When Netflix took its presence from 0 to 54 African countries at once about 4 years ago, there was much evidence suggesting that the streaming platform would run into a farago of unique problems. A new shift in service delivery with the social-media enabled consumer for the continent suggests that Africa’s uniqueness has once again changed the game.
Netflix has decided to experiment with cheaper, mobile-only subscriptions for African consumers. It is also commissioning more locally-produced shows that reflect the cultures and experiences of the ordinary African. There seems to be a focus on Nigeria, Africa’s biggest economy and the unofficial headquarters of the continent’s TV industry.
In the country, Netflix wants to see if viewers would buy a mobile-only service offer at NGN 1,200 a month. The figure, which is a bit shy of USD 3, is a hefty drop from the NGN 2,900 it charges for the most basic account. If the business is trying to do this in a country like Nigeria, there is no telling to what extent it has to go for other smaller African consumer markets.
Nevertheless, Netflix’s tweak may have a loophole. More than 100 million Nigerians still live on less than USD 1.90 a day. Moreover, it costs way less to access content on a streaming rival like Iroko, which is said to have the most robust catalogue of Nigerian content.
Netflix’s struggles could be intertwined with that of Iroko, which has now re-evaluated its business to survive a triple-threat ordeal. The Jason Njoku-led firm has drastically reduced the size of its teams and de-prioritize Africa in favour of its top-earning markets.
If an Africa-focused service as cheap as Iroko is adjusting to the current realities, Netflix might have to do more to succeed in not just Nigeria, but Africa entirely.
Iroko has reportedly accumulated net operating losses of more than USD 30 Mn over its lifetime while investing in African content starting with Nollywood and has been bleeding millions of dollars annually trying to build Internet TV in Africa.
After almost 5 years of walking through the door of Africa’s content consumption door, Netflix is experiencing challenges which are also present in the music streaming sector. Apparently, the cost of viewing content on such platforms remains a concern for both Africans and the service providers.
The American company is still trying to grow beyond the wealthiest segment of the population. The business is hampered by not just poverty, but also piracy and relatively low access to broadband. It currently has only 1.4 million subscribers, even though the continent has 1.2 billion people. For contrast, African pay-TV for Multichoice Group has nearly 20 million subscribers.
Reportedly, Netflix-only movies are being hacked and offered on other platforms where they can be downloaded for free. The sharing of Netflix details with multiple people may also be shaving some amount of revenue off the business. For this reason, the company wants to make sure every person using the platform actually pays for it.
The mobile-only trial did not start in Nigeria, but South Africa and Egypt. If the service is successful in these places, the streaming platform will expand the contracts to other parts of the continent on what would be a permanent basis. Perhaps, this is kind of streaming subscription Africans need, but only time will tell if there are other hidden bottlenecks.
Meanwhile, Netflix has joined hands with South African wireless carriers to add subscriptions to people’s phone bills and offer prepaid vouchers for those who do not have bank accounts. Well, “mobile” is a strong catchphrase in the African financial landscape, so there is no wonder why streaming is now involving with telecom providers.
Featured Image: Netflix
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