MultiChoice believes that Vidi, the new subscription video service, will suffer due to a lack of scale for its product.
Times Media Group launched Vidi in September, at a price of R149 per month.
Vidi also has a video on demand (VOD) section for newer movie releases, where it charges between R15 and R27 to rent a movie.
That was closely followed by the launch of the Altech Node, a subscription “push” VOD service and home automation system, by Altron.
CEO at DStv Digital Media, John Kotsaftis, told journalists at an event in Northcliff on Wednesday 8 October 2014: “Vidi is going to suffer the same challenges we suffered for the last five years.”
He said that DStv is excited when Catch-up has 60,000 users online. “We high five each other in the corridors,” he said, noting that it was a free service for subscribers.
“The problem I think they are going to have is scale. To launch an SVOD (subscription video on demand) product like that, a Netflix clone, over-the-top, you need to be on a myriad of devices, you’ve got to be on pretty much every smart TV platform, every device, so that you can get distribution. And then you need scale in the market, to get lots of users on broadband. We are still sub 500,000 homes that can do it. It’s very hard to build a business model on such a small number.
He said he hoped that with an increase in video on demand services the broadband situation in South Africa would improve.