The first phase of DStv BoxOffice, MultiChoice’s on-demand video rental service, launched at an event in Johannesburg last night (21 July 2011).
John Kotsaftis, CEO of DStv Online, revealed that the service would start becoming available to DStv Premium subscribers from Thursday evening and offer 48 hour video rentals at an introductory price of R25 per movie.
How does it work?
Kotsaftis explained that the service offers subscribers a selection of 15 movies, all of which are downloaded to the hard drive of a PVR decoder. Though all the films are stored in the PVR, they only become available when paid for.
This means that subscribers need a PVR and a PVR subscription, and Kotsaftis said that they support all their standard definition (SD) and high definition (HD) PVR decoders at launch.
If the PVR supports the resolution, movies are available in 720p HD and there is no extra charge for renting a movie in HD as opposed to SD. Videos are stored in the same format as they would be broadcast on a DStv channel: with a Dolby soundtrack and MPEG2 encoded.
Although movies are stored on the PVR, they don’t decrease the amount of space available for recording. Kotsaftis explained that they’ve reserved space on the PVR for BoxOffice and DStv On Demand, which means existing recordings won’t be affected and subscribers won’t be able to record less video if they use BoxOffice.
Asked about the limited selection of movies, Kotsaftis explained that it is limited by the amount of space they have available on the PVR.
If they were able to stream video to subscribers over the Internet they would be able to offer more content, but South Africa’s broadband situation just doesn’t allow for it, Kotsaftis said.
New movies will be added to BoxOffice every week, Kotsaftis said. “About two or so a week.”
They plan to have around 150 blockbuster movies available on BoxOffice per year, each available for two to three weeks depending on its popularity. Kotsaftis said that they plan to have the films available for rental 4-6 months after they’ve shown on circuit.
How do you pay?
Once you’ve registered for BoxOffice and selected a movie to watch you can pay for it by credit card or by adding it to your BoxOffice account.
The BoxOffice account is handled separately from your normal DStv account, but it can be settled in the same ways: debit order, cash, cheque, or EFT.
How to stop your kids from bankrupting you
DStv have made a big deal about how easy BoxOffice is to use and even mentioned how their kids took to it like fish to water. This could be quite a concern for the parent with finite funds, however.
According to the BoxOffice FAQ provided by MultiChoice, the usual PVR parental controls apply to BoxOffice and a PIN can also be enabled to prevent unauthorised rental from your account.
Kotsaftis emphasised that the R25 per movie for 48 hours was introductory, saying that some of the films on BoxOffice will be rented below the amount it costs them for the royalties on the content, which they pay for per rental.
He said that while they would be able to charge different amounts for different movies based on what they pay in royalties, but for a service like this they wanted to keep it simple.
This is reiterated in the BoxOffice FAQ issued by MultiChoice when answering the question about why SD and HD movies are priced the same – for the sake of simplicity.
Kotsaftis also said that they want to get as many people using BoxOffice in order to achieve economies of scale, which will give them leverage in negotiations.
In a separate interview, MultiChoice SA CEO Nico Meyer added that if they get really good traction with BoxOffice it would gives them a lot more leverage in terms of what they can bring to the SA market.
Imtiaz Patel, group CEO of MultiChoice, said that the biggest input costs to Meyer’s business is content.
When it comes to BoxOffice for instance, buying the rights to a movie 4-6 months after it goes off circuit is far more expensive than getting it later for broadcasting.
Asked if they could give an idea of how much more the rights for a film would be that gets distributed through BoxOffice compared to being broadcast on a channel, Meyer said that it’s all part of commercial deals whose details he could unfortunately not disclose.