media update’s David Jenkin looks at the developments shaping the rollout of VOD services across the continent. 

VOD and the new world of content consumption

VOD is all about giving more freedom to viewers. It’s best described as an interactive system that allows viewers to choose the entertainment they want from a wide selection, either in real time or as a download, to watch on their TVs, computers, or mobile devices.

Stephen Watson, MD of digital media company Discover Digital, uses the company’s partnership with Sun International, which will see the hotel group’s Most Valued Guests loyalty programme offering discounted access to Discover Digital’s premium service, Digital Entertainment on Demand (DEOD), as an example for how content consumption is changing.   

“I think we’re at the start of a very interesting journey,” he says, “Let’s just go back five years. In a hotel environment, we would pitch up and there would be an in-room entertainment offering and you’d have access to certain channels and movies in your room that you can charge to your hotel account. Now, there’s an onset of VOD and over-the-top (OTT) offerings that are effectively giving you access to content wherever you are.”

Watson says there is currently an onslaught of new services with three or four new offerings expected by the end of the year, whether VOD as part of telco-operated strategies, or OTT television as part of local broadcasters’ offerings, resulting in more and more choice for consumers.

DEOD differs from other video-on-demand services by offering a linear channel component, on-demand monthly component, and a transactional component, allowing for the rental of films on a per-title basis.

Hurdles for uptake

In terms of consumer uptake, Watson cautions, it’s a long journey.

“I think if you have aspirations of switching on a VOD service and having millions of clients in a short period of time, then choose another project,” he says. There are some interdependencies with any OTT or VOD service – an Internet connection is required, and when delivering video, even with adaptive bit-rate technology, there is a requirement for affordable data.

Chris Savides, Showmax Africa head, compares the Polish market (where Showmax is now available) to South Africa. There, consumers are offered uncapped mobile video plans. He tells Techcentral, “When someone in Warsaw comes home and fires up Showmax, they’re more than likely going to stream using Wi-Fi with a fixed-line connection. When someone in Africa comes home and feels the need to binge, they’re more than likely going to do it via a mobile connection.”

The problem for networks in Africa, he explains, is that the usage per customer would be far higher and the capacity of each mobile base station is finite, “so, if you open the taps there’s a chance the network will grind to a halt.” In addition to that, cell networks face spectrum constraints, Savides says. This means that networks are forced to split each cell into smaller cells instead of expanding the data-carrying capacity by adding additional radios.

The case for optimism

The good news, however, is that huge investment has been made in additional mobile capacity. Fibre optic cable connecting base stations allow for infinitely more backhaul capacity than the old copper lines, Savides says.  

Watson echoes his optimism, stating that data prices are going to continue decreasing, with operators continually trying to undercut each other, either through price or through adding more data value, and the rollout of optic fibre is well underway.

“I think it’s unique that Africa is actually driving better compression ratios for content,” he says, “and looking at more efficient ways to deliver content because we have broadband delivery challenges that typically mature markets might not have.”

He also points to the growing numbers of free Wi-Fi spots emerging, either as city or municipal projects, township projects, or the accommodation and hospitality industry driving free Wi-Fi in restaurants and hotels.

“I believe the download to play-back offline is something that is of much greater importance in Africa than it might traditionally be in mature markets,” he notes, with Discover Digital launching products that will allow consumers to schedule a download in order to take advantage of off-peak data.

“So I think those scenarios are more prevalent in Africa and will drive uptake, so those interdependencies are important, but you’ve got to be in it for a gradual education-based long haul process – and your business model needs to accommodate low subscriber uptake initially. You need to get through the early adoption phase, and it will take time to build critical mass.”

A boon for niche content

Watson says he firmly believes that there is space in the market for smaller players with more of a niche focus. “I think you’re crazy if you think you can take on Netflix and their four or five-billion-dollar investment in content per annum, but they’re also in a different space. I think that local video-on-demand platforms can be an unbelievable enabler for local content, for different types of content, and I think it’s got a lot of legs in the education space and in the niche sports space.”

Joanne Raphael Katz, spokesperson for PrideTV, says that VOD has been working very well for them and they have been seeing decent numbers of viewers. For niche content, she says, VOD is very exciting because people can access content from anywhere, content that would normally be near impossible to find.

She adds that as homophobia is prevalent in Africa, traditional media channels often aren’t able to provide content for the gay community without fear of a backlash, but, with VOD, the problem is eliminated and the barrier is removed. It’s part of what she describes as the end of the ‘one-size fits all’ approach to TV viewing, enabling a new phenomenon of ‘content cherry-picking’.

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Video-on-demand is a good match with rewards programmes, such as Discover Digital's partnership with Sun International. Read more in our article Sun International partners with Discover Digital.