Last Wednesday (6th of January, 2016), Netflix, the popular Internet video streaming network took the biggest decision in its 19 years of existence. The company with its 40 million (over 60 million worldwide) active subscribers in the United States, opened its video streaming service to the entire world (at least 190 countries with multilingual supports for major international languages).

Nigeria was not an exception. The coming of Netflix trended for three days in a roll on Twitter in an atmosphere of euphoria and mystified deductions. As an expression of our expertise and consistent thought leadership, we identified the implications of Netflix in the Nigerian media scene.

Sleepless Nights at DSTV 

With over 21 years of commanding the largest market share in the payTV category (in Nigeria and across Africa), DSTV has enjoyed the market with little or no serious competitor. Like any thriving payTV company, its leverage was its edge to buy mostly exclusive contents beyond of the scale of its rivals. The coming of Netflix will disrupt this business model. First is its premium customers. It was projected that DSTV’s growth of premium customers would gradually plummet as premium customers with better access to data services would be early adopters of Netflix’s rich library of contents.

Moreover, its Box Office is overpriced with huge barrier to entry. Its current model of as a standalone product for premium customers will no longer be feasible. If DSTV’s Box Office must compete with Netflix, it has to be freely accessible to premium customers with no rental fee. However, in the coming months, if Netflix gets serious traction, DSTV might be forced to review downward its premium subscription rates and its Box Office need to be rejigged with more contents. Netflix currently, has over 15,000 titles (approximated at 170TB or large enough to stream one unique title after another for roughly 6 and a half years)diversified across series, TV shows, original films plus other exotic contents and by all standards, Box Office is no match for Netflix. How DSTV reacts to this trend will have a serious impact on the company and its over 10 million Nigerian subscribers.

The End of IrokoTV as We Know it? 

After six years of providing video streaming services for Nigerians, Africans and diaspora audience, IrokoTV has not being able to break even. With a bullish corporate leadership that took the company ‘global’, IrokoTV’s plan of becoming Nigeria’s Netflix did not come to true. Analysts have pinpointed dossiers of management flip flops and wrong positioning as its bane.

Moreover, Netflix will eclipse IrokoTV not for its management stuttering, but its lack of rich, exclusive contents and global strengths. Also, IrokoTV’s business and customer acquisition model would not allow it match Netflix’s rock bottom subscription rates aimed at compensating heavy data usage as a result of the need to stream. We would see IrokoTV fighting for its existence in the coming months.

Telcos: Armageddon of Data 

In their bid to stabilize their falling revenues, telcos are going to be locking horns to offer the best Netflix streaming bundles ahead of competition. Because this is a race to the bottom, the coming of Netflix is however, a good news to telco customers who have been whining over expensive data rates and poor service quality. As predicted, We would see data subscription rates falling to a level that benefits customers in the short to medium term.

Zero Advertising: Brands and Agencies’ Achilles Heels? 

One of the outstanding proposition of Netflix to its customers is that all contents are consumed with no advertising and intrusive spots. However, does this portend brands and their owners cannot benefit from a premium audience base provided by Netflix?

Smart brand managers and their agencies have a lot of strategizing to do. If the role of media agencies is to connect brands with targets anywhere and anyhow, Netflix everywhere is a positive challenge for agencies worth their salt. Other video streaming platforms would enter our market. TV as we know it is dead. The broadcast model where everyone watches the same thing, at the same time and on the same device has given way for an on-demand, portable and scalable model.

Customers are taking control of their content preferences. These tectonic shift make one humourous prediction appropriate. ‘One day, many Nigerians will not watch advertising.

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Olayinka Bolaji

Project / Digital Manager at Ahmsta Technologies
Olayinka Bolaji is a Professional Content Writer, SEO Expert, Web Designer, Online Marketer & Visionary Entrepreneur, Specializing on Content Writing, Web Development, Online Marketing ,PPC , SEO , Social Media, You can follow my updates on Google+, Twitter or add me on Facebook!
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