ICASA has published a discussion document on its inquiry into the subscription TV market.
It found that MultiChoice has significant market power – enjoying a 98.1% market share in the subscription TV space. Deukom and StarTimes are considered MultiChoice’s competitors in pay TV.
ICASA said it looked at what constitutes premium content, in addition to premium movies and other TV content. It also created a separate category for sports, stating that live sports was premium content.
Its breakdown of which broadcasters own the rights to the content categories is summarised below.
|South African Rugby Union||Rugby||MultiChoice|
|Cricket South Africa||Cricket||MultiChoice|
|SA Premier Soccer League||Soccer||MultiChoice|
|UEFA Champions League||Soccer||MultiChoice|
|Spanish La Liga||Soccer||MultiChoice|
|English Premier League||Soccer||MultiChoice|
|UEFA Europa League||Soccer||MultiChoice|
|SAFA – Bafana Bafana||Soccer||Siyaya|
To address “MultiChoice’s dominant position in the market”, ICASA proposed six possible remedies – detailed below.
Stakeholders have until 31 October to make submissions to ICASA on its suggestions.
1 – Shorten exclusive contracts
Using European standards as a benchmark, ICASA said rights contracts may not be longer than five years.
Broadcasters undertake long-term content agreements to reduce the effective cost of transacting, but at the cost of competition, it said.
2 – Unbundling
ICASA said sports rights should be unbundled, similar to Europe, and rights should be sold under the following conditions:
- Open tender.
- Allowing more than one buyer.
- No excessive exclusivity, with three being considered the general norm.
- No automatic renewal of contracts
3 – Rights splitting
ICASA said rights-owners must split their content rights and sell them to more than one broadcaster.
Consumers may find it difficult to subscribe to several service providers to get access, but it has the advantage of allowing smaller entrants who do not have deep pockets to bid for rights.
4 – Wholesale-must-offer
Wholesale must-offer regulations, which UK regulator Ofcom imposed on BSkyB’s Sky Sports channels, is another option. This allowed other channels to acquire key sports rights.
Ofcom launched a review of the regulations in 2014 and found that the availability of sports and Internet TV services made the regulations unnecessary, however, and scrapped them.
ICASA believes such regulations may still be a feasible remedy in SA, though.
5 – Open up the network
ICASA said forcing MultiChoice to open its distribution infrastructure to other broadcasters is a way to grow the market.
It referenced Ofcom’s interventions as an example, where channels can distribute direct to the consumer using BSkyB’s digital satellite platform at a regulated price.
This would include the use of the existing conditional access system.
6 – Set-top box interoperability
ICASA also proposed decoder interoperability, where viewers can use one set-top box/decoder for all direct-to-home satellite services.
ICASA said it would undertake further work before proposing it as a licence condition for MultiChoice, however, due to the technical complexities.