Netflix killing DStv in South Africa could cost thousands of jobs

MultiChoice has warned that if ICASA proceeds with heavy-handed regulations for the pay TV market, it could cost thousands of jobs in South Africa.

ICASA will hold public hearings on an inquiry into subscription television broadcasting services from 7-11 May, and MultiChoice has briefed the media on the feedback it will put forward.

The company will argue that ICASA must not go overboard with the regulations, and that whatever it implements should apply to the whole pay TV sector – including services like Netflix.

“Right now, it looks as though ICASA is focused only on what pay TV used to be, but it is moving from satellites to online,” said MultiChoice South Africa CEO Calvo Mawela.

In 2017, ICASA released a discussion document on the pay TV inquiry where it laid out options to address MultiChoice’s “market dominance” in South Africa.

These included forcing exclusive sports rights contracts to be shortened, unbundling and splitting the sports rights, and forcing MultiChoice to license its rights to other broadcasters.

If ICASA proceeds with this kind of regulation, it will kill DStv’s business and hand the South African market to online streaming giants like Netflix and Amazon, said MultiChoice.

Loss of jobs

“Netflix will never employ a lot of people around the world like we have. It employs around 4,000 people for the whole group,” said Mawela.

MultiChoice has 8,000 employees in South Africa alone. It said the majority of its staff are black, and that most of the people it employs are women.

At the end of its last financial year, MultiChoice’s staff complement was 87% black, and 51% black women.

It is also a level 1 BBBEE contributor, paying R10.4 billion to black suppliers in the last financial year.

While there will be jobs for South Africans working in the broadcasting sector at multinationals like Netflix and Amazon, those companies won’t have the local focus MultiChoice does.

Competing online

MultiChoice said it is also looking to take on the likes of Netflix with a streaming-only DStv package.

The fact is MultiChoice can’t invest nearly the amount of capital Netflix can, and it has to comply with local broadcasting regulations that Netflix isn’t being held to.

“We are an established, mature industry that is looking out over a cliff. These regulations will push [us] over that cliff,” said MultiChoice.

Mawela said if ICASA’s inquiry was held three years ago, while they were trying to establish a licensing framework for pay TV, it would have made more sense.

Now the market has moved on, however, and DStv is not the market power it used to be.

“It’s way too far down the line. The horse has bolted. It is time to liberalise the market, not regulate it more heavily,” said Mawela.

Now read: DStv prices in South Africa – 2000 to 2018

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Netflix killing DStv in South Africa could cost thousands of jobs