Progress Of Converged Platforms: Is It Inclusive?

Progress Of Converged Platforms: Is It Inclusive?

Progress is what we all strive for. To be better. But progress can be inclusive (meaning it helps move everyone forward) or it can just be isolated individual progress (one small isolated step that does not advance the collective). Does advanced network and platform integration automatically make it inclusive progress?

With urbanisation rates skyrocketing across South Africa, we see all major consumer businesses focussed on how they can extract as much value as possible from this progress. We see mobile operators, as an example, doing their best to take advantage of this ever-increasing pool of potential clients; and they are getting it right with smart phone penetration projected to reach over 20 million by 2018.

progress of smartphone penetration in South Africa

The thing that I am grappling with is that there is a difference between ‘progress’ and ‘inclusive progress’. I am going to delve into the Showmax / Vodacom partnership to illustrate my quandary.

Vodacom / Showmax Pairing

As of fairly recently; you can use your Vodacom account (prepaid or contract) to subscribe to Showmax. This makes absolute sense for both organisations.

From a Showmax point of view; they allow users to get access to their content from literally anywhere they find themselves. They are not confined to a tv set in their living room. This is certainly inclusive progress.

From a Vodacom point of view; they are providing an OTTOver The Top service which their subscribers will consume on their network thus increasing their data revenues. This just feels like progress to me.

While we are talking OTT; let’s also cast our minds back a few months to when almost every cellphone network was crying foul about the OTT providers stealing their lunch.

Positive Inclusive Progress

Reaching the Unbanked

South Africa; like the rest of the continent has a huge problem in that a large contingent of the population is unbanked. The FinScope Survey of 2016 shows that 77% of all adults have a bank account. However, if the SASSA card holders are excluded only 58% of adults are banked.

That means that we are looking at close to 25 000 000 (that’s 25 million) people in our country not having a bank account.

The ability for those millions of people to get access to quality digital Video On Demand is truly inclusive. Typically they would not be able to get access as the subscription service would need a bank account from which to debit their monthly subscription fee.

Subscription Fees

Speaking of subscription fees; the highly competitive Showmax access fee seems negligible when compared to the Big Brother in the Naspers stable: DStv.

The Vodacom and Showmax pairing is incredibly inclusive as the service is provisioned on a month-to-month basis with no contracts. In short: If you don’t pay; you don’t get access.

No Contracts

While we are highlighting the fact that there are no contracts required; it is again incredibly inclusive that this offer is available to those users who are on a prepaid plan.

On the surface; there doesn’t look like there is a lot wrong with this model. Both organisations are being inclusively progressive by opening up content to a wide audience who would not typically be able to get access to it; either because of being unbanked or because the costs are too prohibitive.

Just Progress

Here is where things unravel a little about how inclusive this offering really is.

Access Fee vs Data Usage

There is undeniably no such thing as a free lunch. The access fee that you need to pay to get access to streaming content is literally just that; an access fee. Cover charge. Tickets to the game. It does not cover the data usage of anything that you stream or download. And for a short while; inclusive progress is halted here.

Let’s do some number checking. Showmax have given us access to a data usage estimator on their website. Now assuming I have capped my bandwidth setting and am a low volume consumer; Showmax tells me I am going to need 1.5Gb of data a week or 6.3Gb a month.

showmax bandwidth usage

To those familiar with streaming and data usage; 6Gb a month is certainly on the low side. It barely scratches the surface for power users who are either highly devoted online gamers or heavy consumers of streamed content.

Data Costs

South Africa has one of the highest mobile data costs in the world at the moment. This has been debated to death and has now reached Icasa where they have ruled that mobile operators are not allowed to expire a users data; but rather have to allow it to carry over!

However, the cost is still high and prohibitive for many. Late in 2016 mybroadband put together an article showing the costs of mobile data across South Africa’s mobile operators. It is not a pretty picture.

South African Mobile Data Prices Compared

Putting the above points together; that means that – assuming I don’t have access to WiFi; I need to buy 6Gb of data a  month just to sustain my Showmax VOD addiction. That works out to roughly R 340 a month. That’s extra. That’s over and above the rest of my cellphone bill and my access fee which just gives me permission to get access to the video catalogue.

The Average South African

My quandary with this service offering and its progressive vs inclusive progressive positioning is; who is it for?!

Looking at the Inclusive Progress heading; I am drawn into thinking that this is for the disenfranchised who typically are not able to get access to services such as this. It is breaking down barriers to entry at every turn and in some small way, uplifting a population.

On the other hand; there are some rather large data costs which are prohibiting usage.

The average working South African, according to data on the Trading Economies website, is earning around R 18 000 a month. Which is fantastic if we are in fact looking at this product being offered to the average South African.

Is This For The Average South African

A sad indictment on the state of our country at the moment is the fact that nearly 28% of our population formally unemployed which means that the R 18 000 is more an average household income than a personal income.

In an article on Africa Business Communities; Vodacom is cited as saying:

“the service is optimised for lower data consumption on smartphones and tablets, and is billed directly to a Vodacom account with no need for a credit card. Credit card payment is seen as a major hurdle to uptake of SVODSubscription Video On Demand services in South Africa, where much of the target market does not have access to credit cards.”

By that quote alone, we can surmise that their intention is to reach the disenfranchised masses – those who are unbanked; those who are below the bread line and those who do not have the disposable income to afford the high data charges that come with a subscription service such as this.

And just to be sure we are not making this too one-sided, this Showmax quote comes from a Screen Africa post:

“Internet TV services should be accessible to everyone, not just the lucky few who have credit cards. By partnering with Vodacom, we’ve made it simple to charge both ShowMax Select and ShowMax Premium directly to your Vodacom account, no credit card needed.”

What To Do

What would be fantastic to see is :

  1. How many Showmax subscribers are taking advantage of being able to pay via their Vodacom account.
  2. Has this made a large difference in the subscriber numbers for Showmax
  3. What is the average monthly data usage of Showmax users

Ultimately, both organisations are perfectly positioned to make a difference. The chance to drive down data prices is here and now. This will make the convergence of services and lowered barriers to entry have a greater meaning to the South African population than merely access to SVOD content.

The chance to make this greater than just entertainment is immense. The opportunity here is to provide content that has real benefit at a radically reduced data rate to improve lives.

The bulk of our country is on or below the bread line; meaning that our “average” is certainly not one that can afford simple luxuries like SVOD.

The platform, the reach and the opportunity are all there; but are we just looking for progress or are we striving for inclusive progress?

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