After years-long battles to dominate the West, big streaming companies like Netflix and Amazon Prime have set their eyes on the new burgeoning economies of Africa, where local streaming platforms like Showmax are still growing.
Initially, the plan was to capitalise on Hollywood’s massive global audience, spending big on promoting top shows heavily in Africa. Netflix’s Bridgerton, for instance, had an African premiere in South Africa with a guestlist that included African Cinema stars from across the continent.
But in the past few years, the race to win over the African audience has set its eye on a new fuel – local creators.
Netflix has been investing heavily in A-list African stars for both limited series and original films alike, including Blood Sisters and, more recently, Far From Home. Amazon Prime, which started recruiting Nigerian executive producers last year, has entered the scene wholly with big-budget originals like Jade Osiberu’s blockbuster Gangs of Lagos and a fleet of Nigerian documentaries.
Netflix has held the number one spot in the streaming wars for years, with new data from Digital TV Research forecasting that it will have amassed 6,944,000 subscribers by 2028, still maintaining the lead.
Though during its recent Capital Markets Day presentation, MultiChoice Connected Video and Showmax CEO Yolisa Phahle touted its current number-two status from Digital TV Research, another report from the same agency forecasts that by 2028, Showmax will have dropped down to the third spot in the race with 2,216,000 subscribers and Amazon in second place with 3,005,000 subscribers.
As the single indigenously African streamer in the race, Showmax is uniquely positioned to take the most significant market share, capitalising on the cache of its very successful cable businesses DSTV and GOTV. It also has working relationships with veteran creators and possesses institutional knowledge and behavioural pattern from its decade-long reign as the king of entertainment on the continent.
But this could also be its bane. New streamers have come into the market and are drastically altering incentives and reward systems for creators.
Showmax’s tactics and matters arising
Showmax has entered partnerships with some of its show creators and shared revenues from advertising or sponsorship generated from the show. At times the creators begin to see tangible profits from the shows months after they have been streamed or if Showmax gets sponsorships for a new season.
Casts of its hit reality show Real Housewives of Lagos, despite being successful and exclusively to Showmax, later say that they had to cover most of their bills during the filming of the show themselves, including expensive dinners and travel.
In contrast, Netflix creators are paid higher and upfront for original shows or have a minimum guaranteed licensing fee commission between $10,000 to $90,000.
In the past few years, Showmax has been leveraging its long history of being affiliated with the biggest entertainment platform on the continent for decades to court YouTube creators on its platform.
Offair with Gbemi and Toolz, the hit YouTube podcast has been receptive, launching its most recent season exclusively on African Magic and Showmax. But other younger creators who didn’t start their careers when multichoice was the sole platform on the continent are less interested in working without guaranteed pay and only the prospect of what could be juicy future opportunities.
These creators are not starved of an audience. Many already have millions of subscribers on YouTube.
A top Nigerian YouTuber passed on an opportunity to licence his content on YouTube to Showmax after he didn’t see concrete figures on how much he would be paid. They decided to go with the German state-owned international broadcaster Deutsche Welle.
Also, in contrast, Netflix’s Young Rich and Famous, the reality show on uber-wealthy African media professionals, has gotten better and bigger over time, recruiting even bigger stars for its second season. Its cast now includes TuFace Idibia, Diamond Platnumz and Bonang Matheba.
Showmax’s Real Housewives franchise went to Abuja but could not generate as much buzz as the Real Housewives of Lagos.
By 2028, the Digital TV Research forecast says total SVOD (subscription video on demand) subscriptions could have reached 15.57 million paying subscribers on the continent. But that will mean only 7% of TV households pay for at least one subscription.
It underscores the problems that the internet and sluggish technology penetration poses for the streaming industry in Africa writ large. But this will affect Showmax more because, more than its competitors, it needs to make money as soon as possible to keep going.
“We want to be the logical choice for entertainment across the continent going forward. With that in mind, we have done a lot of things like being the first service to launch a mobile-only plan, we also got a sports product that sits on top of all of our general entertainment offerings, and we presented the World Cup in 4k last year,” Showmax COO, Barry Dubovsky said in a recent interview.
Though Dubovsky rightly pointed out that Showmax was the first to roll out its mobile plans, underscoring the company’s first understanding of the market, Netflix has also rolled out its mobile plan, starting at 1,200 naira, just like Showmax.
Bottomline
Showmax has been relying on its licensing deals to win. Its parent MultiChoice has announced a new partnership with Comcast’s NBCUniversal and Sky. It still has its sports deals and has much of HBO’s content, including Succession and House of The Dragon, available.
While cable tv can survive with these licensing deals, the same cannot be said for streaming. This is a path that Netflix, which was launched in 1997, took for years. It wasn’t until it started making original content like House of Cards that it rose to prominence.
Though Showmax has been focusing more on original local content to complement its licensed portfolio, the marketing and production budget is barely enough to make said shows break even.
It remains Big Brother Naija to give it that final push to maintain its spot. But it will take more than Big Brother to keep subscriptions rolling all year long.
For Showmax to win, it must go all in on original content and pay creators competitively. The goal will be to be a kind of HBO for Africa, making quirky content. Currently, that seems to be Netflix.
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