South Africa

Contributed by Jane Shattuc (Emerson College)

Updated October 2019

Key Takeaways

In 2016 Netflix launched in South Africa as well as all 54 African nations. It dominates the South Africa streaming market with an estimated 300,000 to 400,000 subscribers who watch the streaming service primarily via their smartphones.

South Africa is the strongest economy in Africa and therefore the largest internet market in Africa. Streaming has been spurred on by the growth of the mobile phone market, but the cost of mobile data and relative lack of fixed connections remain issues in Africa. Nigeria has next largest number of streaming subscribers and Ethiopia is the third market with its budding middle class.

South African production industry has welcomed the indigenous Netflix productions and the government has been open to Netflix with little to no regulation of streaming. The lack of infrastructure, regulation and number of languages are the biggest impediments for streaming in South Africa and Africa as a whole.

South African indigenous streaming companies—ShowMax and Kwese Play—have battled to control the small part of the market left as many young South Africans have slowly abandoned terrestrial, cable, and satellite for internet television. A “hybrid and streaming only” DStv Now and Showmax users make up 9% of MultiChoice South Africa’s subscriber mix. The remainder are pay-TV users. By 2018 the parent company for ShowMax, Multichoice, had lost 100,000 subscribers since the introduction of Netflix and Amazon. In July 2019 Kwese Play dissolved in bankruptcy due to much of its funding coming from investors in economically unstable Zimbabwe.

Market

Since its inception in 1975 South African television has been dominated by public broadcasting (SABC 1 and 2) because the Afrikaner government was suspicious of the influence of television on the populace with SABC controlling all news reporting. The majority of fictional programs came from the commercial US TV because of their popular apolitical content. This programming strategy allowed the government to evade domestic topics such as apartheid (the colonial domination by white European government over the majority black population). For its first seven years SABC only broadcast in Afrikaans (the official European based language of South Africa) and English. These colonial languages denied the indigenous language speakers access to TV until 1982 when Zulu and Xhosa services were added. This limited offering changed when apartheid ended and African Nationalist Congress Party took over the government and public television in 1994. The ANC reduced the Afrikaner program portion to less than 15 percent of SABC offering and subtitled all programming in English with the assumption that everyone in South Africa spoke English.

MultiChoice is the oldest supplier of pay TV and satellite broadcasting in the country. It also has one terrestrial pay channel, M-Net. In 1995 its DStv service became the chief digital satellite network with over 200 local and international channels, broadcasting to over 11.9 million subscribers throughout Africa. MultiChoice is owned by Naspers, South Africa’s most valuable company.

MultiChoice was formed out of the subscriber-management branch of the M-Net terrestrial pay TV company, and broadcasts the full range of M-Net channels on the DStv service. The MultiChoice owned streaming platform is yet to gain power as a separate product and remains an accessory of its satellite TV subscription service. Premium subscribers of MultiChoice’s DStv get free access to Showmax—Nasper’s streaming service, which has locally-produced programs like Tali’s Wedding Diary (2018-19) and Waterfront (2017-), which are highlighted on the streaming service.

South Africans have welcomed Netflix because of its willingness to produce South African films and programs. In 2019, Netflix had an estimated 300,000 to 400,000 subscribers in South Africa, a country of approximately 58 million people according to Worldometer. By comparison, the public television network SABC1—the most watched network—has up to eight million viewers with its popular series Skeem Saam (2011-). The size of the Netflix South Africa catalogue—around 4500 titles—is slightly smaller than the US catalog. To date, YouTube―with an abundance of locally produced videos and original content―has been the most popular streaming platform in Sub-Saharan Africa. In late 2016, Amazon Prime Video launched in South Africa, as part of its global launch. About 30 million viewers globally have watched its videos in its first three years. It has shown little interest in producing locally. Only in 2018 did Netflix signal a general interest in producing South Africa content by hiring a director for acquisition for the continent. The acquiring producer is problematically charged with localizing productions also for the Middle East and Turkey. The local production choices are made in Amsterdam distant from these markets and the political and cultural particularities of various countries.

