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You disrupted the industry significantly when you introduced the DStv Explora. How did the technology you pioneered there influence ShowMax?
The intention was to bring video on demand to people in whatever way possible. The Explora managed to do that using satellite, with a very big hard drive, then pushing the video into the customer’s home. It looked very similar to an online service, but because we didn’t have enough broadband, it was just the right product for the right moment.
From that I learnt that people’s behaviour changes dramatically once they get video on demand. They start watching TV in a completely different way once you are able to deliver it over the internet, of course. The possibilities are endless because the amount of content you can consume is endless.
One of the trends emerging internationally is the rise of binge viewing. Have you noticed anything similar?
Sure, binge viewing is definitely a worldwide trend. At MultiChoice, we were experimenting with binge viewing more than two years ago. We put an entire TV series up at once and people loved it. That was some of the thinking behind ShowMax – if binge viewing is a trend, then how do we offer the best local and international content they can binge view? Though we don’t use the term ‘binge viewing’ internally – we prefer ‘marathon viewing’.
There’s a big trend in China where people are moving from gaming to streaming video. Do you see something like that happening here?
It’s very interesting. I’ve been to China many times and I went again in late January. What I noticed this time was a dramatic shift towards mobile. Ten years ago, everyone was locked up in internet cafés, some of them with 2 000 to 3 000 people inside. Now there are hardly any cafés, and everyone has phablets and are consuming on mobile.
The other thing is that the Chinese government has invested a lot of money in putting fibreoptic cables into the ground in the major metropols. The consequence is that Wi-Fi proliferates. Most people access the internet through mobile and a small percentage through normal cellphone networks.
That means that most devices are now video-based devices. If you take a company like Youku – one of the biggest video services in China – they’ve got about 600 million users a month, with about 100 million users a day, on average, accessing the site.
Those are phenomenal numbers and I’m sure the others have similar numbers. It just shows you how video delivery on the internet has almost replaced traditional media and it is changing people’s behaviour distinctly. When I saw that, a penny dropped in my head.
A large portion of video-on-demand use is happening on laptops and mobile devices. Are you targeting these nontraditional TV customers?
Yes, absolutely, that’s one of the major segments we are targeting with ShowMax – the non-TV household, people with broadband that’s perfectly adequate for them. But they also want to be entertained. I can say with certainty that once broadband proliferates, this trend will continue. People are going to be happy with broadband and one or two over-the-top video services at a very good price.
What percentage of South African viewers can get ShowMax on broadband without buffering?
Well, the quoted number we keep hearing is that there are 1 million ADSL users in the country. I think more than half of them could stream ShowMax quite comfortably.
Then, of course, there are people who are able to watch when they’re not at home or people who live in fibre neighbourhoods. All the networks, like Neotel and Telkom, are investing heavily in fibre.
As that lights up, people will have access to more broadband. It’s going to be like oxygen – you won’t even notice it’s there.
I think once you get to that point, the precipice, so to speak, will be a major shift in the way people consume. That’s why we launched now.
Do you think ShowMax could threaten the success of an entity like MultiChoice?
We don’t really know what’s going to happen in the future. We’re a separate entity within the Naspers group, which forms part of the video entertainment segment. We’re just focusing on building a really great business with amazing content at a very good price. There’s no hard evidence yet that these types of services are putting pay TV out yet, but they are certainly challenging them. For now, though, one can’t quite say.
One of the biggest successes of Netflix has been the creation of their own series, like Orange Is the New Black. Are there plans in the pipeline to produce content that is unique to ShowMax?
One of our propositions – aside from some unique content like Game of Thrones – is that we are strong on local content. We’ve invested a lot in it through the group, so we want to experiment with some local shows. I believe local is superimportant. We’re going to see over the coming months how some experimental-type shows we’re putting together work out.
Any chance of a sneak preview?
All I can say at this point is that one will be Afrikaans and the other an isiZulu Mzansi-type format.
