The Continent Where Netflix Has Real Competition

Netflix dominates rivals Comcast and Warner Bros. Discovery in the U.S. — but it’s a whole different story in Africa.

The streaming stalwart, a dominating SVOD force in huge swaths of the world, has been surpassed in Africa by the continent’s most popular streaming service: Showmax, which launched in South Africa in 2015. As of November 2023, Netflix had 1.8 million subscribers in Africa, according to research firm Omdia, trailing the 2.1 million signed up to Showmax, which has seen its sub base surge 60% just since 2021. 

What has fueled the rise of Showmax in Africa can be traced back to an exclusive licensing deal made in 2020 that gave the streaming service exclusive rights to WBD subsidiary HBO programming in the region, followed by an even bigger coup in March 2023, when Showmax’s parent company, MultiChoice, formed a deal with Comcast to acquire a 30% stake in Showmax through NBCUniversal and Sky. 

The partnership has since proven successful, granting viewers access to international hits from Peacock in addition to a strong preexisting catalog of Max, Sony and Hulu that deliver award-winning shows such as “The White Lotus” and “The Last of Us.” Just last week, Paramount+ was added to the mix, with its own partnership deal to launch a branded hub on Showmax.

Last month, MultiChoice received a buyout offer from Vivendi’s Canal+ Group. The French company originally bought stock in MultiChoice in 2020 and has acquired up to 31% as of February 2023. This newest offer was at a 40% premium equivalent to $1.64 billion, but it was rejected by the media giant.

Instead, MultiChoice plans to pump an additional $89 million into Showmax by March. NBCUniversal has also said it will be contributing $177 million to the platform over the next year. This will serve as fuel for the streaming platform’s ambitious goal to reach 50 million subscribers and $1 billion in revenue over the next five years. 

But the heart of Showmax’s success comes from maintaining a focus on locally produced content. In the past year, MultiChoice spent roughly $1 billion on African film and TV, covering half of its general entertainment budget. In return, Showmax pumped out 20 originals in February alone and is expected to have over 1,300 hours of original content produced by the end of the year — representing a 150% increase in output since 2022.

And the strategy is working, as the majority of the top streamed shows for the platform for 2023 were African produced, including “The Real Housewives of Nairobi” — an extension of the behemoth reality franchise — or the Kenyan drama series “Single Kiasi,” which is about to enter season two.

Just last month, Showmax added rights to the English Premier League. Not only is soccer the most viewed sport in the world, but Africa boasts a particularly rabid fan base. This perfect partnership proves a valuable asset to combat Netflix, which recently announced its own partnership with WWE. 

Since launching in Africa in 2016, Netflix has invested $175 million on content as of 2022. The platform has also struck partnerships with African filmmakers to accurately represent regional stories, a strategy that has not only attracted African subscribers but given creators opportunities to reach viewers outside the continent. 

For instance, “Blood & Water,” a drama series based in Cape Town, reached the top of the charts in the U.S. and was renewed for its fourth season. Nigerian action thriller “The Black Book” has also scored worldwide success, spending three weeks among Netflix’s top 10 English-language titles in the world.

In September, the streamer announced its newest slate at MIP Africa, including the second season of “Savage Beauty” and spy thriller feature “Heart of the Hunter,” set to hit the platform later this year.  

In 2023, Africa reached over 8 million subscribers in the SVOD space, per Digital TV Research, which predicts it will reach 18 million by 2029, while the company also estimates Netflix will make a comeback and surpass Showmax by that time, reaching 7.55 million subs to Showmax’s 4.4 million. 

But while Africa is one of the fastest-growing regions on the planet, Digital TV Research expects its broadband penetration to be relatively low, pegged at just 7.7%.

Still, the growth spurt of 8 million to 18 million it’s anticipated to hit over the next five years makes the continent a pocket worth targeting at a time when other territories are maturing. U.S. SVOD subscription growth plummeted from 21.6% in 2022 to 10.1% in 2023, according to new data out this week from research firm Antenna.

Prime Video entered Africa in 2016 but finished November 2023 with only 300,000 subscribers. The platform has since decided to refocus on European content and drastically reduced funding in Africa. Other players, such as AppleTV+ and Disney+, joined in 2019 and 2022, respectively, though neither has made much of a dent.

Showmax’s success being fleeting may reflect the fact that it had to slash its subscription fee by nearly 50%, a short-term strategy to prioritize attracting more subscribers before inevitably having to raise its price to similar to what Netflix charges. 

The idea of succeeding in the fastest-growing continent is alluring, but the complex African market is costly and difficult to navigate. Inconsistencies surrounding payment and broadband, as well as curating culturally relevant content lead to high entry barriers for new competitors. So for now, it’s a two-horse race between Showmax and Netflix, with Showmax taking the lead, however briefly.