News analysis

Vodacom Video Play
  • Vodacom says it now has a million paying customers on its Video Play service, exclusive to Vodacom customers in South Africa.
  • That represents fast growth, but its numbers also suggest customers are opting for relatively expensive daily and weekly subscriptions, rather than committing for a month at a time.
  • Competitors like Netflix and Showmax target monthly subscriptions – for now.
  • Go to www.BusinessInsider.co.za for more stories.

Vodacom now has a million paying customers on its Video Play service, it told investors on Monday, making it a big player in the market – though with relatively limited commitment from its customers relative to competitors such as Netflix and Showmax.

Vodacom does not split out exact customer or transaction numbers for its various value-added services, including Video Play, but in commentary on its interim results said that "over 1 million customers engaged on our video platform" and, elsewhere, that "more than one million people have made video-on-demand purchases".

That represents growth of some 15% over a period of four months.

Video Play is only available in South Africa. It requires an active Vodacom cellphone number to register, but does not necessarily require spending money. Among its free-to-watch offerings, after registration, is The Bold and the Beautiful as well as SABC shows including Muvhango and Isidingo.

The platform has a rent-on-demand option, which includes blockbuster Hollywood movies, albeit on a delayed release schedule.

Its biggest drawcard, however, is specialist subscriptions for limited bouquets, at R5 per day or R25 per month. These packages cover Nollywood, Bollywood, a Christian stream with gospel music and sermons, and a "Pride" bouquet of LGBTI+ content.

A Premium package, covering the whole spectrum of content, sells for R25 per day, or R99 per month.

A million paying customers represents a significant win for Vodacom, which launched Video Play with comparatively little fanfare in 2018, and has not marketed it particularly aggressively.

It is also a significant number in terms of a strategy the company now describes as "one more service", where it seeks to upsell its mobile phone customers to another revenue-generating service.

But Vodacom's numbers suggest its customers are opting for short-term engagement with Video Play, rather than the month-to-month subscriptions other major streaming services in South Africa push.

Over the last six months its million customers were responsible for "14.8 million daily, weekly and monthly subscriptions", Vodacom said in its results.

That equates to about 2.5 transactions per customer per month. 

For bouquet subscriptions, that suggests Vodacom customers are willing to pay a big premium for not committing to the relationship. On the Premium package, for instance, paying day-to-day equates to R750 per month for full access – compared to R99 per month up front.

Some other streaming service providers have raised the possibility of shorter-term subscriptions, but have not yet pushed hard on any such options, which would increase their transactions costs – while Vodacom can bill cheaply by way of airtime.

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