Military strategists agreed that having your enemy come to you and fight you on your own terms was preferable. In a world where customers have access to thousands of offerings and millions of deals online, we need to flip that idea to Meet Your Customers Where They Are.
Any marketeer will tell you just a how difficult it is to drive app downloads. Development, cross platform testing and user interface aside, the marketing campaign required to get customers to download the app can swallow entire annual budgets and still come up short.
Looking at the facts, it makes infinitely more sense to work within the digital platforms already being used by your target audience.
Clickatell is already enabling chat commerce for some of the leading global brands with its Touch solution. This allows organisations to serve their customers with an ‘app-like’ experience inside the chat or browser platform of their customer’s choice (Twitter, Facebook Messenger, etc.)
Brands can now send an actionable Touch link such as ‘find the nearest ATM’ or ‘reset my password’ within a chat stream that will open an intuitive touch card without the user having to download an app to perform the action. Services can also be linked to the in-app experience for brands not looking to abandon their app efforts.
Working with our clients, many of whom are global innovators and thought leaders, we’ve found that having the courage to design with an ‘end user first’ approach and dealing with the back-end complexity behind the scenes results in cost efficient customer delight and ROI.