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Nairobi Business Monthly
Home»Technology»Why pay TV incumbents cannot afford to be complacent
Technology

Why pay TV incumbents cannot afford to be complacent

NBM CORRESPONDENTBy NBM CORRESPONDENT6th June 2018Updated:23rd September 2019No Comments2 Mins Read
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Around 97% of Kenyan adults with Internet access are using some form of online video service, with nearly two-thirds paying to view digital online content. That’s according to GfK’s  international ViewScape survey, which this year covered Africa (South Africa, Kenya and Nigeria) for the first time.

The study—which surveyed 1,250 people representative of Kenyan adults with Internet access—shows that 98% of the country’s online adults continue to watch linear broadcast television. One in four download pirated content from the Internet and 94% watch some digital video on YouTube.

Kenyans spend around six hours and 37 minutes a day consuming video content, with more than half that time (52%) spent watching free video. DVD/Blu-Ray still accounts for a larger chunk (10%) of that time than subscription video on demand (SVOD) services like ViuSasa, Showmax and Netflix (8%). SVOD users aged 16 to 24 years are the heaviest watchers, spending nearly seven hours and 41 minutes a day consuming video.

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“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,” says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK.

The study finds that the landscape of SVOD is becoming increasingly competitive, however, only 6% of SVOD subscribers indicated that they got SVOD to replace their pay television subscription. In addition, only 21% of respondents have subscriptions to multiple SVOD providers, suggesting this is still an emerging market. Online adults continue to include physical disks in their daily viewing, due to the high costs of prepaid connectivity in a cost-sensitive market.

“The majority of SVOD users continue to subscribe to pay TV subscriptions as well, so we are not yet seeing SVOD services take market share from the incumbents,” says Josiah Kimanzi, consultant at GfK East & West Africa.

Among most demographics, he says, “Usage of paid online content is incremental to consumption of linear television. That said, pay TV incumbents cannot afford to be complacent. Customer satisfaction with pay TV brands is low, compared with free online and SVOD services. Pay TV brands face a growing threat of disruption as fibre penetration increases and mobile data costs fall.”    

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