If adding a “Skip Intro” button was controversial, it’s hard to imagine the firestorm that Netflix’s latest idea could ignite.
According to a new report, the streaming giant is making a brave new foray into interactive television—and will test the potential format on an upcoming episode of Black Mirror, which is expected to debut a new season in December.
So far, such experiments have been limited to Netflix programming aimed at its youngest viewers. Now it appears the streamer is ready to use the trick more broadly, in a bid to attract new users. But what is this new tactic, really: a fascinating new format or a cheap gimmick?
Per Bloomberg, sources familiar with the initiative say that Netflix is developing multiple specials—television and film—that put viewers in control of their narratives.
One such project is an episode of Black Mirror, Charlie Brooker’s dystopian sci-fi series that’s made a name for itself examining the dark side of technology and its influence on humanity. Per Bloomberg, several of Netflix’s children’s programs, such as Puss in Book, already feature this choose-your-own-adventure style, allowing viewers to decide a show’s narrative course at various junctures, then go back and choose differently if they wish to explore different outcomes.
The format seems, essentially, like a blend of television and video games—though Bloomberg makes clear that Netflix has no intention to venture more overtly into video-game production.
Whether this new initiative is a boon or a blight on the consumer experience remains to be seen. If executed well, it’ll introduce new sorts of storytelling opportunities, and even more engaging content. If executed poorly, the shtick could feel contrived and unnecessary—and given the continued discussion of the company’s perceived lack of quality control, it’s easy to imagine this criticism being lobbed. Still, to Netflix’s credit, starting with Black Mirror seems like a smart move: Brooker and his team seem, perhaps more than anyone, uniquely qualified to use this technology. They’re also more likely than most to make its employment narratively meaningful. After all, the series has already made a whole, horrific episode about the darker side of video games; why not take that idea to its logical conclusion?
For months, the chief executive of South Africa’s biggest TV company, MultiChoice, has suspected Netflix was messing with him and the rest of the DStv parent company. Calvo Mawela was clearly spooked, yet it seemed laughable that relative newcomer, Netflix South Africa was going after DStv in particular, until it actually turned DStv’s corporate paranoia into a joke.
To market to South Africans fed up with DStv, the streaming service created a character, Man With A Van. Played by prominent local comedian Jason Goliath, he makes a living faking Netflix installations. Man With A Van visits clients houses, with pointless wiring and over-the-top installation, even carrying an empty box with the words Premium HD—a direct dig at DStv’s premium service.
DStv has always suspected that Netflix is coming for it. First, Netflix sent a helicopter over MultiChoice’s Johannesburg headquarters, flying a banner over their heads, Mawela told local press in May. Then, MultiChoice employees started seeing Netflix billboards going up on roads around Johannesburg.
In all of this Netflix has been almost silent, making moves instead of releasing statements. Getting a formal comment out of them has been near impossible, but their actions have illustrated that they were making a real play for the market.
In a recent article in MyBroadband, Mawela stated that Netflix needs to be regulated by ICASA, and should be BBBEE complaint.
There are no official figures about how many users Netflix already has in South Africa, but in compiling their own 600-page report on their new competitor, MultiChoice estimates Netflix has 300 000 to 400 000 compared with 6.6 million MultiChoice homes. MultiChoice is also blaming Netflix for its loss of more than 100,000 satellite television subscribers in the last financial year, and an additional 40,000 in this cycle.
Apart from not requiring installation, at R165 a month for a premium subscription, Netflix has a price advantage over DStv, which costs R900 a month for a premium subscription. Of course, Netflix requires a reliable internet connection, which is still costly in South Africa. For customers fed up with DStv’s high prices and frequent re-runs , Netflix is already winning the battles for hearts and eyes.
The US’s biggest technology stocks – Facebook, Amazon, Netflix and Google, collectively known as the Fangs – have fallen steeply as concerns over a trade war weighed on world indices.
The tech-heavy Nasdaq index fell by more than two per cent to its lowest close since the end of May.
Facebook and Amazon both lost over 2.5 per cent, while Netflix plummeted by more than six per cent. Apple and Alphabet, the parent company of Google, also fell heavily.
Equity indices around the world had earlier slumped, with France’s Cac 40 losing almost two per cent while Germany’s Dax gave up 2.46 per cent as investors feared further damaging trade moves.