In 2019 there has been yet a further international “scramble for Africa” by the film and TV industry because it still remains one of the world’s biggest developing markets. Streaming subscriptions in Sub-Saharan Africa, meanwhile, ranged between 500,000 and 1.5 million at end of 2017. The Sub Saharan African streaming market is slowly regionalizing as it divides into three gateways: Zanzibar for East Africa, Abidjan for Francophone West Africa and Lagos for Nigeria. South Africa is a market unto itself. Streaming outside South Africa still remains a niche market. Disney+ launched in 2019 but will not be in South Africa until 2021. A second streamer, Kwesé, the Econet-owned video entertainment business, once positioned itself as a respected rival to DStv. It changed its model ending its pay TV business to focus on internet-distributed on-demand services, Kwese iflix and Kwese Play. But in 2019, iflix, a successful Southeast Asian streamer, pulled out of Kwese iflix channel and Kwese Play. Kwese Play went bankrupt due to the economic instability of Zimbabwe where its funders were located. Cash shortfalls at private networks have generally reduced the aims of the streaming industry across Africa.

Regulation

The Independent Communications Authority of South Africa (ICASA) regulates television in South Africa and has shown little interest in regulating Netflix. It does not pay taxes. In 2018, ICASA stated that Netflix is not obligated to abide by any local content quotas or requirements. ICASA’s tax focus remains on local subscription TV services such as DStv (direct satellite TV). The American streamers do not have to comply with the post-Apartheid laws such as quotas. For example, the Black Economic Empowerment program which works like affirmative action, gives economic advantages to Black employees and businesses such as requiring 65% local content for its public broadcaster and 45% local content for its commercial broadcast services. As far as the commercial and public television industries goes: they are growing too, but not at a pace to supply 80% local content on TV. Netflix applied for registration with the Film and Publication Board (state licensing bureau and censorship board rating films and programs) in 2016, but petitioned to be exempt from classification requirements which governs age appropriateness and possible socially unacceptable content. According to one television executive, Netflix is difficult to regulate in South Africa because it is from another country and “does not generate advertising, so it does not require payments to be made in South Africa.”

MultiChoice, the Naspers-owned TV media giant, has asked the government to regulate Netflix in order to protect its streaming platform ShowMax. The CEO Calvo Mawela asked ICASA’s online regulations to be not overly rigid, but to model its regulation on the European Union’s directive on audio-visual content, which focuses on entities which have editorial control over content, meaning it doesn’t cover regulating user-generated content. ICASA began hearings in 2018 on the impact of streaming, and found by April 2019 that even though these services are growing, their effects on the South African market is not yet significant. And as a result ICASA stated that “Netflix is not obligated to abide by any local content quotas or requirements.”

Copyright remains a policy priority for pay-TV operators in South Africa. With the development of broadband internet access and an burgeoning growth in illegal content downloads, MultiChoice recently told South Africa’s broadcasting regulator, ICASA, that it “estimates that more than 2 million people view pirated versions of the series and movies available on DStv in South Africa.” Joe Heshu, MultiChoice’s group executive for corporate affairs argues: “that the impact of OTTs [streaming] is muted given the limited access to broadband and/or internet services, the perceived high cost of data and low internet speeds.”

Viewing Habits

Initially Netflix was seen as targeting elite viewers because of the costs involved in subscription rates, Internet connection and owning a television or a laptop. Most Africans experience Netflix via their smartphones. Yet the problem of mobile data affordability remains a major issue for South Africans. Given the limited data (usually 1.5GB per month) included in most smartphone contracts in South Africa, it is quite difficult to “play online games for more than 10 minutes or watch more than half of a single Netflix movie.” Due to the relatively high price of DStv (R809/$57 a month), some subscribers have chosen to cut the cord and move to a purely Internet-based entertainment platform like Netflix. But this decision comes with no access to sports streaming—with soccer as the central African online entertainment interest. South Africa’s average download speed is 18.31Mbps (the fastest in Africa), but behind the global average of 25.08Mbps.

Compared to the high cost of pay-TV, OTT services remain significantly more affordable. As of August 2019, Netflix South Africa users pay $7.99 (R114.69) for Basic, $9.99 (R143.40) for Standard and $11.99 (R172.11) premium in 2018 UHD streaming and support for four screens at once. ShowMax costs $7.22 USD per month.

