Gov’t must back off on MultiChoice

It is absurd that government should even consider forcing MultiChoice to share its content with its rivals. By Chris Moerdyk.

Chris-Moerdyk-180The ongoing spat between government and MultiChoice about the pay-television operator monopolising content rather reminds me of a domineering parent chastising his child for not sharing his toys without realising that the poor kid is being bullied to death at school.

It is absurd that government should even consider forcing MultiChoice to share its content with its rivals, particularly the public broadcaster, at cut-rate prices.

The fact that MultiChoice is perceived to have a monopoly on movies, sport and series content is not their fault.

If anything, government and communications regulator Icasa are to blame for the fact that subscription TV licences have been granted almost willy-nilly over the past few years, without any of the successful applicants being able to get things going let alone actually get to the point of being able to broadcast something.

Sure, MultiChoice got in first and yes, MultiChoice did tie up all the great content. That is not their fault. That is business.

In a country that is supposed to espouse democracy and a free market economy it is completely ridiculous to consider punishing a company for succeeding so well at what it does.

But the real irony is that government, and Icasa for that matter, are behaving like that abusive parent punishing his kid for not sharing his toys with his siblings while a far greater threat is heading towards them like a tsunami.

Very simply, MultiChoice and its DStv bouquet have some serious competition. It is called the Internet and in the not too far distant future, it will destroy the satellite television model.

And this is not something that Icasa or government will be able to control. South African consumers with reasonable bandwidth will be able to subscribe to myriad global services like Netflix and then download or watch a huge variety of news, sport, series, documentaries and archive material whenever they want it. Telkom is already looking at this very seriously.

MultiChoice has also already started preparing to change from a real-time satellite TV broadcaster to a resource-based and curated content supplier to subscribers whichever way they want — via satellite, cable or Internet protocol television (IPTV).

The new DStv Explora decoder carries the clue. Its Catch Up service is burgeoning into an easily accessible database of programming content that viewers can tap into at will.

Interestingly, due the vagaries of contractual advertising, these programmes do not carry commercial breaks. So, from viewers being able to fast-forward through the ads on the old personal video recorders, they can now eliminate ads altogether by watching their favourite programmes on Catch Up.

I reckon that when the IPTV tsunami hits South Africa, MultiChoice will be ready, and those viewers who complain about the high cost of DStv subscriptions might just discover that they get what you pay for. It’s all very well getting unlimited programming for a paltry R150/month, but to make it efficient, one will have to pay at least R1 000 or more a month for enough high-speed data to make it all work.

Sure, DStv is perceived to be expensive right now. In fact, on a radio talk show this week it was suggested that “everyone in South Africa must believe that they are being taken for a ride with DStv’s cripplingly expensive subscriptions”.

Surprise, surprise when the majority of callers actually said they believed that they got good value.

It’s all relative, of course. Content is expensive, added to which TV channels will not be able to sustain covering these costs with traditional advertising revenue. It does not take rocket science to do the maths.

Quite apart from which, MultiChoice is doing nothing more than any other company operating in a free market economy.

There is no law prohibiting MultiChoice from charging the maximum the market will bear.

Right now, in spite of all the whinging and whining about subscriptions fees, the MultiChoice subscriber base is growing like Topsy.

MultiChoice's DStv Explora personal video recorder

MultiChoice’s DStv Explora personal video recorder

And those who complain about repeats should understand that this happens with just about every TV channel in the world simply because the producers of TV content cannot keep up with demand. There is not nearly enough content being produced to sustain 24-hour fresh content.

MultiChoice is an enormously successful company and in spite of allegations that it is monopolising TV programming, particularly sport, this is not their fault. All MultiChoice has been doing is being business-like and efficient.

Government needs to back off and rather concentrate on trying to rescue the SABC from its quagmire and Icasa from its doldrums.

And finally, government needs to understand that access to television programming, particularly sport, is not a human right.

Sport today is a business and not a charity.

Those who cannot afford to pay for it just have to live with the fact that not everyone can own a motor car, a home and watch sport on TV.

  • This column was first published by The Media Online. It is republished here with permission

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  • LeoN Nortje

    “Those who cannot afford to pay for it just have to live with the fact that not everyone can own a motor car or watch sport on TV”

    Seriously Techcentral, you support that statement ? So those who cannot afford bandwidth should just accept that not everyone can have internet? Those who cannot afford bread should just eat cake right ?

