Netflix finally announced its arrival in South Africa last week, but it looked like a false start. However, writes ARTHUR GOLDSTUCK, there is a bigger picture.
The global leader in online video-on-demand movies and TV finally arrived in South Africa last week, but something looked lost in translation. Numerous titles and shows that make the American offering so attractive were missing. Pricing was in dollars. This country wasn’t even mentioned in the official announcement made at the CES 2016 tech expo in Las Vegas.
However, this is the reality of being one of 130 new Netflix territories announced at the same time. Far more lucrative markets, including Russia, India and South Korea, were part of the same switch-on. Why on earth would it give South Africa priority in its marketing presence?
The fact is that Netflix has merely switched on local availability, rather than physically launched locally. With even its pricing for South Africa based on the US structure, while offering nothing like the US range, existing video-on-demand services like Showmax, MTN’s VU and OnTapTV are not yet quaking in their boots. They probably still have a few months to assess Netflix’s local offering and ensure they are sufficiently differentiated.
Already, locally relevant content and pricing that takes into account local circumstances act as major differentiators. As a result, Netflix faces massive challenges in entering South Africa. That doesn’t mean its entry was premature, though.
Firstly, the market has exploded with competitors and options, meaning that many of the most likely users would already be grabbed by the end of 2016. Showmax has made tremendous strides in bolstering its offering, OnTapTV is moving in aggressively, MTN has relaunched its FrontRow service as VU and Times Media’s VIDI remains an option – although reports of its demise are rife.
Secondly, fibre to the home is accelerating much more rapidly than anticipated, making this a more viable market more quickly than had been expected.
Thirdly, the longer Netflix waits, the more time the competitors have to flesh out their offering to make it comparable to or better than that of Netflix. Similar dynamics may well be at work in some of the other new territories.
Clearly, the marketing power and global reputation of Netflix will be a major advantage, but the fact that it has arrived almost by stealth does not bode well for cleaning up the market. Showmax has a heavy marketing presence here and, along with the other local players, has a strong emphasis on acquiring and generating locally relevant content. That means it will own many niches before Netflix even realises these exist.
DStv is unlikely to be threatened in the short term, but it’s clear entertainment godfather Naspers started Showmax as an insurance policy against Netflix and other video-on-demand players. The thinking is that, should people migrate from DStv to video on demand, try to keep them within the same stable.
However, the real strength of DStv lies in its live sports coverage, and that’s an area where no video on demand service can compete at this stage. People who subscribe to DStv only for movies and series can be expected to migrate rapidly to VoD, because it will simply make more sense both economically and in terms of choice of content and viewing time.
Those live sports rights, in particular English premier League football, are the jewels in DStv’s crown. In Nigeria, for example, that alone has killed off the competition. Locally, a high proportion of DStv subscribers are locked in because of sports, and DStv won’t allow slicing-and-dicing of its bouquet to offer sports exclusively at a lower cost: that would be the equivalent of rearranging the proverbial deckchairs on a Titanic.
For those who are not interested in sports, Naspers created the most viable competitor to Netflix, namely Showmax. It has far more content than Netflix presently makes available in South Africa, thanks to snapping up exclusive rights to first broadcasts of a wide range of popular series, and has a strong local content catalogue that is non-existent on Netflix for now. This all translates into Naspers cannibalising itself before Netflix can.
That said, we have not yet seen massive take-up of existing services.
The main reason is that the connectivity environment has not been very conducive to streaming video, and almost every single service misread the market in terms of pricing. MTN even relaunched its service under a new name with new pricing so as not to be seen to be cutting prices. The rest have all dropped their prices. It is very possible that, when Netflix launches more formally in South Africa, it will provide a Rand-based price that is more in line with the R89-R99 monthly subscription from other providers.
For the South African market, streaming video-on-demand is still a long way from being a mass-market offering. Its requirements in appropriate devices, reasonable bandwidth and monthly subscription fee means that it is still geared towards the upper end of the market.
However, we should never underestimate the public’s appetite for entertainment. Considering that DStv has more than 5-million households subscribed, the potential for streaming video is massive. The reason so many services have launched in this country while the environment is not yet conducive to streaming video is that they don’t want to be playing catch-up when they market is more ready. The early players will get the low-hanging fruit of ready and available customers who are installing fibre-to-the-home, and anyone delaying entry runs the risk of losing out on that lucrative market.
