To the swift go the spoils, runs the old saying, and nowhere is that more true than with regard to the speed of your internet connection. My eye was caught this week by two announcements that emphasise the truth of this assertion.
The first was by Telkom, in its Integrated Report for 2015, bemoaning the fact that “smaller providers of fibre” have been “cherry-picking the suburbs they want to serve. Group CEO, Sipho Maseko, says “Telkom’s response to this type of competition needs to be carefully thought through.”
The second came from the world’s biggest online retailer Amazon, which has signed former BBC Top Gear presenters Jeremy Clarkson, Richard Hammond and James May. Clarkson was fired by the BBC earlier this year for punching a producer; May and Hammond turned down lucrative contract offers from their former employer to follow Clarkson.
Amazon will use the trio to present a TV series that will premiere sometime next year and will be available only for subscribers to Amazon Prime, the video-streaming service which Amazon uses to compete against Netflix.
Neither Amazon Prime nor Netflix have made significant inroads into the South African market yet (at least not that I am aware of) but they will, provided Internet access speeds continue to increase.
This has been the pattern everywhere in the online world so far, and there is no reason why South Africa should be an exception. The evidence to back this claim lies in the fact that the more affluent suburbs in places like Johannesburg, Pretoria and Cape Town are demanding super-fast access just as soon as someone can lay the cables. Super-fast in our case means fibre-optic cable – known in the industry jargon as FTTH – Fibre-To-The-Home.
That someone has not been Telkom. Nor will it be going forward, on the basis of Mr. Maseko’s suggestions that his company’s response “needs to be carefully thought through”.
Put very simply, Mr. Maseko, there’s nothing to think about.
Telkom needs to roll out as much FTTH as fast as it can in as many centres as possible. If it doesn’t, other contractors – not necessarily smaller – will put them out of business. You snooze, you loose.
How important is fibre generally and FTTH, in particular? Consider that Google’s YouTube video service is now the second largest search engine on the planet and second only to Google itself. It has taken YouTube roughly 10 years to reach 4 billion page views per day. Then consider that Facebook introduced its video service no further back than September last year. It too now has 4 billion page views per day.
The key word in the above paragraph is video. Video is not good on Telkom’s standard 4GBs DSL connection. It’s acceptable at 10GBs – but only really when it goes above 30 or 40GBs does it become a game changer. That’s when arriving home and selecting exactly what you want to watch, usually ad-free via a subscription service, becomes viable. That’s what has driven the extraordinary growth of Netflix, and why Jeff Bezos has just hired the former Top Guns of Top Gear.
It’s also changing the game for marketers, who now have a completely different process to think about. If you haven’t found her yet, check out Suzelle DIY on YouTube, one of several home-grown video sensations. You’ll catch a glimpse of her in a couple of new commercials for Checkers with foodie and comedian Nataniël. Writers are now creating scripts and characters, launching them on the video channels, growing an audience and then only approaching corporates to buy or sponsor the new products.
There’s also a fair-to-middling chance that truly fast Internet will change the relationship between large numbers of consumers and Multichoice/DSTV. After all, why would I want to pay – as I do now – for endless channels of rubbish that don’t interest me, when I can get exactly what I want via my computer?
I for one will certainly watch Clarkson and Co. on Amazon Prime – but only when I have suitably quick Internet access, i.e. FTTH.
Now, who’s going to get it to me first?
Chris Gibbons: Speaker, writer, broadcaster and media trainer. Edits GIBS Acumen; presents AlgoaFM Morning Markets.
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