How to make it in Africa: What we can learn from Showmax’s reinvention
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Whether Showmax will deliver on its promise to ‘change the game of streaming in Africa’ remains to be seen, but so far the new version of the streamer, which launched in February this year, has been embraced by South Africans.
By Leslie Adams
Whether Showmax will deliver on its promise to “change the game of streaming in Africa” remains to be seen, but so far the new version of the streamer, which launched in February this year, has been embraced by South Africans.
For those wanting to make it in Africa, there are lessons we can learn from its about-turn, but first we need to back up a bit. Consider that when Showmax was launched in South Africa in 2015, its model was a copy-and-paste of Netflix, with similar pricing and a content library dominated by Hollywood.
This was a model that had been proven to work – at least, in First World countries or for a small percentage of South Africa’s total population – a country notorious for having the biggest gap between the haves and the have-nots in the world.
Soon, however, its subscriber growth began to stagnate and it was forced to question whether its current iteration was really the best path to growth.
A realisation must have dawned: if we want to be successful in Africa, we need to operate in an African way.
Everything it has since done – from its bundled offering and its affordable pricing model, to its curated approach when it comes to sport, and its focus on local content – all point to the fact that the streamer has looked at its market carefully, de-Americanised its offering, and created a new value proposition tailored to the African consumer.
This pivot marks a broader shift, which extends beyond the streaming sector to just about every facet of commerce. We cannot replicate business models that work in other markets and expect them to work here – we need to do things the African way.
The global deadlock
In the early golden era of streaming, the thinking was that by leaning on massive budgets and delivering content hits, success was guaranteed.
The traditional streaming model typically saw the acquisition of a classic content library, driving access through low-cost trial plans and locking in loyalty through investment into originals. Shows were dropped at a steady rate while the subscription fee was gradually raised so the user hardly felt it, kind of like the frog being boiled alive.
But eventually, the boiling point was felt. We’ve arrived at a global deadlock: subscriber bases are saturated, revenue growth has slowed, and the entry of new players means that the landscape is cluttered, with churn being the result.
Now more than ever, affordability is a priority and the array of content options is almost unlimited. Africans will always find a way to get their content fix and this insatiable hunger will come at the expense of subscriptions.
The African half-truth
There are a couple of misperceptions about Africa, or at least, long-accepted half-truths that need a more nuanced view. These include the belief that data costs are prohibitive, video content doesn’t work here, smart device access is limited, and piracy is rife (true – but this is certainly not a uniquely African problem).
Yes, data is more expensive here than in many other markets, but prices are dropping by 30% on average every three years, as government and telcos make massive strides to improve internet access.
And if streaming doesn’t work here, explain the 25.8 million South Africans that tune into YouTube every month? Or the fact that Viu, eVOD and DStv Stream account for over 300 million minutes of streamed content every month? Or that we have more than 30 premium streaming services in South Africa today – and counting?
Making it in Africa – what matters
Showmax is not the first to this party, as it has simply realised what certain emerging markets players, like Viu – which entered South Africa in 2018 and today has a large audience of monthly active users – have known for years, and that is that innovation doesn’t only come from the First World.
So for those who want to make it in Africa, it’s critical to think context and understand what makes our market unique – and then design our offering through this lens.
Consider that…
Africans are community-centric. Forget password crackdowns. Africans consume content as a community. Face it, and then embrace it so that it becomes part of the very fabric of your business.
Access is everything. Make it easy, make it affordable. Better yet, make it free. Offer a payment mechanism that works for Africa. (Hint: debit orders and steep monthly subscription fees ain’t it.) Think incremental payment bundles, mobile-data access built-in to purchase options, and ad-funded tiers.
Local wins. We all want stories that resonate with us, and local content is the pathway to viewers’ hearts. If you want to operate in Africa, you need a locally-led strategy. Full stop.
Leslie Adams is a sales director at streaming experts Reach Africa.
BUSINESS REPORT