American tech stocks have generally been immune to fears over protectionist trade tariffs, with no mention by either the US, China, or the EU of levies or other barriers to be imposed on them.
However, Russ Mould, investment director at trading platform AJ Bell, said the recent success of the Fang stocks – an acronym of the tech giants – in spite of market ructions may have made shares more vulnerable to bigger moves if sentiment shifts.
The Fangs may be “targets for some profit taking” if investors plump for cash amid fears of a broader market setback, he said.
The tech stocks are approaching similar levels of growth hit by the Nasdaq during the dotcom bubble at the turn of the century, which ended in a deep crash of more than 78 per cent, Mould said.
Over the course of 2018 a “Fangs+” index, which includes other large US-listed tech firms, has outpaced the gains of the bubble-era Nasdaq.
Yet the Fangs still face regulatory issues which could severely impact their business models, following the scandal over data misuse by political consultancy Cambridge Analytica, competition concerns, and ongoing tax issues.
“The danger for bulls is that these valuations leave little margin for error should something – anything – go wrong,” Mould added.
As fibre broadband rolls out to South Africa’s townships, people will switch away from satellite TV services to online platforms like Netflix. This is according to a recent article by MyBroadband.
Vumatel plans to connect South Africa’s townships – if the pilot in Alexandra is successful, Vumatel will replicate the model in Diepsloot.
Within the next two years, Vumatel aims to connect 2.5-million homes and 10-million township residents to fibre broadband.
However, DStv research has shown that once someone makes the switch to an online subscription video service, they don’t go back to satellite TV.
MultiChoice South Africa CEO Calvo Mawela told MyBroadband there is no doubt that the future of pay TV is online, which is why they are arguing that satellite and Internet-based pay TV services must fall under the same regulations in South Africa.
A saving grace for DStv in South Africa has been the lacklustre penetration of broadband services.
However, with the launch of Netflix locally in 2016 and the proliferation of fibre infrastructure, DStv’s market share has changed.
“Over 100 000 Premium subscribers left us in the last financial year,” said Mawela. This was largely as a result of the popularity of Netflix, he added.
He said most of their growth is happening at the lower-end of the market through DStv Access packages, where the profit margins are lower than on DStv Premium and DStv Compact.
Now with Vumatel rolling out 100Mbps fibre services to townships at R89 per month, DStv’s lower-tier services will come under pressure.
Mawela said Vumatel rolling out fibre to Alexandra will kill DStv’s satellite TV market share.
According to GfK’s international ViewScape survey, which covers Africa (South Africa, Kenya and Nigeria) for the first time, 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
The study, which surveyed 1 250 people representative of urban South African adults with Internet access, shows that 90% of the country’s online adults today use at least one online video service, and that just over half are paying to view digital online content.
The study reveals that average user spends around seven hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Viewers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television.
The study also shows that people aged 18 to 24 years spend more than eight hours a day watching video content, as they tend to spend more time with free digital video than people above their age.
Benjamin Ballensiefen, managing director for sub-Saharan Africa at GfK, says, “The media industry is experiencing a revolution, as digital platforms transform viewers’ video consumption behaviour.”
“The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption,” adds Ballensiefen.
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services.
Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research and regional business development at GfK Sub Sahara Africa.
Moahloli concludes, “Among most demographics, usage of paid online content is incremental to consumption of linear television. However, there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
Netflix’s first quarterly report for the 2018 financial year shows that after notching its most subscriber additions in Q4 2017 (8.33 million) it barely slowed down.
Over the last three months, it added another 7.4 million subscribers (1.96 million of them in the US), its second-biggest quarter ever and enough to hit 125 million subscribers on the dot. The ongoing flood of new content certainly helps, including stunts like its Super Bowl Sunday release of The Cloverfield Paradox.
Despite the response from critics Netflix still said: “the event showcased how a big branded film can be marketed and delivered to consumers instantaneously across the globe without a wait for the theatrical window.” Meanwhile, the Spanish series Money Heist became its “most-watched non-English series on Netflix ever.”
While confirming that it will spend between $7.5 and $8 billion this year on content, there isn’t much new to announce. Netflix touched on its expanded agreement with Comcast briefly, and while it didn’t reveal bundle prices it said “We believe that the lower churn in these bundles offsets the lower Netflix ASP.”