MultiChoice sees a streaming future with DStv: Here’s why it better hurry

In a sign of streaming video is affecting traditional broadcasters, DStv will launch its own internet video service having seen Netflix account for a loss of 100,000 DStv subscribers. (Read more here.)

This news follows an inquiry by the Independent Communication Authority of South Africa (Icasa) into the subscription television broadcasting sector.

MultiChoice CEO Calvo Mawela told Stuff these were “irrelevant” because streaming services like Netflix have superseded traditional broadcasters. The proliferation of over-the-top (OTT) providers like Netflix and Amazon “are denting our business. We have lost over 100,000 subscribers in SA and rest of Africa,” he said.

Such providers are “global giants with big pockets” who are “unregulated and don’t have to do BEE and all the other requirements we do,” he added. “If you keep on trying to regulate us more and more, they are going to destroy the TV industry overall.”

This week Mawela told TechCentral that “we are in the early stages of the development of this [streaming service] and it’s in line with what DStv Now offers. We want to improve it to get it to a stage where we can go fully to market on this”.

He said this year isn’t likely so expect to be able to streaming DStv via the internet by 2019.

To my mind Icasa is policing steam trains when the real battlefield is now in internet streaming video on demand (SVOD) services. (Read my column here.)

Netflix has evolved from posting DVDs to offering old TV shows, to being the biggest spender on is own original content. This year it will spend $8bn, a $1bn increase over last year’s $7bn. Meanwhile, in 2017 Amazon spent $4.5bn and Hulu $2.5bn. Apple is also understood to be planning heavy investment in its own video offerings.

“Everyone is moving to online. They need to treat like-for-like services the same so that it levels the playing field,” Mawela said of Icasa.

But MultiChoice better hurry. Last month analytics firm GfK reported that “some 20% of South Africans who sign up for a subscription video on demand service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription”.

“The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour,” says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK of the GfK ViewScape study which examines broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.

“The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DStv Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.”

MultiChoice is still the biggest television player in the  country. “We contribute over R14bn to the GDP, employ 8,000 people in SA, spend over R2bn on local content and over R1bn in sports in this country. All of those are at stake of disappearing form the economy of this country,” he added.