SA's low Internet penetration, which currently sits at 49%, has not deterred the growing use of video-on-demand (VOD) platforms in the country.
According to a new Nielsen Video-on-Demand Survey, 63% of South Africans watch some kind of VOD programming on an online device and 79% do so at least once a week.
Craig Henry, MD of Nielsen SA, says: "The projected growth of VOD programming services in South Africa has the potential to create opportunities for all players in the media ecosystem. For audiences, advertisers and content providers alike, advantage will be gained with an in-depth and keen understanding of not just how consumer viewing dynamics are changing, but why they are changing."
The Nielsen survey polled more than 30 000 online respondents in 61 countries including SA, and found that rather than replacing paid traditional TV services, South Africans are supplementing traditional viewing habits with online service subscriptions.
"For most South African viewers, it is clear online and traditional services are not mutually exclusive, but complementary...The majority of South African survey respondents (85%) said they have no plans to cancel their existing traditional satellite service in favour of an online-only service," the report reads.
Some 57% of South Africans said they currently pay for a satellite provider, 11% a cable provider and 10% an online service provider, according to the survey.
Mike Wronski, director at Digital Flow, says although VOD has become increasingly popular, the survey does not reflect the behaviour of all South Africans.
"The poll surveyed online respondents only, and used a fairly small sample frame that may not be statistically accurate for South Africa, skewing the insights further," he states.
Market prospects
The past few years have seen the proliferation of VOD platforms in South Africa.
Last year, Naspers launched streaming service ShowMax, and this year international VOD service, Netflix, launched in 130 countries worldwide - including South Africa.
This year also saw the arrival of Future TV, which offers access to 34 international streaming providers, via TV decoder.
According to the Nielsen survey, where VOD takes the field is in its convenience.
Some 87% of South African viewers said watching VOD programming on their TV, computer, tablet, mobile phone or other online device allows them to watch content at a time that is convenient to them, notes the survey.
VOD has changed the way video content is consumed, putting the control right into consumers' hands, says Wronski. "This changes not only behaviour, but the media landscape in general and the business models associated with it. Content will become shorter, punchier and produced more frequently to satiate the constantly growing consumption needs of the modern consumer."
Richard Hurst, analyst at Ovum, is of the view that users are changing the way they consume media or video.
He explains: "The main driver is that people are wanting to consume what they want, when they want. This, together with the proliferation of devices such as smartphones, will bring a new or fresh dynamic to the market which will drive further growth.
"I don't think it's a far off scenario to consider that people will begin to watch TV series, movies or video clips on mobile devices as they commute to and from work," says Hurst.
According to statistics portal Statista, faster Internet speeds globally are expected to increase VOD subscribers to 200 million by 2020, from around 83 million last year.
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