Netflix Video Streaming Arrives in Africa
Netflix, the world’s largest online video streaming service, announced this year that they would soon be bringing their services to nearly every country on the globe – including the entire continent of Africa. With Netflix, African citizens will potentially have greater access to movies, television shows, and other forms of video entertainment. However, current energy and telecommunications barriers present a different reality. While the leader in streaming services has technically expanded to the whole of Africa, very few people actually have access to it. In order to succeed here, Netflix will be forced to amend its “one size fits all” approach and tailor its model to win out over local competitors – most notably, Jason Njoku’s iROKO.
Netflix – and Economic Development
It is well-known that Africa is plagued with economic development issues in addition to government corruption. Unfortunately, this has held back the implementation of modern technology in many areas, including Internet and mobile data services. In places that do have this technology, prices are extremely high with broadband prices currently about twice the average per capita income of Africa. If these issues remain unaddressed, only a very small minority of African citizens will be able to access video streaming via Netflix’s services.
Perhaps one of the biggest setbacks facing Netflix (and all video content providers) in Africa is the energy poverty crisis plaguing the continent. Luckily today, efforts to resolve this problem are gradually coming to a head. On February 9, 2016, American President Barack Obama signed the Electrify Africa Act into law, which calls for the establishment of a multiyear strategy to implement sustainable energy strategies and solutions, including the option of renewable energy such as solar, wind, and hydro power. But there is still a long way to go.
African Competition
Understanding Africa’s unique cultural and economic circumstances is crucial if you wish to see your business succeed there. For Jason Njoku, a UK-born Nigerian entrepreneur, having the home court advantage has allowed his start-up iROKO to penetrate a waiting market. First launched in 2011 as a free streaming website (albeit with heavy advertising) for Nigeria’s immensely popular “Nollywood” movie content, today the company is upping the ante to invest in its own original programs and expansion plan. In Africa, the streaming service trend is still in its most nascent phase, but iROKO bets that the local touch will give it an early and impactful boost.
iRoko understands the needs and values of both local Nigerians –in urban centers like Lagos, Abuja and Port Harcourt, primarily – as well as those in the diaspora. Bringing the Nollywood experience to a mobile app, and allowing viewers to pay for access in weekly or even one-day installments, has helped bring in fresh business as well. In January, the company raised $19 million from Canal+ France SA and Investment AB Kinnevik, and is hoping to be cash-flow positive by third quarter 2016.
Netflix has a long uphill battle to fight before it can expect to dominate the African market. Aside from infrastructure issues and existing competitors with the continent itself, the streaming giant must also contend with other successful services – such as Amazon and Hulu Plus – that have made a slight dent in their world-domination efforts thus far. Even further, back on American turf, the race has tighten up between Netflix and pay-cable giants AT&T and DirecTV, who recently partnered and have announced their decision to offer streaming video services over a wired or wireless Internet connection from any provider and from virtually any device.
Netflix does have some perks unique only to them, including their original films and television shows such as House of Cards, Orange is the New Black, and reboots of older programs that have a large following like Fuller House. However, only time will tell if their services will win the loyalty of local African markets. As a new arrival, Netflix will have to earn its keep – and at the rate iROKO is going, that could be more difficult than initially expected.
