Icasa checking MultiChoice

THE Independent Communications Authority of South Africa (ICASA) says it has yet to be convinced that streaming giants such as Netflix and Amazon are the reason behind MultiChoice South Africa’s massive loss of business.

MultiChoice, which operates DStv, claims it lost more than 100 000 DStv Premium subscribers in its last financial year from the “unregulated” competition it faces from “over-the-top” internet streaming services such as Netflix.

MultiChoice SA chief executive Calvo Mawela yesterday presented this argument to Icasa’s panel on the final day of the communications regulator’s public hearings.

The hearings, held from Monday, were an enquiry into subscription television broadcasting services.

Icasa wants to address MultiChoice’s “market dominance” by further regulating the firm. However, MultiChoice has argued that if Icasa introduced more regulations, it would kill DStv’s business and hand the South African market to online streaming giants.

According to MultiChoice, Netflix and other international streaming companies “do not pay tax” in South Africa, and also did not contribute levies to organisations such as the Media Development and Diversity Agency or Universal Service and Access Agency of South Africa, nor did they pay broadcasting licence fees.

MultiChoice said Icasa’s council must not go overboard with regulations, and that whatever it implements should apply to the whole pay-TV sector. “We understand that OTTs (Over the Top services) have come into the market and they have had serious growth and their revenue figures have substantiated that,” said Nomonde Gongxeka-Seopa, an Icasa panel member.

“What we are missing is how this had an impact on the pay-TV market, which you haven’t provided us with. You have provided us with graphs on how OTTs have affected pay-TV stations in countries like the UK and the US, but we need research within the SA market to convince us that these OTTs are actually competing with pay TV.”

Icasa gave MultiChoice until May 31 to provide it with “empirical evidence” that there is a direct link between the presence of OTTs and its drop in revenue and subscriber numbers before they made a decision whether it would further regulate pay-TV stations.

MultiChoice had 8 000 employees in South Africa alone. At the end of its last financial year, its staff complement was 87% black, and 51% black women. It was also a level one BBBEE contributor, paying R10.4 billion to black suppliers in the last financial year.

Icasa said MultiChoice needed to be aware of other factors that could have played a role in their loss of business. “It’s possible that the economic climate in South Africa might have changed in that time and that is why you may have experienced a loss of subscribers,” said panel member Botlenyana Mokhele. “For us to apply our minds based on the facts that are presented to support your argument, we need you to provide sufficient evidence.”