Tuesday , January 26 2021

SA wants to impose a 30% local content quota on carriers like Netflix – here’s a bad idea



  • The South African Department of Communications and Digital Technology wants a local content quota for flow services.
  • Colin Marshall, Director General of Broadcasting Policy, said, “Everything that is shown to South Africans by their directory must contain 30% South African content.”
  • This comes after they proposed changing the rules to expand the definition of a TV license. It may add license fees to SABC for streaming services and paid-TV broadcasters.

The South African government is developing a controversial new plan to force Netflix, Showmax, Amazon Prime Video and other local and international video streaming services to bring at least 30% of their local content into the country in the future.

One-third of their content for streamers should be a local South African series, and going to the movies will be a nuisance to consumers. In order to comply with these flows, South Africa decides to reduce the overall ring fall instead of increasing it. Be consistent.

South Africa’s Department of Communications and Digital Technology does not just want to impose content for streaming services. As part of its plan, it will now need to change existing laws to force services such as multitasking (DSTV), Star Times (StarSat) as well as subscription video demand (SVOD) services such as Netflix SA, Shomax, Apple TV +, and Amazon Prime. Videos and others will be added to consumer bills from these private companies to collect SABC TV license fees, as SABC is unable to collect the proper license fees.

Read more | SABC requires DStv, Netflix viewers and mobile phone users to pay a TV license fee

Colin Marshille, Chief Director of Broadcasting Policy, Department of Communications and Digital Technology, commented on the plan to impose a 30% local content directory quota on carriers: “This video will show South Africans, according to their catalog, when subscription services arrive and become operational. After all, 30% of that directory should contain South African content.

The draft law also proposes to create a government “team” that could badly document and block subscribers’ payments for international streaming services such as Netflix and Amazon Prime Video from South African banks if they do not comply with Streammers regulations.

However, forcing 30% local approval of video streaming services will have unintended consequences for the South African consumer, as it becomes clear only when you know how these streams work and how they make money.

Problems with local content quotas for video streaming services are threefold:

1. Decreasing catalogs instead of upgrades is bad for consumers

First, video carriers are more likely not to “upgrade” their content directories in order to add local South African content to the 30% local target – they will be reduced to marginal management.

South Africa does not produce enough and does not have enough local content for a streaming service like Netflix to add if needed. For every two new shows that Netflix adds, you will have to find one local series from South Africa to add.

It is located near the large back directory of local South African content. A carrier like Netflix may have access to this content volume but will suddenly have to find and retrieve it.

A low-quality carrier like Netflix adds new (international) content per month to the screenplay series, much less than what a local South African broadcaster, such as SABC, produces at the same time.

If 30% of Netflix, Shomax or Amazon Prime video were forced to carry local South African content, they would probably add more local content to some extent, but to work with formulas they would inevitably add so little local content instead of reducing their overall content do.

The entire Netflix South African content directory is already smaller than other countries, such as the United States, for example, due to licensing rights and existing licensing restrictions on land. For example, if Netflix SA has 1000 titles and needs to carry 30% local content, it is not going to switch and add or add 333 local titles. It’s likely to reduce the total number of 1000s available to 300, so only 100 local shows are needed to get the percentage.

That means less choice for the consumer.

International carriers such as Netflix do not purchase or commission content for a specific territory, but use the content of a specific country for its overall global service. It would be strange to force Netflix to buy content only for South Africa – the truth is that Netflix does not. It will further limit what it provides in South Africa and is not good for consumers.

2. Paying to carry the weight of dead video content

Second, private companies such as Netflix, Showmax and Amazon Prime Video are in the video content business for profit and profit.

Acquisition of licensing content for local library content as well as expensive local production of local South African content. All video streaming services use customer data and the algorithm constantly analyzes the data to see what the content resonates with. Content that does not attract visitors will be selected, removed or canceled.

Multichoice, Netflix or Amazon will spend hundreds of millions of dollars getting bored, or lazy, just like you would watch a video while the YouTube algorithm carefully watches you and promotes the video based on how many times you watch the video. And appealing local content that cannot be viewed simply because it is “local”.

Private video companies that are not in the charity business want to get, keep and make money from users by investing their time and attention. In making this entertainment money, customer relationship experience is paramount.

These companies are not going to dilute their directory or experience with local South African content that their users are not interested in, or make it more difficult for the customer to find content because they are forced to go through local content that they do not provide. No need to look at the beginning but it costs a lot of money to carry.

3. There is not enough local content to share

Third, it is not as simple as adding local content. Library content must be acquired, or more specifically, licensed to carry and display it for a period of time.

This may or may not be exceptional, and services will usually pay a little more for uniqueness. Why do you pay for the offer? game of Thrones If your prospective client decides to approach your competitor then take that hit of getting a title from your operating expenses budget. game of Thrones Also available?

Netflix SA has acquired the South African drama series hard copy From quiz pictures. It does not make sense to pay Netflix only for a certain period of time to get the show hard copy Also available simultaneously at Showmax. It’s a waste of money.

Now imagine, each of these streaming services is trying to find enough shows to get a 30% quota. Not enough. Not going to add Showmax or Amazon Prime videos hard copy As soon as Netflix’s license expires, the potential benefits of exposure to that window for a specific topic will be even less.


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