The man who built DStv into a juggernaut

HILTON TARRANT: Upper Echelon is brought to you by Deloitte – for innovative thinking and thorough strategic planning turn to Deloitte. Our guest in Upper Echelon this week, Lehlohonolo Letele, he’s executive chairman of MultiChoice. Nolo, you’ve had a very interesting career within the Naspers Group, being involved in particularly the Pay-TV side of the business, the precursor to DStv and MultiChoice, M-Net, in the very, very early days.

NOLO LETELE: Ja, I have but first I must commend you, you pronounced my name perfectly.

HILTON TARRANT: I’m from Kimberley, so…

NOLO LETELE: Ah, okay that explains everything. But yes, it’s been a career that when I look back I really think has got so many highlights and ja, I don’t regret a minute of it.

HILTON TARRANT: Looking at your involvement in M-Net and M-Net as a platform and as the precursor to DStv, was it as simple as looking at what was happening overseas and the shift from analogue to digital, from analogue to satellite or was it a more difficult transition within M-Net?

NOLO LETELE: On a personal note, is that right? Look, for me it was a massive quantum leap, if I can call it that, because I came from an environment where I worked for a very small radio station and in collaboration with M-Net then, that was in Lesotho, we worked together and started the first TV station in Lesotho, which I can take credit for. But ja and then I came across to M-Net, which was a whole new world for me in scale, call it, it was foreign to me, I’d never ever worked in an environment like this, ja.

HILTON TARRANT: And learnt very quickly?

NOLO LETELE: And learnt very quickly, of course, the culture has always been to throw you in at the deep end, which is good because that way the ones who swim are the ones that make it, ja.

HILTON TARRANT: Is that very much ingrained in the Naspers corporate culture?

NOLO LETELE: Absolutely, look, from time to time you’ll get a helping hand but generally when you have a brief you must figure out how to make it work and you must run with it.

HILTON TARRANT: How much pressure was there and has there been from head office, from the likes of Koos Bekker? This is the engine of the group, this is the flagship, I guess, of the group, this has been for 10, 15, 20 years.

NOLO LETELE: Ja and when you say how much pressure, pressure for what? What do you mean?

HILTON TARRANT: From upper management.

NOLO LETELE: To do what?

HILTON TARRANT: To perform.

NOLO LETELE: To make things happen? If we’re talking right across M-Net, then DStv, MultiChoice, look, I think the pressure to perform is enormous and to deliver it is enormous. In fact, Koos Bekker…I was fortunate that I kind of understudied the guy for a period of time and I learnt a hell of a lot but invariably you were asked how long is this going to take to deliver, it might be a business plan or whatever and you say I’ll have it within two weeks, three weeks and then he says fine, I want it on Monday…

HILTON TARRANT: [Laughing]

NOLO LETELE: So you choose, you may have to work day and night, I often had to do that but that’s good, that’s good for you.

HILTON TARRANT: And how do you take that pressure and almost transition it down within your own organisation that you’ve been leading for so long?

NOLO LETELE: What I learnt and I then implemented and executed is you then begin to realise that you run a business – and our business is very much like that – and cut it up into projects, we are very much project based in anything we do, it could be just a customer service thing but we call it and scope it as a project then it has a finite delivery timeline, which people must adhere to. In that way everyone has their eye on the delivery date and the quality aspects of the project. So that I think was a massive learning for me and for the organisation because my job was to actually cascade it down, ja.

Nolo Letele

HILTON TARRANT: Coming from an engineering background did that help?

NOLO LETELE: It did, it did, I think I’ll probably get shot down when I get back but no, look, I think engineers are very disciplined and have learnt how to scope and spec any activity and have very finite measurables so that you know exactly what you’re meant to deliver and how to get there.

HILTON TARRANT: Going back to Lesotho very briefly, do you go back often?

NOLO LETELE: I do, I try to go there once a month, I still have friends, relatives and so on, ja. So I do that a lot, ja.

HILTON TARRANT: Looking at Pay-TV as a business and having had the pleasure of speaking to Koos Bekker very recently he gave the view that the window for a competitor to a traditional satellite television operator, not only in South Africa, obviously the travails of TopTV are very well documented, but globally that window perhaps closed a decade ago and that within the past ten years any new entrant has really struggled. Is that a view that you subscribe to?

