May 4, 2017 / 2:27 PM / a year ago

South African video streaming firm to compete with Showmax, Netflix

JOHANNESBURG (Reuters) - South Africa’s Discover Digital, hoping to capitalize on the rapid uptake of smartphones and improving telecommunications infrastructure on the continent, is starting a video streaming service to rival Netflix and Showmax, it said on Thursday.

The firm, which used to operate MTN’s (MTNJ.J) streaming service VU before it shut down on May 3, said it will partner with regional telecom companies and businesses.

Its Digital Entertainment on Demand (DEOD) service enters a market where not only Naspers (NPNJn.J), has a foothold, but also global competitor Netflix (NFLX.O) and three other players.

Africa’s most advanced country, where a rapid expansion of fiber optic broadband in more affluent neighborhoods has allowed streaming of movies and TV series, is one of the markets DEOD plans to go live in, including others across Africa, which it did not name.

“As a full-service, video on demand business, we want to use the increased connectivity consumers now have access to, to deliver more entertainment in a number of ways,” Discover Digital Managing Director Stephen Watson said in a statement.

“The opportunity in Africa is to deliver to mobile phones a broad range of digital entertainment – from video and TV to music, magazines and radio.”

Priced from 49 rand ($3.62), to better compete with competitors, DEOD offers global news channels, five world sport channels, series, music videos and movies on-demand.

“We believe everybody deserves to have access to quality, affordable content and we will continue to challenge the status quo of competitive offerings and expand our DEOD services to merge lifestyle and entertainment to take it to consumers when and how they want it,” said Watson.

Naspers launched its own Showmax video-on-demand unit in 2015 that has been airing a mix of international and local content to build a base of subscribers, while Netflix launched last year.

Reporting by Nqobile Dludla, editing by David Evans

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