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lo-res_74579402-sCan anyone take on Netflix … and win? The South African media giant Naspers Ltd. is trying to do just that, with its recently launched video-on-demand service called ShowMax. Initially begun in 2015, ShowMax is now available in 45 African countries, and it hopes that its local flavor and unique understanding of the vast and diverse African market will help give it an edge.

With titles such as The Real Househelp of Kawangware and Auntie Boss, ShowMax tailors its content more to African viewers. Naspers Ltd. also understands the challenges associated with the limited infrastructure, resources, and socioeconomic wealth that confront the average, middle-class African viewer. For example, most Africans do not have a credit card to pay recurring monthly bills. Compared with many other markets, data costs in Africa are very high, and broadband connections are few and far between. Therefore, ShowMax offers more shows available for offline viewing, making it more convenient for users to download content and watch it later. Subscribers also can choose downloads of varying quality, such that if they want more content, they can access it with a lower resolution. Finally, ShowMax’s monthly price ($7.10) is lower than Netflix’s ($7.99–$9.99), and it supports mobile payment services or vouchers that consumers can purchase from banks and local businesses.

Of course, Netflix is not ready to give up without a fight. With its 86 million subscribers and content available in more than 190 countries, Netflix also has gone after some of the consumer services and benefits offered by ShowMax, to help it compete better in the growing African market. For example, Netflix recently started to allow subscribers to download shows and movies to Apple and Android phones and tablets. Although Netflix limits some of the content it makes available to African consumers, many of its most popular shows, such as Gilmore Girls and The Crown, appeal to viewers.

Compared with the global powerhouse that is Netflix, it is unclear if ShowMax will have what it takes to provide long-term competition in the video-on-demand service arena. However, with almost 600,000 new subscribers added during a six-month period in 2016, ShowMax at least seems to be giving the juggernaut a run for its money.

Discussion Questions:

  1. What are some of the local features that distinguish the process for selling video services in Africa, relative to more developed nations?
  2. What should Netflix do, in its continued response to ShowMax’s competitive efforts?

Source: Alexandra Wexler, “In Africa, a Homegrown Rival Takes on Netflix,” The Wall Street Journal, December 24, 2016