Streaming services have grown in popularity globally. The model is an extension of the old cable networks that AOL and many other telcos began in the 1990s. Streaming makes that pay-per-view model irrelevant, and securing the content (and the rights) on dedicated servers is a way to ensure your rights from hackers, pirates, and artificial intelligence (AI).
Instead of paying per video, you have a subscription to have a content basket. That basket comes with a high acquisition cost, either through buying catalogues or new “fresher” production content. Netflix’s “Bridgerton” is a good case in point.
This change in the pattern of consumption has also seen the collapse of the old content windows of Cinema, Video, then Pay TV and finally free-to-air advertising channels (such as ETV) and SABC)
This change has also led to the demise of the global cinema exhibition business, particularly in markets with large Multi-plex screens such as SA. When was the last time you went to the movies except for an appointment viewing a blockbuster: “Let’s go to the movies as opposed to what’s on Netflix?”
The British Broadcasting Corporation (BBC) invested significant cash in developing its BritBox service offering and its rollout into countries that traditionally have a substantial number of British expatriates or communities that have strong ties to the UK.
One such country is South Africa. However, the BBC announced that BritBox would be exiting South Africa on 31 August. What drove this decision? The reference article can be found here.
Refocus
The ITweb article (referenced above) points out that the BBC has decided to refocus on its more established markets and the areas of the business that will have the highest opportunities for growth, in other words, where that region subscription model and viewer growth justify the acquisition cost of the content.
Mark Walker, IDC South Africa country manager and VP of data and analytics in the Middle East, Turkey and Africa, told ITweb that the local audience for BritBox content is “niche” and, therefore, small in terms of commercial opportunity.
It did not help that DsTV have no fewer than four channels fed by BBC content including localised formats of popular shows with low production values and product placement opportunities.
“While the BritBox content is compelling and high-quality, the relevance thereof to local audiences was questionable; the target audience in SA would be small given the unique British cultural focus.
Image By: BritBox
“The variety of local content has increased substantially over the years, which makes competition more intense, as has the availability of online streaming services that cover a broad spectrum of interests.
“Additionally, to be commercially viable, a pricing structure must be in place predicated on a certain number of subscribers. This was likely not achieved.”
And therein lies the caution: Subscription services require large-scale, not just unique content. Platform competition built around content windows requires premium current content. Season 1 of Vera (as much as I personally enjoy the content) just won’t cut it.
Strategic exit
Africa Analysis SA MD Hloni Mokenela adds: “The challenge BritBox faced in the South African market may have come from an increasingly competitive market, local and international providers, content relevance to the local market and relative affordability.
“While still an important streaming platform globally, in the local market, BritBox was competing as an international platform against some of the largest global platforms in the world, such as Netflix and Disney+. These platforms have a larger content library, while BritBox is more a niche player that is considered the go-to platform for British content.”
“This makes BritBox an ideal platform for fans of British TV, which might have driven its success in some of its European markets. The challenge may, however, have been that such content did not appeal to a large enough segment of the South African market.”
It may be essential to differentiate between content affordability and subscription numbers. Nothing stopped BritBox from swopping their SA subscribers onto the British platform and charging a premium for expanded content—streaming infrastructure best suits technical broadcast consolidation of the scheduling and content management systems and processes. National Geographic runs all its services from a few consolidated broadcast centres and streaming servers. It does not have a content repository in each country, so perhaps the operators should explain how an add-on service in SA could not be included as an add-on to the UK operation.
Perhaps Showmax should have a chat. Their offering could undoubtedly be due to better UK content.
Looking at how BritBox compares to other streaming service providers, he says: “We have Showmax, Prime, Disney+ and Netflix, but most of the other streamers aren’t strong on British content. I think BBC Brit on DStv has a certain set and schedule of programming (panel shows, cosy crime), and occasionally, M-Net would show big UK entertainment shows. YouTube, Facebook and Twitter often have more clips of British comedy shows. There’s a lot of good content, but BritBox missed the chance to bring it to us.”
Signs of life
The BritBox article pointed out that, despite fierce competition and BritBox exiting the local market, analysts say SA is still fertile ground for video streaming players.
However, factors such as the relevance, quality and variety of content, affordability, accessibility, competitiveness and platform choice must be assessed carefully to maximise opportunity, says Walker.
“It is critically important to understand the profile of the target audience and match the offering to their expectations while ensuring the commercial viability of the service.”
Image By: BritBox
Mokenela concludes: “Despite the exit of BritBox, there are still signs that the market will continue to grow. This is seen in the subscriber growth of the SABC+ and eVOD streaming platforms in 2023, which reached 600,000 and 800,000, respectively. What is that in terms of penetration? There are 12 million plus households in South Africa.
“These platforms can tap into a large unaddressed market that is price-sensitive. This is where BritBox may have also fallen short, where the monthly subscription stood at R99.99 a month, while the packages for Netflix and Amazon Prime start at R79 a month.”
Unsuitable?
By all accounts, BritBox should be thriving in South Africa. As mentioned earlier, the country still has a solid British expatriate community and families with strong cultural ties to the UK.
The potential takeover of Multichoice by Canal+ and the continued presence of global streaming giants like Netflix, Disney+, and Amazon Prime indicate the vibrancy of the South African entertainment market. However, the exit of BritBox and the ongoing troubles of the SABC could potentially disrupt this landscape, leading consumers to seek alternative options.
The exit of BritBox is a significant blow, as foreign investment exiting the country is never a good thing. The reasons for the exit are still up for debate.
Consolidation of streaming services also impacts the regulator. What does ICASA have to say about the licence conditions it placed on a 100% foreign-owned subscription broadcaster? This has been punted as a barrier to the Canal+ takeover of MultiChoice.
Significant business and regulatory issues could impact and revitalise our local production industry or place it under even greater strain.
This turmoil is far from done. Disney is bleeding globally and has been considering selling their traditional TV channel business (ABC), a cash cow for the group, for a long time.
This will be a developing story.