NOLO LETELE: Ja, absolutely I do, if you think about it the way technology is moving, the way consumption of media is moving, which is now really online based, for anyone to begin a business that’s satellite delivery based is a massive investment, people often underestimate that. We went through a very deep well in terms of our losses before we turned profitable and to start a new satellite business today in a market which is increasingly less linear; people don’t anymore just sit and watch television that’s been fed to them in one direction. It will become that much more difficult, I think that’s a global trend, I agree with him on that.

HILTON TARRANT: That threat to pay television, that threat to linear programming coming from the internet, we can only look at the US and see how quickly that market is moving with things like Hulu and Netflix, is there a sense of – I would hasten to call it paranoia – but is there a sense of real deep concern within the business that we need to innovate, we need to out-innovate this?

NOLO LETELE: Absolutely and it’s a very heightened sense, even call it paranoia, I think that’s a very good word, it occupies our minds on a daily basis. We ourselves know that we cannot stay in the satellite space forever, we have to move, we have to transform and actually embrace IPTV and broadband and what it can deliver, that’s the future.

HILTON TARRANT: I guess it’s that same kind of culture that Steve Jobs worked so hard to instill in Apple where for Apple to keep succeeding it had to almost kill its most profitable flagship product every couple of years.

NOLO LETELE: Ja, ja and he did that well but ja that’s Steve Jobs, he’s one of a kind.

HILTON TARRANT: Nolo, BoxOffice, is that something that took a long time to gestate within MultiChoice or was it an obvious no-brainer, a quick project, a quick win?

NOLO LETELE: Look, BoxOffice took a while for us to implement, the technology had to be ready, the decoders had to be capable and the business model itself is still a work in progress. It’s just one of those things that the studios they take the lion’s share, so we are seeing it more as a value-add than anything else. Until such time as you can actually access 10 000 or 100 000 titles and that can only happen online, until such time we will continue to provide BoxOffice as a value add, just for the stickiness of keeping our customers.

HILTON TARRANT: You mentioned the studios there, to what extent do the studios and your content partners and content providers almost try and shape the direction that you’re going in? Are you very beholden to them or is it more a collaborative effort?

NOLO LETELE: Look, the studios, I don’t think they hold the power to be honest. Theirs is basically to capitalise on any possible, call it platform, whether it’s BoxOffice or video rent or sales or Pay-TV or free to air and nowadays online, etc. So the studios that’s what they do, I think the power still sits with the person that owns the customers, ja.

HILTON TARRANT: Mobile television hasn’t really taken off, we saw maybe three, four, five years ago there was a lot of hype around mobile television, it was going to revolutionise the way we consume  and that really hasn’t lived up to that hype. Although Drifta and all those devices are suddenly becoming a lot more common place, you’ll go to the cricket and you’ll see people sitting using their Drifta, you’ll see people in places of work, is that more a kind of mobile television by stealth?

NOLO LETELE: No, I don’t think so, you’ve just got more devices to watch it and it’s far more enjoyable. You mentioned Drifta, what about the Walka, which is a nice bigger screen, almost like the Samsung Tablet but it’s hugely popular and you’re right, people…I was just at the Nedbank Golf at the weekend and people would be sitting around and they’d be watching the game and seeing something that they could not see with their eyes because they are somewhere else and seeing maybe a different pair of players. So is it mobile television by stealth? No, I don’t think so. Mobile television is here, as you know, and again mobile television for us is a value add, there’s no business model in the world where as a standalone service it’s making money.

HILTON TARRANT: And I guess in terms of SuperSport and the sport programming probably the best use case currently in mobile television?

NOLO LETELE: Yes, I think so. Look, for news as well people watch but yes, I guess it would be for your sports it’s probably the best use case, you’re right. But ja it’s complementary to DStv basically because you can travel with it, you can stand in a queue and watch, if you’re killing time somewhere you can watch something, ja.

