Given their latest worldwide launch announcement, Netflix will have to deal with and solve some challenges in the Kenyan market.
I was just taking a break from a coding sprint and peeked on Twitter trends in Kenya, the hashtag #NetflixInKenya caught my eye: as always, Kenyans On Twitter (KOT) are a funny lot.
Kenya is a promising market, but Netflix will have the following three main problems to solve.
I’m not talking about the unconnected millions in the rural areas, I’m speaking of the nature of internet access.
The best market offer by Orange, a mobile service provider costs Ksh. 2,999 per month — approximately USD$ 30.
Don’t be fooled though by the unlimited bit, your data usage has a cap on it, so you’ll stream at a good speed for about 15 days — then get that nasty text from Orange informing you that you’ve exceeded their fair usage policy and you’ll now access internet at a lower (read crawling ) speed.
So the real cost of a basic Netflix bouquet (at USD $ 7.99) is actually USD $37.99, equivalent to Ksh. 3,799.
This is at ceteris paribus — what economists refer to as all other factors holding constant, but as you already suspect, economic factors are rarely constant.
I suspect only a handful of Kenyans will fork that kind of money for a movie streaming service.
One of those factors assumed to be constant — you need to own a computer of sorts (laptop, tablet, smartphone) or a smart TV.
Now in terms of basic UX in Kenya, watching is mostly done on TV which means that for the average household to watch anything on Netflix, they’ll require a Smart TV — that’s a stumbling block in the adoption curve.
Smart TVs are not a given for the average urban Kenyan household: that’s why decoders played a major role in the switch from analog to digital television.
So, unless Netflix makes partnerships with the likes of GoTV, Zuku and StarTV among other decoder service providers — it will just be a fringe product used by a select few.
Here’s an interesting fact — all Kenyan households that own a TV also own a decoder: thanks to the digital migration that happened in 2015.
Tech savvy folks stream movies from torrents and pirate movie sites on their computers whilst the rest source for movies and series in nearby video libraries.
Video libraries in Kenya constitute a formidable stumbling block for Netflix, mainly because: they download and burn torrents on DVD disc for sale at USD $0.5 or Ksh 50 — buy 4 movies and get one free.
If you bring your USB flash disk or external hard drive, a movie or series season’s price drops down to USD$ 0.3 or Ksh 30.
Plus they actively offer movie recommendations based on the customer’s movie taste or just quick street-smart profiling of a new customer.
This is very important for the majority of Kenyans, they can access entertainment in an easy-to-understand medium (good old DVD disc) at a dirt-cheap price.
Explaining how Netflix works is like pitching the virtues of using bitcoins to the average person in Africa — it’s a tough sell.
The government of course has made piracy of this sort a crime — yet local businesses get registered as video libraries (read movies & series pirates) and actually pay taxes.
This is a tree that the government of Kenya doesn’t consider worth shaking, so video libraries are here to stay.
So dear #NetflixInKenya, you’ve got your work cut out — let’s see how you innovate around this, including the use of Swahili names for your products: a tactic that has been successfully used by the leading telco (Safaricom), over and over again.
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