This is a view shared by local analysts, who believe the arrival of the content streaming service in SA is set to disrupt the traditional local pay-TV market.
The online movie and television series streaming service announced its arrival to the South African market this week for R126 per month, with a free month's trial for use on a single screen.
SA's pay-TV market is dominated by a single, entrenched player, MultiChoice, with its DStv offering. According to Naspers' financial results in March 2015, DStv has 5.4 million subscribers in SA.
Richard Hurst, analyst at Ovum, says although Netflix will certainly shake up the market, the most serious challenge facing the company in SA will be the ability to deliver a consistent quality service with an appropriate depth of content."Apple, with iTunes and devices such as the iPod and iPhone, changed the way we listen to music – fair enough, the MP3 format had a major role as well – but clearly the Internet and now companies such as Netflix will change the way we consume content such as movies and TV series."
At the heart of this issue is that the consumer is being offered a greater degree of choice and at a lower price point, Hurst points out. "Some players in the local pay-TV sector will be able to weather the storm, but clearly those that have been struggling will find it even harder to justify their existence."
He points out that even before Netflix's arrival in SA, the content streaming service had already started winning customers, as some consumers had opted to use VPN tunnelling services to access restricted sites such as Netflix.
"However, now that the company has created an official local presence, we can expect the market to shift, particularly for those local consumers that are looking for the more generic movies and TV series content," Hurst says.
He believes MultiChoice will need to respond and begin harnessing the platforms that it has put in place, such as the Internet connectivity devices, and expand its content on services such as Catch Up and Box Office.
According to BMI-TechKnowledge director, Brian Neilson, the arrival of Netflix "will make a further dent on the traditional pay-TV market, but this will be somewhat mitigated by the fact that many of those who naturally fall into the early adopter segment for it are already using it".
Neilson says with Netflix in the mix, there will be some switching behaviour among South Africans. However, he notes, a recent BMI-TechKnowledge digital lifestyle survey predicts most households that adopt video-on-demand (VOD) will not cancel their pay-TV, electing instead to subscribe to both.
"What we can expect is some migration of DStv Premium subscribers to a cheaper DStv bouquet when they adopt VOD; again, moderating this, we must remember that premium sports content is a big factor that will put the brakes on such migration," says Neilson.
Nonetheless, he points out the true cost of ownership would have to include Internet access, and households that do not have a solid enough Internet service will have to upgrade to really benefit.
"That said, the entry-level Netflix subscription price is affordable, and even the more limited South African content will be highly attractive, driving significant levels of adoption, particularly among those who have been waiting for Netflix to become legitimately available."
Meanwhile, MultiChoice says it is not swayed by the arrival of Netflix. "MultiChoice welcomes competition in the pay-TV and entertainment industry. We believe it is good for consumers as it gives them more options and the ability to compare services."
The company notes DStv and over-the-top services like Netflix offer different approaches to video entertainment. "For sheer breadth of content, live sports, and the latest shows and movies, DStv delivers something no other service can in South Africa."
Marathon viewing, meanwhile, is a developing trend across the globe, with people watching entire seasons of TV shows back-to-back, says MultiChoice. Services like ShowMax and Netflix cater to this, by making the full history of hundreds of series available in one place, it adds.
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