Ironically, the Netflix announcement is likely to do more in South Africa for Showmax than for Netflix itself. It has already boosted Showmax as it draws attention to the sector, and demands comparisons between the two, with the local service inevitably looking like the better option.
Ultimately, however, it should be borne in mind that Netflix has merely activated a South African page, meaning its open to business from South Africans, but it has not yet formally launched a physical presence in South Africa. This is why it can be argued that it was a “soft launch”, and more of an “Oh hi, South Africa” greeting than an invasion of the country.
With the rest of the world coming on board at the same time, we couldn’t expect too much local love on day one. But Netflix has one very powerful arrow in its quiver: grand plans to unify its licensing structures across the globe.
On the day of launch the official Netflix Twitter account put out this deeply significant statement of intent: “Still prisoners of territorial licensing — moving quickly to have global availability of all content on Netflix.”
When that day comes, the skirmishes for local market share will become a full blown war. Expect a few more competitors to be gone with the wind a couple of years from now.
Now for a fake Face App
Kaspersky Lab has found a malware version of the app that allows users to view their older or younger selves
Kaspersky has identified a fake application that is designed to trick users into thinking it is a certified version of FaceApp but goes on to infect victims’ devices with an adware module called MobiDash.
Once the application is downloaded from unofficial sources and installed, it simulates a failure and is subsequently removed. After that, a malicious module in the application rests discreetly on the user’s device, displaying adverts.
According to Kaspersky data, around 500 unique users have encountered the problem in two days this week, with the first detections appearing on July 7t. There were almost 800 different module modifications identified.
“The people behind MobiDash often hide their adware module under the guise of popular applications and services,” says Igor Golovin, security researcher at Kaspersky. “This means that the activities of the fake version of FaceApp could intensify, especially if we are talking about hundreds of targets in just a few days. We urge users not to download applications from unofficial sources and to install security solutions on their devices to avoid any damage.”
Kaspersky products detect and block the threat as not-a-virus:HEUR:AdWare.AndroidOS.Mobidash.
Augmented reality reveals Hidden Side of Lego haunts
South Africa’s first two Lego Certified Stores have celebrated the arrival of Lego Hidden Side, an augmented reality-enhanced play theme where kids must turn a haunted world back to normal, one ghost (and one brick) at a time.
Seamlessly integrating augmented reality (AR) with physical construction to reveal a hidden world of interactive play, Lego Hidden Side includes a series of eight ‘haunted’ buildings in the imaginary town of Newbury, each loaded (or is that haunted?) with awesome functionality and secret surprises accessed via a mobile app.
The sets come alive in an unfolding ghostly adventure once the bespoke AR app is activated, bringing the models to life and revealing a hidden world of mysteries and challenges to solve.
“The Lego Group has always been invested in tactile play, but massive leaps in AR technology have meant that the company could create an exciting experience that moves fluidly between physical and digital worlds,” says Robert Greenstein, co-founder of the Great Yellow Brick Company, license holders of South Africa’s Lego Certified Stores.
“These sets offer new ways to enhance Lego play with new action and master elements, in a new type of creative exploration where the physical world influences the AR layer, rather than the other way around,” he says.
Lego Hidden Side building sets deliver everything kids (of all ages) love and expect from a Lego building experience – the challenge of the build, a detailed model with functionality, and mini-figure characters set in a story-driven universe. Each model can be built as it appears by day – a school, house, bus, or graveyard, for example – and has transformative functionality to become the haunted version of itself.
Gameplay prompts kids to hold their phone up to the physical Lego models and interact with various elements, or “points of possession,” which release virtual ghosts that kids must then capture in the AR game to stop the haunting. Numerous scenarios create dynamic gameplay that requires kids to keep one hand in each world to progress the play.
The Lego Hidden Side app will be a free download from the App Store and Google Play, and the sets will be available at the Lego Certified Stores in Sandton City and Menlyn Park, or online at www.greatyellowbrick.co.za on 1 August 2019.