Netflix, the world’s leading paid video streaming service, is facing increased competition in Africa with Showmax now surpassing it to become the continent’s market leader, according to Omdia Research.
While Netflix held a 40% share in the African streaming market in 2021, its dominance has slipped to 35% with Showmax taking the lead at 40%.
This shift reflects the intensifying competition in the region, primarily driven by Amazon Prime and Showmax.
Marc Jury, CEO of Showmax, highlighted the company’s impressive growth, witnessing a 26% year-on-year increase in paid subscribers over the last four years.
Showmax has strategically invested $1 billion in content production and acquisition in Africa during the financial year ending in 2023, focusing on bolstering its local content offerings.
Despite entering Africa in 2016 and initially racing to several hundred thousand subscribers, Netflix is facing challenges from local and global competitors.
The streaming giant added 1.2 million subscribers in the past four years, but Showmax’s aggressive local content strategy and regional focus have propelled it to the forefront.
The African streaming market is anticipated to grow by 10.4% annually, with other platforms projected to capture a significant portion of Netflix’s slowing subscriber base.
Factors like high broadband costs, unstable internet, and low incomes have contributed to the slow growth of the streaming market in Africa.
While South Africa remains Netflix’s largest market, accounting for 73.3% of its subscriber base, the streaming giant recognizes the potential for growth in Africa.
Netflix has pursued a dual strategy of licensing local content, such as Nigeria’s “Black Book,” and producing original content like “The Origin: Madam Koi-Koi.”
This approach has incurred a cost of $175 million over six years, with South Africa receiving the majority of the licensing revenue.
Despite challenges like low credit and debit card penetration in many regions hindering subscriber growth, Netflix’s price reduction initiatives in some markets have led to a 6.8% increase in subscribers and a revenue boost exceeding $135 million in 2022.
