Calvo Mawela. Picture: SUPPLED
Calvo Mawela. Picture: SUPPLED

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 SA 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."

phakathib@businesslive.co.za

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