Poor market showing prompts Tiso Blackstar exit from Vidi

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TISO Blackstar is set to exit its video on demand (VOD) business Vidi following poor take-up.

The service, partly owned by Tiso Blackstar, was launched in September last year.

The group said in its recent financial results statement that Vidi had struggled to gain traction in the market. However, management was working hard at "re-engineering the business in light of weak market penetration and the slow pace of meaningful broadband growth in SA".

Tiso Blackstar CEO Andrew Bonamour said recently that Vidi had not been a success and "we will exit over the next 12 months".

A number of VOD services have been launched over the past year, including MTN’s FrontRow, Altech Node, Naspers’s ShowMax as well as ONTAPtv.com, owned by Chinese firm PCCW Global.

The slow VOD take-up also hit Altech Node, which was discontinued by parent company Altron recently.

Global providers Netflix and Apple TV also have a base locally.

South African VOD penetration forecasts range from 692,000 to 917,500 active-user households by 2020, according to research firm BMI-TechKnowledge. The report, released this month, shows awareness of VOD services is relatively low, with 18% of respondents saying they were aware of VOD providers.

Clinton Jacobs, senior research analyst at BMI-T, said VOD was seen by most as an addition to subscription TV rather than a replacement, which also "speaks to what consumers would be willing to pay — much less than if it would be seen as a replacement service ..."

Source: Business Day 15 October 2015