The Independent Communication Authority of South Africa (Icasa) has been holding public hearings this week as part of an inquiry into Subscription TV Broadcasting Services.
It’s not a very well kept secret that starting a subscription TV service in South Africa is tough. Remember TopTV? How about AwesomeTV? Okay we made that last one up but the fact that we can only think of one other “big” pay-TV service (which was eventually bought out by StarSat) speaks volumes.
Icasa hopes to find out why several subscription-based TV services have failed to launch while MultiChoice’s offering – DStv – continues to grow and remain seemingly profitable.
During its submission this week, etv noted that within the subscription TV broadcasting services “there are structural and legal impediments in the market in RSA where it becomes evident that the result is inequality.”
The free-to-air television station went on to say that it cannot afford bidding rights for content as it draws its income from advertising and it would “not be able to recoup the costs” associated with bidding for content.
And then MultiChoice made its oral submission.
"Costs are rapidly escalating, with billions of rands of investments" "yet subscription fees for most bouquets have either remained constant or declined in real terms" – MultiChoice at our public hearings.
— ICASA (@ICASA_org) May 11, 2018
Ahead of its oral submission MultiChoice chief executive officer was quoted by Business Day as saying the hearings were irrelevant because services like Netflix had come into the market and were pushing subscription TV services out of the market.
MultiChoice argues that services such as Netflix should carry the cost of regulation much like it does. While we wholeheartedly agree with this sentiment that isn’t what is being debated here. Netflix is an over-the-top service and how that should be regulated is still a matter up for debate.
What is being debated is why other pay-TV services have failed or failed to reach a level of success DStv has. Icasa wants to level the playing field and we find it strange that MultiChoice is looking for every way to stop that push.
MultiChoice can argue that it doesn’t have a monopoly on the subscription TV market but according to a submission made by the SABC, DStv has a 97 percent share of the pay-tv subscription market in South Africa.
MultiChoice did say that other pay-TV operators failed to launch due to bad business decisions and lack of resources though we do find ourselves wondering how exactly any operator is meant to compete against MultiChoice when it comes to broadcasting big sporting events or the latest TV series.
We also can’t help but mirror what much of social media has been saying this week: MultiChoice didn’t innovate, Netflix did, who’s fault is that really?
Multichoice blaming Netflix for loss of customers is exactly what the metered taxi industry is doing to Uber. If You do not innovate in this fast moving era, You will be left behind…
— Brigadier General (@ChiefExo) May 10, 2018