The rise of video-on-demand in Nigeria January 12, 2016


While many people are still in holiday mood, Netflix has caused a global stir in the social and digital space by announcing that it would add 130 countries to its reach. This will further consolidate its hold on global Internet TV network.
To those who are not aware of the company, Netflix is an American provider of on-demand Internet streaming media. It provides an array of over 10,000 movies, and a series of soap operas on its website for customers to watch on subscription.
Established in 1997, the firm has grown to some sort of phenomenon across the United States. As of September 2014, Netflix had 69.17 million subscribers in over 40 countries.
Why is the growth of online video consumption becoming important?
The demand for online content is increasing astronomically across the world. Online Video Forecasts, a report by ZenithOptimedia in conjunction with NewCast, predicts that the average amount of time people will spend consuming online video daily will increase by 23.3 per cent in 2015. This is expected to rise in 2016, providing an opportunity for people and businesses to leverage existing opportunities. Start-ups and businesses are to leverage this trend; Netflix and other video-on-demand platforms will attempt to build their businesses on this important trend.
Mark Waugh, the Global Managing Director of Newcast, believes that consumers around the world are rapidly embracing online videos because it offers them an array of engrossing content. Some of the keenest users are the young and affluent viewers who are the hardest to reach with television programmes.
Brands are finding online video a particularly effective way to reach out to these valuable audiences. They use branded and entertaining content to deepen their reach.
However, this growth is largely due to the increasing popularity of tablets, smartphones and the deepening of the Internet penetration. Before the foray of Netflix in Africa, there have been many other start-ups working on the continent. There are, for example, the popular Iroko TV, AfriNolly, Reel African, Wabona, Next Speel, Dobox and a host of others. The challenge before Netflix is how to succeed where others are still struggling to establish their presence.
As Netflix and other video-on-demand platforms seek to spread their tentacles, a cursory examination of the hurdles, competitive landscape, and factors that may shape video-on-demand industry in the next few months is necessary. Here are my thoughts on how different players may respond to the market.
Cost and broadband services
The success of any online start-up in Africa largely depends on the cost of the mobile devices and reliability of the Internet. Another angle most people do not consider is the spending power of the target demographics, including their ability to afford to pay for the service provided. Far back in 2014, Netflixspokesman, Jonathan Friedland, confirmed that Netflix had no plans to roll out in South Africa because of the limited access to fixed-line broadband, which, he said, made service in Africa expensive and unprofitable. What has changed?
As Netflix and other video-on-demand platforms seek to succeed in Africa, they need to make concrete deals that drive down the cost of broadband and ensure that the cost of subscription is affordable.
Telecoms companies
While the social media received the news of Netflix entry with excitement, telecommunications companies were busy strategising. If you think of broadband companies and telecommunications companies as pipes,Netflix service is what is needed to make them relevant. Most brands have already come out with specific packages dedicated to Netflix. A partnership with telecoms companies will be a good starting point for the firm. This is a model the Internet active Nigerians will find difficult to resist.
Hackers and the Alaba market
Talk to those who sell pirated movies on the express road and in popular market places for their experiences. The piracy market is a big one in Africa and Nigeria is a focal point for pirated movies across the continent. It will be important to consider how the democratisation of access to the popular movies and latest episodes of movie series on the Internet will affect the dark world of pirated CDs and DVDs. Will people dump unauthorised duplication for online movie streaming?
The success or failure of video-on-demand service in Africa is dependent on a few people, those who make decisions that drive the industry. Customers will be the biggest winner as the access to online media content continues to become more affordable and accessible.
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