Islands in the stream: DStv hopes Portuguese channels will nix Netflix

MultiChoice has launched two television channels, for audiences in Mozambique and Angola, as the DStv operator of takes on competition from international players such as Netflix through the production of local content.

In recent years, MultiChoice has doubled down on local content as a way to maintain its dominant position across Africa in the face of growing competition from deep-pocketed US rivals.

With the likes of Netflix and Amazon Prime offering vast catalogues of international films and television shows, MultiChoice has chosen to use locally produced programming as a way to grab audiences in the countries where it operates. This has resulted in channels such as Mzansi Magic and Zambezi Magic, which aim to air shows from SA, Zambia and Zimbabwe, among other countries. 

This week, MultiChoice expanded its “hyperlocal” offering with the launch of two new TV channels — Maningue Magic and Kwenda Magic — for audiences in Mozambique and Angola, respectively, focused on Portuguese-language programming.

“These channel launches are an exciting milestone for MultiChoice and our hyperlocal strategy,” says Joao Ribeiro, channel head for Kwenda and Maningue Magic.

“MultiChoice’s mission is to showcase Africa’s diverse, rich culture through our continent’s deep storytelling history. To have two new, 24-hour channels in local languages, featuring locally produced content, provides an incredibly powerful platform to do this.”

Local in the limelight

The group’s hyperlocal strategy combines local content acquisition, local production and the development of local content with international production partnerships. An example of the latter is Blood Psalms, a big-budget epic drama that was developed in partnership with France’s Canal+, now one of MultiChoice’s biggest shareholders. 

The group believes it needs to maintain this content lead to defend its place in the market.

Over the past 18 months, MultiChoice has launched several channels including Pearl Magic Prime, Akwaaba Magic and Abol TV in Uganda, Ghana and Ethiopia. The group produced an additional 2,692 hours of local content in 2021, registering 41% year-on-year growth. MultiChoice’s local content library is now approaching 66,000 hours, representing 45% of total general entertainment content spend.

Competing forces

A similar approach by Netflix has brought it much success in recent years. Money Heist, a Spanish language drama series, set viewing records for the platform as global audiences watched it in droves during lockdown, while it has experienced similar success with the recent boom in Korean-language Squid Game.

For MultiChoice, the stakes are now higher as Netflix has started focusing its deep pockets on its own local productions such Blood & Water, Queen Sono and How To Ruin Christmas.

Netflix, which hasn’t previously commented on viewership numbers, country and territory subscriber numbers or production spending and licensing content, revealed in 2021 that it had invested $17bn on original content globally. Consulting firm Accenture believes that 5%-8% of Netflix’s production budget came to Africa, translating to $850m-$1.36bn — almost half of MultiChoice’s market cap.

Streaming in 

According to data from Digital TV Research, the penetration of streaming companies such as Netflix is still just 4% in Africa against 82% in North America, 69% in Western Europe, 34% in Latin America and 37% in Asian emerging markets. In SA, Netflix was estimated to have 350,000 customers in 2020, a fraction of DStv’s 8-million. However, holding on to its lead in the market is not guaranteed for the company, which is valued at about R52bn on the JSE.

While video streaming — Netflix’s speciality — is still small in SA and the rest of Africa, the segment is growing. All of  SA’s major television broadcasters will be offering online viewing options: eMedia is adding a platform called eVOD to its portfolio; MultiChoice owns DStv Now and Showmax; and the SABC has a deal with Telkom to stream its television and radio content.