HILTON TARRANT: Nolo, what about regulation, Koos Bekker has been quite outspoken over the past couple of years about regulation and perhaps over-regulation, what are your views on regulation and where South Africa finds itself?

NOLO LETELE: In the same breath I would say that regulation is intensifying everywhere in the world, so it’s almost what you call a necessary evil, in South Africa probably even more so you see regulation. The problem I think that in South Africa is regulation is actually hampering progress simply because technology and everything is moving that much faster, innovation and the opportunities for innovation are there and could be happening much quicker in this country but because we’re kind of paralysed by regulators wanting to regulate first before allowing the industry  to then experiment and perform and implement and innovate, and it’s taking far too long and that’s why we’re lagging today. For instance in our internet penetration and in broadband, we’ve probably lost about seven or eight places in Africa alone because of the slow pace of regulation. So whereas in countries that are really, really fast moving normally the industry is allowed to play around, in fact the regulator says play, experiment until I tell you to stop because by then it’s clear what’s emerging and where the pattern is going. So the regulator is then able to say right, this is how we will do this. Here they say don’t do anything at all until I’m ready and that way we are all kind of paralysed, so that needs to change I think.

HILTON TARRANT: What does DStv look like in two or three years’ time?

NOLO LETELE: Oh, ask me what it looks like in a few months, I’ll tell you a lot would have changed. No, DStv is a very fast moving train because we’re embracing a lot of new concepts. Look, the decoder of the future itself will be very different, you’ll have a decoder that will be connected online back to our head end and, as I mentioned earlier, then you can access content online…

HILTON TARRANT: Tens of thousands of movies.

NOLO LETELE: Tens of thousands ja and also I suppose the decoder is one thing, the content as we receive it itself I think will be less linear, people – I think primetime is going to die – people will be able to just watch anything anytime. I think you’ve heard this before, it’s finally happening, ja. So DStv the name says DStv but it’s not…you don’t unpack that and say it means digital satellite television, no, it’s much more than that and it’s embracing a number of platforms now – online, satellite, terrestrial and, and, and. Ja, we want to be able to continue to provide our content, that’s our strength, and our service that’s our strength.

HILTON TARRANT: Just looking at a couple of bigger picture issues, obviously you’ve been one of the  faces and voices of, I guess, one of the more successful broad-based empowerment plans in the country, Phuthuma Nathi . What does empowerment mean to you, Nolo Letele?

NOLO LETELE: Look, empowerment for me means that we must strive to let in a broad base of black people across the spectrum, the economic spectrum as well so that even the man in the street, your gardener, etc can partake and this is what we achieved. With our Phuthuma Nathi scheme we have 120 000 shareholders, which is great and it was actually quite a novel idea at the time, the first of its kind, so that’s been a great success story. But more of this kind of thing needs to happen, it should not just be for the few.

HILTON TARRANT: How do we get more? How do we do more?

NOLO LETELE: In the country? Look, I think more and more when…look, I think a lot of players have to come to the party, the financiers, the banks, the companies themselves instead of a private invitation to a black consortium to come in and partner. It’s to open it up basically and just make a call out there for the public to come forward that qualify and partake. So it’s about structuring these schemes so that they can be affordable and this can be done, it can be achieved and then it becomes a wonderful story for the country because not enough people that were disadvantaged have a stake in the economy.

HILTON TARRANT: Final question and I am starting to ask pretty much all our guests in Upper Echelon this, what motivates you?

NOLO LETELE: What gets me up every day? [Laughing] Plenty, I suppose for me I just have this burning urge to function, to perform and to create new goals and to pursue them that will never stop. I’m just fortunate because I love this environment that I’m in, which is call it Pay-TV, DStv because of the innovation that’s taking place and it’s so dynamic that often when I was…I’m executive chairman now, so maybe it’s a slightly different perspective but when I was group CEO for 12 years, sometimes you’d get up and go to work and not know what’s going to happen that day and that’s what made it so fresh and exciting.

HILTON TARRANT: Nolo, it’s been an absolute pleasure. Nolo Letele is executive chairman of MultiChoice. Upper Echelon was brought to you by Deloitte – for innovative thinking and thorough strategic planning turn to Deloitte.

Source: Moneyweb

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