Content

American TV production is not new in South Africa. The country has been the site of runaway US media production for years because of its English-speaking and non-union labor. For example, Generation Kill (2008), 24 Redemption (2008), The Crown (Season 2, 2017), Black Mirror (two episodes seasons 2013 and 2014) and much of Homeland (2011-2019) were filmed in South Africa. But Netflix producing locally produced and sourced TV has been a welcome change for the country.

Netflix’s first South African original, Queen Sono, was filmed in 2019 and will premiere January 2020. It stars well-known South African actress Pearl Thusi (ABC’s Quantico and BBC/HBO’s The No. 1 Ladies’ Detective Agency). She plays a secret agent fighting crime while dealing with her muddled personal life.

Netflix also acquired the South African drama Shadow about an ex-cop with superpowers. Shadow was released globally as a Netflix Original on March 2019—claimed by Netflix/its producers as the widest release of an African dramatic series to date. The company has also recently acquired teen series Blood & Water in February 2019, to be streamed in 2020. The series is directed by Nosipho Dumisa, the director of the successful 2018 SXSW film Number 37. The TV series is about a local teen who discovers her family’s secret history while traversing the complex world of South African high school. In April 2019, Netflix announced its first original African animated series Mama K’s Team –“a story of four teenage girls living in a futuristic version of Lusaka, Zambia’s capital city. The girls are recruited by an ex-secret agent to save the world.” The series is created by the well-known South Africa based studio, Triggerfish.

Consumer and Press Reaction

In general, the South African media industry sees Netflix’s interest in local production as an opportunity for finance and global exposure. Gareth Crocker, Shadow’s writer and co-director, says that the number of new buyers entering the South African market “is providing some welcome and long-overdue competition for content.” In the case of his show, that meant executive producers could bypass local broadcasters — the most sure-fire way to finance a series in South Africa — in order to retain rights for a show they believed had global potential.

Subscriber Estimates

Estimates suggest Netflix has around 200,000 subscribers in 2019, up from 41440 in 2016. It projected to have 337,980 by 2020.

Local Netflix Office

South African programming and production is run out of Netflix’s Amsterdam office.

Suggested Reading

Borkum, Jared. “Local content quotas on TV are global – they just don’t work everywhere.” The Conversation, June 9, 2016, https://theconversation.com/local-content-quotas-on-tv-are-global-they-just-dont-work-everywhere-60656.

Chutel, Lynsey. “Africa’s dominant TV provider is terrified by the rise of Netflix.” Quartz Africa, May 21, 2018, https://qz.com/africa/1282058/dstv-launches-streaming-service-to-compete-with-netflix-amazon-prime-and-regulations/.

“Estimated number of active streaming subscribers to Netflix in South Africa from 2016 to 2020 (in 1,000s).” Statista 1919, https://www.statista.com/statistics/607684/south-africa-netflix-subscribers/.

Ferreira, Thinus. “Disney+ video streaming service not coming to SA soon.” Channel 24, April 26, 2019, https://www.channel24.co.za/TV/News/disney-video-streaming-service-not-coming-to-sa-soon-20190426-2

“Netflix’s first Arabic original series sparks uproar in Jordan.” Aljazeera News, June 14, 2019. https://variety.com/2019/digital/global/netflix-nosipho-dumisa-blood-water-1203148372/

“South Africa Population.” Worldmeters, September 12, 2019, https://www.worldometers.info/world-population/south-africa-population/

“Telkom launches ‘best mobile data deal’ in South Africa.” Khulumani, May 1, 2019, https://mybroadband.co.za/news/telecoms/301236-telkom-launches-best-mobile-data-deal-in-south-africa.html

Vourlias, Christopher. “‘Shadow,’ ‘The Girl From St. Agnes’ Take South African TV Worldwide,” Variety April 8, 2019, https://variety.com/2019/tv/features/shadow-the-girl-from-st-agnes-south-african-tv-global-miptv-1203176941/

“What South Africans do on YouTube.” Businesstech March 20, 2014, https://businesstech.co.za/news/internet/54599/what-south-africans-do-on-youtube/