In Africa, Costly Data Slows Internet TV’s Growth: Naspers’ Showmax

By Omar Mohammed

Internet TV

Global entertainment group Naspers is trying to persuade telecoms operators in Africa to offer customers unlimited data to help boost the growth of internet television on the continent.

The high cost of data in Africa has hampered the take up of internet TV, even though the number of internet users in the region has grown rapidly.

While Showmax is seeing “healthy usage” in South Africa, the internet TV business elsewhere in the region is at a nascent stage, Naspers’ Showmax spokesman Richard Boorman said, citing data costs that are among the world’s highest.

“The catalyst will be the provision of uncapped mobile data,” he said in a phone interview on Monday.

The high data costs are limiting customer growth for Showmax, which launched in South Africa in 2015 and has since expanded to a total of 40 countries on the continent.

The number of internet users in Africa has risen from 15 million in 2005 to 213 million in 2017, according to the United Nation’s International Telecommunication Union. But affordability is still catching up.

Mobile ownership — encompassing both the cost of the phone and of data, voice and messaging services — as a share of monthly income is at 11 percent in Africa, far higher than other regions, according to a 2016 GMSA report, the global mobile operators association.

Nanjira Sambuli, who leads the World Wide Web Foundation’s advocacy efforts to promote digital equality in access to and use of the Web, said internet costs are quite prohibitive for unlocking meaningful use of the web in Africa.

The Foundation’s definition of affordable internet is 1GB of data not costing more than 2 percent of monthly income, which it found only 5 countries studied met that target.

“1GB costs an average of 18 percent of monthly income,” Sambuli said. “So you can imagine that prioritising video-on-demand might not [be] too [high] on the list of things to do with limited affordability.”

To bridge this gap Showmax is lobbying telecoms companies operating in Africa to start offering unlimited data to users, Boorman said, adding that the company was using data from other regions to make the case.

Showmax’s partnership in Poland with T-mobile, which offers subscribers Showmax content without deducting data from their accounts, shows that the economics of uncapped data can work in other countries, he said.

Showmax’s parent Naspers, which was founded in 1915 and has transformed itself from an apartheid-era newspaper publisher into a 1.5 trillion rand ($127 billion) multinational..

It has about 30,000 TV shows, movies, and documentaries through deals with companies such as HBO and Disney, among others.

It mixes international offerings with local productions to differentiate itself from competitors including Netflix, also available across Africa.

IROKOtv, a Nigerian platform focused on Nollywood content, said that its business was also challenged by data costs.

“We’ve had to go offline, and work with our customers to find other ways and means to bring them online,” IROKOtv’s CEO Jason Njoku said.

Boorman says mass adoption of internet TV in Africa is still some ways off, “but we know it’s coming, we are getting ready for it.”

($1 = 100.9000 Kenyan shillings)

Reporting by Omar Mohammed. Editing by Maggie Fick and Jane Merriman

Source: af.reuters.com

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