Mul­tiChoice bleeds sub­scribers, calls for Net­flix to be reg­u­lated

Zambian Business Times - - BUSINESS REVIEW -

Mul­tiChoice, the pay-TV op­er­a­tor that con­tin­ues to bleed sub­scribers, is fight­ing tooth and nail to re­main rel­e­vant amid tough com­pe­ti­tion from on­line stream­ing ser­vices. The pay-TV op­er­a­tor lost more than 100,000 pre­mium sub­scribers in the pre­vi­ous fi­nan­cial year. It has lost a fur­ther 40,000 sub­scribers to date. Mul­tiChoice South Africa Chief Ex­ec­u­tive Of­fi­cer - CEO Calvo Mawela at­trib­uted this loss of busi­ness to un­reg­u­lated com­pe­ti­tion from video-stream­ing com­pany Net­flix, say­ing it had an un­fair ad­van­tage as it was not un­der any reg­u­la­tory pres­sure in SA. How­ever, Mul­tiChoice, which owns DStv, said it was aware that fail­ure to adapt its busi­ness model could make it a vic­tim of dig­i­tal dis­rup­tion. Mawela said Mul­tiChoice was cog­nisant of the fact that viewer habits had changed, with peo­ple want­ing to watch more con­tent on­line. He said that while tra­di­tional satel­lite broad­cast­ing still ap­pealed to a sig­nif­i­cant num­ber of sub­scribers, the com­pany was ac­tively look­ing to cap­ture the on­line au­di­ence. It had there­fore in­tro­duced new plat­forms, such as DStv Now, an on­line stream­ing ser­vice that al­lows sub­scribers to ac­cess DStv con­tent on­line. Mul­tiChoice was hop­ing to soon launch 4K-stream­ing, a higher res­o­lu­tion high-def­i­ni­tion (HD) for­mat, for DStv Now. The op­er­a­tor has also said it is ex­plor­ing the pos­si­bil­ity of of­fer­ing a stream­ing-only pack­age that would take on Net­flix and other over-the-top play­ers.

Loss of sub­scribers

While ob­servers say the loss of sub­scribers could also be as­cribed to the fact that con­sumers are un­der fi­nan­cial pres­sure, Mul­tiChoice ar­gues it is los­ing most of its pre­mium sub­scribers due to un­reg­u­lated com­pe­ti­tion from Net­flix. Mawela said the In­de­pen­dent Com­mu­ni­ca­tions Author­ity of SA (Icasa) should be look­ing into lev­el­ling the play­ing field to make it pos­si­ble for other pay-TV op­er­a­tors to com­pete with over-the-top play­ers. Should Icasa fail to reg­u­late over-the-top play­ers, it could lead to the demise of DStv, the com­pany has said. In May, the reg­u­la­tor held oral hear­ings in an in­quiry about sub­scrip­tion tele­vi­sion broad­cast­ing ser­vices, as it seeks to open up the mar­ket to more play­ers by, among other things, in­tro­duc­ing shared sports rights and short­en­ing con­tract pe­ri­ods for pre­mium con­tent. Mawela said Icasa’s in­quiry was mis­placed. "Firstly, we are not against com­pe­ti­tion. We em­brace com­pe­ti­tion. We love com­peti­tors to come to the mar­ket be­cause we think that, through com­pe­ti­tion, sub­scribers will be able to ap­pre­ci­ate what kind of a value of­fer­ing we are giv­ing them, and the con­sumer ul­ti­mately ben­e­fits through com­pe­ti­tion. How­ever, Icasa is say­ing to us we need to reg­u­late you more." Mawela said over-the-top play­ers such as Net­flix should be sub­ject to the same reg­u­la­tions as Mul­tiChoice, adding that this was in the in­ter­ests of the coun­try. "As a coun­try we have na­tional ob­jec­tives … if I was to be very nar­row, I would say [to Icasa]: treat us like Net­flix, so we do not have to pay tax or com­ply with black eco­nomic em­pow­er­ment reg­u­la­tions. "I am say­ing bring the likes of Net­flix in the same net. Net­flix does not em­ploy even one per­son in this coun­try, it doesn’t pay tax, they do not have to do any lo­cal con­tent." Mawela said sub­ject­ing the likes of Net­flix to the same reg­u­la­tions would al­low the pay-TV op­er­a­tor to "com­pete toe to toe". Re­spond­ing to ques­tions, Net­flix said "around the world [ it] in­tends to abide by lo­cal laws and taxes and we are happy to col­lab­o­rate with reg­u­la­tors". Last week, Icasa spokesman Paseka Maleka said the reg­u­la­tor was analysing the var­i­ous sub­mis­sions re­ceived on the in­quiry into the pay-TV mar­ket. He said the reg­u­la­tor planned to pub­lish the fi­nal find­ings by March 2019. Me­dia Mon­i­tor­ing Africa di­rec­tor Wil­liam Bird said: "The sim­ple truth is we need both. [ We need to reg­u­late] Net­flix and reg­u­late the area of mo­nop­oly."

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