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It’s been almost a year since Showmax, the Naspers-owned Video on Demand (VOD) service entered the African pay TV space which means there’s now some focus on how much growth it has registered to date.
Showmax recently announced that it had reached over 10 million views since its launch with over 5 million hours of content having been recorded during the same period.
Those numbers seem abstract but the team at Showmax has identified them as a major milestone considering how they have been reached in less than a year. However, the real question will be on how many users it can sign up and maintain.
Subscriber figures haven’t been made available, but in an interview with Techzim, Richard Boorman, the head of communications for Showmax said that so far they had managed to meet their pre-launch subscriber growth numbers.
In the first four months of 2016 Showmax also managed to double the number of its active users, a key indicator considering the slew of pay TV alternatives that viewers can migrate to.
In a market that now has content heavyweights like Netflix these growth indicators are impressive, but they won’t translate to profitability just yet.
In an interview with Bloomberg last year, Naspers CEO, Bob van Dijk, highlighted how Showmax would be unprofitable until 2017 at the earliest, following a $65 million investment into the service.
Analysts have however estimated the break-even point to be in 2021 having reached 800,000 subscribers. To ensure that it beats analysts estimates and achieves its 2017 target Showmax will have to solve some of the puzzles associated with online pay TV in the market.
Broadband access is still a major consideration in Sub-Saharan Africa because of the huge internet costs as well as the absence of connectivity in areas where service providers like Showmax could have captured more users.
Showmax has addressed this so far with features like offline access and user selected bandwidth capping for streaming and downloads.
With internet access in the region largely driven by mobile network operators (MNOs), Showmax also needs to work them to figure out the best way to deliver its content.
On the aspect of potential cooperation with MNOs Boorman says,
We’re definitely pursuing relationships with broadband providers with a view to getting more affordable data packages for consumers.
A combination of these measures could be what Showmax needs to stay on its growth trajectory and gain visibility as a leading entertainment alternative.
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