Internet movies take market battle to pay TVs


The entry of Internet television, live streaming and subscription video-on-demand is changing the way entertainment is consumed.

In the past, to watch a movie, one needed to have a television set and pay a monthly subscription, or visit a cinema or movie den.

The trend is now changing as Internet movie streaming providers such as Showmax and Neftlix flood the market, forcing pay TVs to become innovative.

Some pay-TV firms have reviewed their subscription prices downwards to retain their customers.

According to the 2015 edition of The Ericsson Mobility report, 60 per cent of Kenyans surveyed want freedom and flexibility when watching TV and video rather than following a schedule.

In addition, 45 per cent said they were satisfied with the video and streaming content while another 49 per cent said they were happy with the speed of downloading television and video content.

Thanks to cheap Internet, you can now download and stream your favourite movies and TV shows anywhere, any time on your tablet, laptop or phone without need for a TV at low monthly fees.

High demand

While pay TV providers Zuku and DStv charge their subscribers between Sh4,500 and Sh9,000 per month to access premium packages, Internet TVs cost much lower.

Kenyans are spoilt for choice thanks to Subscription Video-On-Demand (SVOD) services that are paid for through mobile money services.

The high demand has also spurred a new wave of over-the-top content services that are disrupting the television industry.

Speaking about the consumer uptake of video-on-demand services, ShowMax Chief Executive John Kotsaftis said Kenya has all the right ingredients, including tech-savvy consumers, rapidly expanding Internet connectivity and an appetite for quality TV shows and movies.

“It doesn’t matter how good your service is if you don’t first solve the data challenge for customers, particularly for the majority of people who rely on mobile internet,” he said.

For instance, Netflix is offering a free first month of subscription and after that, you can choose the package at between $7.99 (Sh830) and $11.99 (Sh1,245).

The California-based firm began operations as a mail-order DVD service in 2007 and has grown over the years to now producing award-winning original content alongside its offering of older shows and movies.

It has more than 70 million subscribers who pay a monthly subscription fee for unlimited service.

For Showmax, you buy a three-month subscription and get one more month free.

The SVODs charge as little as Sh330 to Sh1,300 per month and Sh880 for more than 20,000 movies series and episodes. The trend has caused pay TV companies such as DStv to add channels and reduce subscription prices.

In current DStv prices, premium subscribers pay Sh8,180 per month from Sh9,400, representing a 13 per cent drop. Other packages also dropped prices by between five and 15 per cent.

And to make competition even tighter, Facebook has partnered with Nairobi firm Surf to offer low-cost Internet called Express W-fi. Daily Internet bundles cost Sh10 for 40MB and Sh20 for 100MB while weekly Express Wi-fi bundles cost Sh50 for 300MB and Sh100 for 500MB.

Last year, DStv’s parent firm Naspers said the satellite pay TV service lost 288,000 subscribers in one year as more people were not able to afford the service.

The company’s chief executive Bob Van Dijk told Mail & Guardian Africa that the South Africa-based company decided to freeze its pay TV prices as it expected the next few years to be difficult in Africa and was “on the lookout” for potential acquisition targets to grow its Internet business internationally.

Internet business accounts for about 70 per cent of Naspers’ annual revenue.

“Definitely we have found some effect since the markets are changing particularly in the markets that are out of Nairobi, but our offering is different because if you have your decoder, you can enjoy high-definition content and access it on android phones after downloading the Mobdro Online TV app,” said GOtv General Manager Simon Kariithi during the launch of four new channels.

“Our strength is countrywide coverage so we are able to provide content beyond big towns like Nairobi and we are able to provide content to places with no Internet,” he added.

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