DStv is the dominant pay TV platform in South Africa not due to a lack of competition, but due to the business decisions made by entrants like TopTV and StarTimes.
Speaking to MyBroadband in an interview, MultiChoice South Africa CEO Calvo Mawela said ICASA has done a lot to encourage competition in pay TV locally.
This included licensing several new entrants in the pay-TV space to take on MultiChoice.
“Most of them failed, but not because there was no way for them to succeed,” said Mawela.
Of all the companies licensed to offer pay TV in South Africa, only On Digital Media actually launched a service – TopTV.
ICASA granted a pay television licence to On Digital Media in September 2007, and it launched TopTV on 1 May 2010. On 29 October 2012, the company applied for business rescue.
Chinese broadcaster StarTimes offered to buy TopTV, and highlighted the following operational deficiencies in the business rescue plan:
- Low-quality programmes, high costs, inappropriate packaging, and high churn rate.
- Inappropriate packaging and marketing has no differentiation advantage compared to DStv.
- Insufficient management experience.
- Lack of scale.
- High operating costs.
- High cost of subscriber development.
MultiChoice noted that nowhere in StarTimes’ analysis did it state that any of TopTV’s misfortunes was as a result of DStv. On Digital Media had made mistakes that caused the broadcaster to fail.
StarTimes, which now owns the former TopTV and has rebranded it to StarSat, is a strong competitor to MultiChoice elsewhere on the continent.
Mawela said StarTimes came onto the scene five or six years ago, and is competing with MultiChoice toe-to-toe.
“In some markets, they outpace us,” said Mawela.
In South Africa, however, StarTimes has decided not to be as aggressive as it is on the rest of the continent.
Winning content rights
Changing to the matter of ICASA’s findings that MultiChoice has locked up all the premium content rights for South Africa, preventing strong competition, Mawela said this it is not true.
They are not preventing anyone from competing effectively, he added.
“You will never be able to get all the rights in Hollywood. There are plenty of rights we don’t have, and if you have a solid business plan, you can get those rights and offer a compelling service,” said Mawela.
He explained that sports rights come up for renewal every three years, and that they face stiff competition on that front.
StarTimes has outbid MultiChoice for the German Bundesliga, and the company said Kwesé is taking all the big boxing matches – including Anthony Joshua’s fights.
Formula One is also making significant changes since Bernie Ecclestone sold the rights to an American company, said MultiChoice.
Kwesé also has certain Formula 1 rights, and the company behind Formula 1 has started operating its own digital platform.
“There is definitely a trend that sports leagues are selling their rights directly to consumers,” said Mawela.
They have started to see this with US organisations like the NBA, MLB, and NFL, and expect that this trend will continue as global broadband penetration increases.