MultiChoice defends decision to dump e.tv channels

MultiChoice has hit back at e.tv’s parent company saying eMedia has the ability to distribute its own content after the pay TV operator was accused of “exclusionary conduct” and abuse of dominance because it discontinued the broadcast of four of its channels from the DStv platform. 

Worth R1.82bn, eMedia owns television and radio broadcasting businesses that include eNCA, OpenView and Yfm, together with production studios.

The group, which owns various e.tv channels, has taken MultiChoice to the Competition Tribunal — which has the final say on competition related matters — after the DStv operator said it would carry fewer of its channels from April 1.

eMedia is seeking an interim relief order stopping MultiChoice from dropping its channels pending the conclusion of the case. It argues that the move would hurt its advertising income, market access and stunt its ability to invest in content.

Earlier this year, eMedia and MultiChoice renewed a channel supply agreement in which DStv opted not to carry certain eMedia channels, namely eMovies, eMovies Extra, eExtra and eToonz.

DStv now only broadcasts eNCA (channel 403) and the daily Afrikaans news bulletin on kykNET (channel 144). e.tv, licensed under a separate agreement, continues to air on the DStv platform.

All e.tv channels continue to be broadcast and are available on OpenView, eMedia’s free-to-air satellite TV service platform.

Having initially said the decision not to renew the channels was “for commercial reasons”, the former Naspers company said during the second day of hearings on Tuesday eMedia had a number of options — like Open View — through which to distribute its content.

“Open View is a highly successful service. The papers show that this is not disputed by eMedia. It’s grown and has continued to grow at a very rapid pace,” said MultiChoice. 

The Open View service has more than 2.3-million active decoders and reported 35,000 new activations each month in the past financial year.

“Pertinently, if you follow the market definition backed by eMedia of a basic satellite market in which DStv’s lower tier packages compete with Open View ... Open View has a market share of over 35%. This is not an insignificant means which eMedia itself has of broadcasting the e-channels.”

MultiChoice said the e-channels are also broadcast free-to-air on eMedia’s terrestrial offering. “Over and above that, eMedia has a range of other options to distribute the channels and the programmes on those channels. The content doesn’t necessarily need to be distributed in the form of a channel. There are other ways that they can distribute and derive advertising revenue.”

Advertising is undoubtedly eMedia’s biggest revenue earner.

In its interim earnings, eMedia said the year-on-year television advertising cake has shown an increase in excess of 40% and the radio advertising share increased by more than 10%.

The group reported an increase of 54% and 59% for television and radio respectively in the six months to September 2021. Advertising had the biggest effect on earnings with revenue ending the period up 53% to R1.058bn from the previous matching period.

MultiChoice also pointed to eMedia's eXtra channel being available on StarSat and the fact that the company recently launched its own online streaming service called eVOD.

eMedia had previously stated that it made sense to move some of its programming and content to that platform as a number of its distribution contracts came to a close.   

gavazam@businesslive.co.za