MultiChoice CEO says the future is online, but playing fields need to be levelled
Regulation,” tweeted RECM chairman Piet Viljoen last week, is “the last refuge of scoundrels”. But pay-TV operator MultiChoice, which has called for the regulation of fastgrowing video-streaming competitor Netflix, has hit back. Business Day spoke to MultiChoice CEO Calvo Mawela.
We are not against any competitors entering the market; this company was built on the basis of entrepreneurship and being first to launch and that’s [our] DNA. Icasa … proposed that they needed to regulate pay television much more. We then said: this discussion would have been relevant 15 years ago when people consumed content only via satellite television such as ourselves. Today, the audiovisual sector is so wide that people consume on social media, YouTube and online shows — that’s where the future is going.
We’ve also seen ourselves impacted so we’ve launched Showmax and DStv Now, our live-streaming service. But all this regulation … you are just making sure that we continue to be strangled, while online players have no regulation. Netflix doesn’t have to register a company here. They do not have to pay income tax, they do not pay VAT. We have to pay all of this and you are trying to impose further regulation on us. We are saying: it’s unwarranted … rather liberalise and level the playing field and make sure that Netflix is subjected to basics. And perhaps stretch it further, like the EU has done, and impose local content obligations.
It’s not fair to have a competitor not pay their dues, but when you say this was something that Icasa should have looked at 15 years ago, should MultiChoice also not have better prepared for the Netflixes of this world?
There was a guy who wrote: Icasa is trying to regulate steam trains while we have aeroplanes and cars. We are saying: gone are the days where audiovisual services are consumed by a pay-TV operator; people have a variety of choices in how they consume content, therefore forget about regulating the old, look at the new content offerings and see whether there’s a need for regulation or not. You don’t need [to be] heavy-handed. What did we do when we realised that people like to consume online? We launched Showmax six years ago, before Netflix came to the country. We think with Showmax we are competing toe to toe. So don’t think we are not doing anything. We are dealing with an international player who has got much more resources than us; they don’t have legacy technology like us wherein you need to still keep the business going and then invest in a new online offering. We are preparing ourselves very hard and you will see how Showmax is going to improve. If Netflix think that they are going to destroy us they’ve got something coming.
You say you’re competing toe to toe, but you are clearly losing people to Netflix?
People are moving to online…. You see it in the UK with BSkyB; people no longer have one subscription that they feel gives them the right offer. So we see people picking up Netflix, Amazon Prime, while at the same time having the old technology like ourselves for sports content…. We see the future as online and we are investing in it and there are things that we can do that they won’t be able to.
On sports production we are the best in the world. Our local content can beat any local content: the likes of Isibaya, The River and so forth have demonstrated that yes, they are sellable anywhere in the world. We just need to build on that. And as much as we have got less money [than Netflix] we spend it wisely.
Is the satellite, pay-TV model dead in the water?
The model has changed. However, I would not … say with certainty that in 15 years satellite [will be] dead. Where there is broadband across the country, there are people who keep the satellite offering and still subscribe to Amazon Prime etc. With the dishless product that we are going to launch early next year, people will not need a decoder, everything will be streamed straight into your TV and you should be able to consume content on a subscription level. It reduces the cost of acquiring a subscriber.
Sport has been the bulwark for MultiChoice, but what if sports bodies decide to set up their own streaming service to cut out the middleman. Wouldn’t that be catastrophic?
We are seeing that happening in some parts of the world where sports bodies are beginning to stream directly to consumers. However … you are entering into a whole new business model, you need customer service, you need to have the billing infrastructure, you need to be like us more or less.
I think sports bodies will differ in how they package their content. I don’t think it will be catastrophic. In Africa, we lost some of the rights: we lost the Bundesliga, the English Premier League in the rest of Africa and during that time we saw subscribers even going up because we had more money to spend on local content.
You should be able to get subscribers if you study your market correctly and give them what they want to see.