TBI Tech & Analysis: Why cost & immobility might hamper Disney+ in South Africa

Kizazi Moto

Disney+ rolled into South Africa last month but the combination of a high price and lack of a mobile-only option could cost the Mouse House, says Omdia’s research analyst Kane McKenna.

The Walt Disney Company has followed up on promises made in August 2021 and launched Disney+ into South Africa. The move took place on 18 May, opening up a market of over 15 million households to Disney, with greenlights to date including animations Kizazi Moto: Generation Of Fire and musical comedy Kiff.

But there are challenges to be overcome and lessons to be learned.

Adversaries & advantages

Encountering rivals old and new in its first foray into sub-Saharan Africa, Disney will have to overcome the pull of the two continental giants Netflix and Showmax. Disney will of course be familiar with Netflix, having had to compete with it from Disney+’s birth in 2019, although this familiarity will not necessarily make the task easier, however.

Utilising its vast content library and regular cadence of updated content both original and licensed has allowed Netflix to amass 46.3% of the market in South Africa as of end-2021 and it has been consistently on the rise since it launched there in 2016.

Showmax, from African pay-TV juggernaut MultiChoice, will also prove a worthy challenger, and Disney will have to use its own high profile content library to compete with Showmax’s excellent slate of African originals and global sport coverage.

At the end of 2021 Showmax held 34.7% of the market and has excellent partnership deals with telecom operators in the region providing both carrier billing and promotional pricing opportunities for the public.

Price & penetration

Despite these challenges, Disney is likely to be fast out the blocks due to a pre-launch promotional pricing offer of R950 ($59) for the year. Pricing beyond that stands at R119 ($7.42) monthly or R1190 (annually.

The monthly pricing is comparable to Netflix but without the option of a cheaper, mobile only option that both Netflix and Showmax carry. It remains to be seen how much of an issue this will be, but with mobile internet penetration in the country far higher than broadband, a cheap mobile option is certainly an attractive offer to more price sensitive customers in the country.

Netflix and Showmax have both engaged in partnership deals in South Africa, and Disney is proving to be no different.

Multichoice, owner of the aforementioned Showmax and also DStv, the largest pay-TV operator in the country, has made Disney+ available on their Explora Ultra satellite decoder. The extended reach this gives the service is a huge strategic advantage, although one it shares with both Netflix and Showmax.

With growth rates slowing for the whole industry as a result of saturation in major markets, expansion is vital for the continued success of Disney+. Launching into a total of 42 new markets in 2022, it’s a very exciting time for the service, which promises to keep chipping away at Netflix’s long-established dominance in the years to come.

This excerpt is from an ‘Analyst Opinion’ article that first run on Omdia’s online portal, available here (subs needed).