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Johannesburg - A growing demand for new content by consumers is stimulating the launch of new over-the-top (OTT) service providers such as Discover Digital, which will debut its stream sports programmes over the internet from mid-year.

On Friday Stephen Watson, a founder of Discover Digital, said the firm was pursuing the acquisition of traditional video content and sports.

The company has acquired streaming, download and electronic sell through rights to a premier national motorcycle racing category, the Monster Energy Super GP Champions Trophy. In November it concluded a development and agency partnership for content with in Ireland.

Watson said his firm spent two years to research and develop an OTT solution for the African market. It considered people living in a connected home environment and those in unconnected homes who could not download content from the comfort of their couch, but would have to buy the content from a kiosk.

The news comes as MTN Group, Africa’s largest wireless operator, is rumoured to be in discussions with an Asia-based content provider to offer streaming movies and television-show services to South Africans, people with knowledge of the talks have told Bloomberg News. A deal is expected this year.

Vodacom has also discussed a content deal with DStv owner Naspers and Vodacom’s England-based parent firm is in talks with Netflix about access to the streaming service.

Telkom, the continent’s largest fixed-line services provider, had been in talks with Comcast, Bertelsmann, Naspers and Netflix, Sipho Maseko, the chief executive, said in an interview last year.

Netflix, however, recently told local online publication Mybroadband that it was not in negotiations to enter South Africa. It did not reply to an enquiry from Business Report.

Watson said: “The key video-on-demand market is massive.”

The market comprises two categories of video-on-demand models. The transactional video-on-demand has been accessible to many in the form of video stores. Another model is the subscription video-on-demand model that broadcast platforms such as DStv’s Box Office product offer. “Our kiosk model [is like a] video store in a square metre,” he explained.

Watson believed that as broadband became more accessible and affordable, it would place pressure on traditional broadcast models that would experience competition from OTT providers, who stream services over the internet at cheaper rates. He said for example, OTT providers such as US-based company Netflix offered content for $8 (R85).

But Watson is undeterred by potential competition from international providers because international streaming is prohibited by cost. “The only way to do it properly is to have resident content,” he added.

Discover Digital has acquired adaptive bit rate technology, which enables optimum streaming video viewing, to match the signal strength for the type of device on which the content will be viewed, according to Watson, who declined to comment on the investment made into business so far.