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Rivals welcome Netflix's debut in SA

Local video-on-demand firms are claiming that they are not threatened after the world's heavyweight internet television network entered South Africa to wrestle for a share of the domestic market.

All the companies that Sowetan spoke to yesterday, instead welcomed US-based video-on-demand firm Netflix, which before its launch on Wednesday had more than 69 million subscribers in 60 countries.

Netflix allows a free trial for a month.

However, its monthly fee of $7.99 (R128) will fluctuate in line with the rand-dollar exchange rate, which yesterday dropped to R16.02 from R15.82 when Netflix was launched on Wednesday.

Video-on-demand firms in SA include MTN SA's VU, Naspers's ShowMax and Times Media Group's Vidi, which each cost R99.

Altech closed its video-on-demand business Node in October, due to increased competition.

Richard Boorman, the spokesman for ShowMax, said it was good to have another major player in the market that will generate additional interest in internet TV.

"This is a new segment in SA and so far one of the major challenges has been helping people understand what subscription video-on-demand is and how it works.

"In all likelihood, the more people are talking about the subject, the more we'll see the potential customer base grow," he said.

Boorman implied that it was most likely that video-on-demand patterns in SA will be aligned to those in other countries, where people often subscribe to more than one service.

"So it's not an either/or situation," he said, adding that one of ShowMax's competitive advantages was having exclusive international content from studios such as HBO, a US premium cable and satellite television network.

MTN SA sales and marketing executive Larry Annetts said: "MTN welcomes competition as it believes that variety and choice bodes well for our customers"

But he declined to divulge the subscriber base for VU.

"Numerous videos have been watched and consumed since the launch of VU, and activity spiked during the festive season.

"We are encouraged and pleased with the activity on this platform," he added.

Multichoice said that as at the end of last September, the average number of monthly rentals on its BoxOffice service was 600000.

"Library movies are just R10 and blockbuster movies are R27," it said.