Netflix is the US based on-demand internet video streaming service that rolled out globally earlier this year. It offers subscribers an extensive array of streaming videos. Netflix is an expensive affair. To access it, you need a proper working broadband internet, a specialized device like chromcast to stream if you don’t have a smart TV or a computer, and pay a monthly subscription fee. This is out of reach of many Kenyans.
Despite it being expensive, Netflix will disrupt the Internet landscape in Kenya. It will bring Internet prices down, increase internet access and coverage, and increase competition in the industry.
Netflix is accessed through a broadband Internet connection. That means the 30 million internet users can theoretically access it. But they can’t since majority of them only have feature phones. Those with smartphones must be ready to break the bank to have enough data bundles to stream movies month in, month out.
Affordable unlimited internet is the only way many Kenyans will be able to access Netflix. How Internet Service Providers (ISPs) improve their products and coverage to cater for home users will determine the uptake of Netflix. Zuku, and Jamii Telkom (JTL) are poised to lead on this one because they relatively have the best products on unlimited fixed broadband access in the market. But they will feel the heat because the international Netflix traffic consumes a lot of bandwidth. This may lead to trotting bandwidth to survive. Cellular companies like Safaricom, Airtel and Orange too can capitalize on Netflix demand if they can have competitive unlimited broadband Internet. Airtel’s Unliminit product seem to be popular within the low income bracket. Satellite provides too can roll out VSAT and cover underserved regions. The entrance of Kenya Power in the fray may be what the consumers need. Bruising competition.
ISPs are barely scratching the surface with JTL having 7,486 and Zuku 50,000 subscribers. According to Communications Authority of Kenya (CA) data, broadband subscriptions increased by 19.3 per cent to reach 6.3 million in 2015, marking a penetration level of 14.7 per cent. Most of these being from cellular companies.
Our market is unique. The cost for Netflix alone is around 800 bob a month, but the cost of unlimited broadband is around 4000 bob. 800 bob can give you 16 DVDs in River Road, enough to entertain your family for a whole month. Technology must match the cost of buying a counterfeit DVD to dismantle that market. That day is coming.
To promote locally hosted content uptake, ISPs may need to discriminate between local and international transit. Netflix should setup a local cache, and ISPs should give an unlimited package for local content for say Ksh1000 a month, that will see local content production and utilization explode.
This may go against net neutrality principles, but since CA has not given any policy direction on the same, the ISPs may take advantage of it. A cache peering at the Kenya Internet Exchange Point (KIXP) will make the service really affordable because the cost of international bandwidth will be eliminated.
Every user I meet who lives outside the coverage area of fixed cable internet is praying that they roll out in their neighborhoods, although the ISPs are hesitant since the only wish to invest in areas where they have the highest return on investments.
I live in one of the most non digital estate, a place called “Rungiri rwa Ngwaci”, where my village mates may never have use for the internet and where zuku or JTL would never have thought of venturing. But with Netflix, we might see places like “Rungiri rwa Ngwaci” covered because my neighbors may see the use of Internet as a tool for entertainment.
When we reach that stage where internet is a utility like water and electricity, then we shall know development. Before then, let me renew my internet bundles before they expire. There is one more reason to have Internet at home. Family entertainment.