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Booming Video Streaming Platforms And The Changing Competitive Landscape In Nigeria

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Several reports have revealed that Nigeria is one of the world’s fastest-growing entertainment and media markets with so much potential. From music to the movie industry, the country’s flag is raised high on the international scene with international artistes and investors closing mouth-watering deals and blockbuster Nollywood movies making waves.

Technology is fuelling the growth of the industry with smartphones and data penetration recording a remarkable growth on the continent. This growth and penetration has put wind in the wings of online video streaming which is now the rave of the moment – giving a fillip to Marshall McLuhan’s insight many years ago, that, someday technology will, beyond the ‘extension of man’, bring the world to his doorstep, in fact, to his palm. Earlier, the Canadian philosopher and communication scholar had predicted that technology would make the world a global village – this has already unraveled in our own very generation.

Of course, online streaming will require a vehicle for ‘articulation,’ hence the rise of video streaming brands which are home to top Hollywood, Bollywood, and Nollywood movies. Today, people watch television or listen to podcast on internet-connected devices more than ever.

Globally, the video streaming market size was valued at USD 59.14 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 21.3% from 2022 to 2030. According to a report by online video optimisation and analytics firm, Conviva, in its State of Online Streaming Q3 2021 report, streaming services in South Africa, Nigeria, Kenya, Egypt, and other parts of Africa, ranked highest at 273 percent ahead of other regions of the world.

Similarly, according to Statista, the revenue in the Video Streaming (SVoD) segment in Nigeria is projected to reach US$468.10m in 2022. Meanwhile, revenue is expected to show an annual growth rate (CAGR 2022-2027) of 14.11%, resulting in a projected market volume of US$905.70m by 2027.

However, the speed with which technology is changing our lifestyles, including what we watch, and how we watch and experience entertainment, is enthralling. One would think it has always been like this. With every change in our lifestyle, occasioned by technological transformation, we sit on a pedestal that is relatively easy to embrace and adapt as an evolving way of life.

Video streaming has not always been the way it is. “When you consider how routinely we access content like App on YouTube or Netflix, it’s hard to believe that not long ago it was virtually impossible to view or transmit video of any kind over the internet. There just wasn’t the bandwidth or the speed available in the early days to make it feasible,” says Abdul Rahman, Forbes Technology Council member.

This is made possible by advances in technology which now makes streaming services allow users to directly transmit media anywhere, at any time. It is noted that the development of new technologies such as artificial intelligence, AI, 5G, Cloud, and others, allow streamer providers to deliver optimal streaming services to their users. For instance, AI is allowing content producers to make quality content like never before. Moreover, cloud-based video streaming solutions are increasing the reach of video content, which is further influencing market growth.

Trajectory

The outbreak of the coronavirus became one of the major impetuses in the demand for online video streaming as more people stayed out of home, and also had the need for more entertainment experiences.

Forbes reports that internet streaming and usage figures show that, as the pandemic placed a quarter of the world’s population under lockdown, millions of people went online for entertainment and more. “Total internet hits have surged by between 50% and 70%, according to preliminary statistics. Streaming has also jumped by at least 12%, estimates show.”

Also, a a report published by OMedia last year indicates that increased consumption of digital content from mobile apps to TV and gaming also took place in China and Italy, with a possible increase in online traffic of as much as 50% in the two countries. Meanwhile, Nigerian companies appear to have shied away from this boom in the industry. But innovative brands mustered the muscle to boldly enter the market with superb consumer offerings and a superlative market entry strategy.

However, streaming tops Cable TV viewership in many markets globally according to several studies this year. It is supported by a wide range of devices, including computers, laptops, smartphones, tablets, smart TV, and gaming consoles which appeals to the ever-increasing movie lovers and subscribers. On the global scene, Netflix faces constant and growing competition from the likes of YouTube, Hulu, Amazon Prime, Disney +, Apple TV +, and more.

Nigerian Market and Competition

The competition is also playing out in Nigeria with brands such as Amazon Prime, Showmax, Wakaati TV, Accelerate TV, Red TV, UKTVNow, RedBox TV, Nigeria Live TV, IROKOTV, YouTube Premium, Arise Play, Avo TV and others batting Netflix for the market share, a brand that has approximately 220 million paying subscribers worldwide.

With a rising number of competitors, one thing analysts pinpoint as an attraction to those brands is the ever-increasing number of movie lovers and subscribers in Nigeria and the African continent.

Noteworthy, competition tagged “the streaming wars” has been more intense since the outbreak of COVID which many analysts term the “consequential effect of the pandemic”.

