After years of dominating the local SVOD market, Netflix is forecast to start losing ground to relative industry newcomers. A new report by Digital TV Research predicts that the streaming giant’s market share on the African continent will drop from 51% in 2021 to as little as 39% in 2026. This paradigm shift is consistent with developments in the rest of world. In 2020, the streaming platform lost an estimated 31% of its market share to competitors like HBO Max and Peacock.
The biggest threat to Netflix’s dominance however is undoubtedly Disney’s Disney+ offering, which has grown exponentially over the past few months. With a whopping 116 million subscribers, the platform has already surpassed its own 5 year growth forecast (within the space of a year) and this despite not yet being available in most countries.
With the announcement that Disney+ is set to be rolled out in a number of emerging markets within the coming months, including South Africa, the streaming service is already well on its way to toppling Amazon Prime as runner up before inevitably gunning for Netflix’s number one spot. Launched in November 2019, Disney+ has been able to cultivate a substantial user base by doubling down on original content and leveraging the hugely popular Star Wars and Marvel franchises to tap into massive pre-existing fandoms.
Despite South Africans not having access to the platform, the streaming service’s flagship shows have consistently trended in the country’s online conversations and search traffic, with the likes of Loki and WandaVision challenging the SOV of locally available titles. This speaks to an already tangible demand for the platform’s content within the local market.
South Africa’s SVOD market has been on a strong growth trajectory following the Covid 19 pandemic, which saw thousands of homebound South Africans signing up to streaming services for the first time. This increased demand was even noted by First National Bank, who observed a 78% increase in new Showmax subscriptions and a 63% increase in Netflix subscriptions amongst its customers in the height of the pandemic.
The relative affordability and ease of use of SVOD services has seen a lot of South Africans ditch pay TV in favour of Netflix, Showmax, Amazon Prime and the like. With Gen Z now at working age and having more purchasing power, the phenomenon of “cord-cutting” will not only continue going forward but likely reach mainstream adoption within a few years, which will change the topography of the media landscape as we know it.