South Africa: Vodacom video-on-demand plans

Technology & Convergence

Vodacom says it aims to launch a video-on-demand (VOD) service in South Africa in 2015, with its strategy closely aligned to its parent company, Vodafone.

“We get revenues out from the data growth, as well as from the content itself. I think the margins in VOD is not big, but the knock-on effect it can have in data growth is very large, and I think that’s where the opportunity lies for us,” Vodacom CEO, Shameel Joosub told BusinessTech.

Joosub would not be drawn on an exact time frame, but did point to Vodafone subsidiaries in Europe including Ono in Spain, as doing ‘very well’. Vodafone Deutschland last week began offering subscription VOD service, Netflix.

CEO of consultancy and research company, Balancing Act, Russell Southwood noted that “a big” content producer who is in “dialogue” with MTN and Vodacom said that both firms would launch a VoD content play shortly.

He added that “it would not contain enough content to compete with DStv and they would be doing nothing about data prices to help the market”.

“Another person again confirmed that ‘a big mobile operator’ would be launching imminently. It had bought content on minimum guarantees and management was pressuring the team to make use of what they’d bought because of the amount invested,” Southwood said.

MTN SA told BusinessTech in October that it will launch a VOD service this month (November), partnering with Discover Digital, a South African digital entertainment business.

Larry Annetts, chief marketing officer (CMO) said that MTN has piloted the service offline, and “is looking to launch at the end of November”.

Annetts said that the new service would be subscription based and would provide customers with access to “good content”.

He added that the monthly service would also enable customers to download movies, as a transactional video on demand (T-VOD) play.

MTN would structure data bundles to download this content at subsidized prices, the marketing lead said.

Annetts said that MTN would provide pricing details closer to launch.

South Africa has seen the launch of several VOD services in recent months including Altech Node, a subscription “push” service and home automation system, and Vidi, an online VOD service from Times Media Group.

Telkom has expressed its interest to offer VOD by extending an invitation to industry to bid for the provisioning of VOD in February.

Source: Business Tech 17 November 2014