For example, Amazon Prime Video launched a local service in Nigeria with cheaper fees. Meanwhile, Netflix offered basic, standard, and premium paid services.

All making room for monthly and annual payments, not limiting the videos available for consumers.

Excitingly, since the launch of Amazon Prime in 2016, this is the first time the platform’s services will be relatable to the Nigerian locality through local language interfaces, subtitling and original contents, despite its operation in over 200 countries globally.

Customers in Nigeria can now stream over 20,000 original TV shows and movies, which comes at an affordable price per month after a seven-day trial. Also, it makes it easy for consumers to subscribe using local currency (Naira), and no VPN is required to stream content on the service.

Netflix on its part offers basic, standard, and premium paid services. Last year, it introduced a mobile plan across 43 countries in sub-Saharan Africa. It also had about a 60% reduction in the price of its offerings from basic, to standard and premium.

Nigerian subscribers get to experience the extensive local category on Showmax, stream a wide range of Nigerian series and movies, including Big Brother Naija 5 which is live-streamed on Showmax and catch all the weekly evictions, Head of House challenges, and extra view of unseen footage.

Interesting too is that subscribers can stream standard Showmax and Showmax Pro concurrently on two devices, while Showmax Mobile and Showmax Pro Mobile can be viewed on only one device at a time. Also, of interest is the fact that Showmax offers consumers a free 14-day trial! However, Showmax Pro does not have a free trial.

The Accelerate Plus app aims to offer subscribers the opportunity to watch content that can only be found on its platform.

Working With Content Creators

In Nigeria, Amazon Prime Video commenced collaborations with Nigerian content creators and filmmakers before finalising its move to enable their production of original and licensed content. Its two Local Amazon Originals for Nigerian customers, Gangs of Lagos and LOL: Last One Laughing Naija are examples.

Showmax has been using its platform to tell African stories and promote local talent across the continent with collaborations with stakeholders.

As part of the company’s ongoing commitment to creating sustainable relationships with African storytellers, Netflix announced a multi-project partnership with acclaimed South African filmmaker Mandlakayise Walter Dube. Under the partnership, Mandla – who directed Netflix’s first commissioned African film ‘Silverton Siege’ will direct a variety of Netflix-owned projects which will be shared in due course. This partnership joins other multi-title agreements between the company and African creatives including Mo Abudu and Kunle Afolayan.

In another vein, Netflix invited film and television students in West and Central Africa for its Creative Equity Scholarship Fund (CESF). The selected applicants will have the opportunity to study at institutions in Nigeria, Ghana, Benin, and Gabon, among others.

According to Femi Adelusi, Media Independent Practitioners Association of Nigeria (MIPAN) President said “Content is the kingmaker, the option and process that consumer needs are rising every day and this is what audience measurement is to track, so it is not just local, it is anything that consumer is watching that it’s reporting, whether is Showmax, Amazon Prime, Iroko TV, YouTube, Disney Channel, or Netflix. The options are just endless and that is why urgent measurement is important, so we can see where the eyeballs are going.”

Game on or Game Over?

In light of the striving competition, video streaming platforms need to continue to be innovative with customer-centric offers and innovative. Also, they should continue to engage the stakeholders more from content creators to movie makers and others in the interest of creating engaging content and growing the ecosystem.

Promoting Nigerian content including telling the African stories and giving more opportunities to stakeholders should be their watchword.

Competition is necessary for the growth of the industry and should be done in an ethical matter while the government, regulators, and others should come up with friendly policies that will make the industry thrive instead of over-regulating which will frustrate innovators out of the country.

Telecom operators should also reduce data costs and make it affordable as this will also accelerate the growth of the sector even though have a streaming plan.

In line with the above, Adelusi said, “So I do believe that as long as data becomes cheaper, the streaming platforms will continue to increase because then you are not only competing with the Nigeria partner, you are also competing with the digital streaming platforms around the world as long as people are willing to pay the access charges, and some of these are medium cost in terms of a monthly subscription.

“So, it’s a lot of competition, but I think the consumer is in because it then has more choice while for the advertisers and advertising agency, it’s a challenge to us because we have to now track and understand the media beyond our already arranged fragmented media locally and we need to then begin to understand the motivation and the content that is not even situated in Nigeria.”

In another vein, Statista in one of its Analyst opinions said that “While the growth of Video Streaming services like Netflix and Amazon Prime Video is not over, we assume that the adoption of such services will soon reach its peak, especially in developed countries. New offers such as Apple TV+ might attract new customers, but the general lack of willingness to pay in huge potential markets like China will cap the growth in this segment on a global scale.”

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