    It may not be Multichoice’s fault that bad legislation allowed them to become a monopoly, but it IS indeed government’s business to ensure healthy and competitive markets. And it surely IS the government’s business to ensure that their shareholders (the voters of South Africa) can afford to watch their own national sporting events by preventing monopoly pricing.

    While i agree that ensuring a competitive broadband market is even higher priority, your IPTV as a competitor argument is irrelevant – incumbent IPTV providers will be just as unable to broadcast Supersport content as would new entrants in the TV market.

    Forcing them to spin of Supersport as a separate entity that must provide fair, equal and open pricing to their content will level the playing field, not just for new entrants in the TV market but also for IPTV startups.

  • http://www.techcentral.co.za/ Duncan McLeod

    >Seriously Techcentral, you support that statement ?

    We seek and encourage a diversity of viewpoints in our columns section.

  • Greg Mahlknecht

    “Those who cannot afford bread should just eat cake right”

    Actually, I think he’s saying that those who can’t afford cake, must eat bread.

    Whenever this topic of sports broadcasting monopoly comes up, I wonder why Multichoice is the one that gets the finger pointed at them – surely the solution to this isn’t forcing Multichoice to resell what they’ve paid top dollar for, it’s to force the local sports guys to not enter exclusive contracts with any broadcaster? Of course, this severely cripples the bargaining power of the sports institutions and they’ll be the big losers in all of this. I’m not defending Multichoice, but that’s just how I see it happening.

  • herman

    “And it surely IS the government’s business to ensure that their shareholders (the voters of South Africa) can afford to watch their own national sporting events by preventing monopoly pricing.”

    So true!

  • zakes majola

    I agree with multichoice completely,government need to back off, there are far more serious matters that needs their attention, there must do what they do best corrupt the country

  • Davebee

    So this writer has the following attitude towards Multichoice and it’s carousel of ENDLESS REPEATS …(Note that he didn’t mention the 7 minute ads for DSTV every 20 minutes. odd hey?)
    “The rest of the Sat. TV stations do it, so what? Now shuddup and pay up.”
    As to the argument that there is simply not enough material out there, well obviously there isn’t going to be enough new material to broadcast if the likes of Multichoice can get away with endless showings of 1990’s cops ‘n robber shows at 1990’s prices while a docile viewing public should just accept things as they are.
    I’m surprised Moerdyk hasn’t advocated an extra public holiday in South Africa to be known as: Be thankful for DSTV, you contemptible little peasant customers.

  • Davebee

    I feel it should also be made clear to the pontificating Mr. Moerdyk who is obviously giving all us kids out there a jolly good TALKING TO with regard to us being less than eternally grateful with Bekker’s licence-to-print-money scheme known as DSTV that the major reason the public go to DSTV is the hideous alternative, namely SABC TV.
    Multichoice just lucked-out by and large as the local public are so darned starved of TV choice that they are virtually coerced into taking up a DSTV subscription!
    Every time I hear about about what a GREAT firm Naspers is I want to run out the room.
    Oh, yes take a look their Chinese connection while we are being lectured on their business acumen and their eternal bounty.

  • MuziMak

    What informs your “back off” call? Where in the world do you have unregulated television where near-monopolies run rough-shod over regulators and seek to write their own laws? You back off…now.

  • MuziMak

    “The ongoing spat between government and MultiChoice about the pay-television operator monopolising content…”

    Dear Chris, there is no such a spat, at least not yet. Serious as the content rights is it is a side issue for now. The real spat right now is government (Icasa) introducing regulations that will encourage sustainable competition in television after the 2008 licensing flop. Talk us on opening of competition, please.

  • Mark Williams

    It goes further Muzi,if government wants to use the system for closed user group broadcasting for internal communication they cannot do this with no encryption. Who says DSTV is always going to be the one and only pay tv broadcaster in SA.Their original terrestrial licence for one channel was issued by the P.W. Botha government in 1985.I remember it well!

  • Greg Mahlknecht

    If you’re going to use a system for internal confidential government communication, wouldn’t it be a better option to deploy your own decoders to that closed user group? The proposed standard, Nagravision, has been comprehensively hacked and certainly not suitable for such a task!

  • MuziMak

    They use bleeding edge technology in their boxes but promote the deployment of dumb boxes for the others. Cheek!

  • Johann Smith

    “…MultiChoice is in the strong position it is because it’s an exceptionally well-run company…” – Really?
    Multichoice is a bully. They do not have any consideration for the public and doesn’t listen to the public. Multichoice dishes repeat after repeat and promotes OLD movies as new movies. And all the way Koos Bekker & Co laughs all the way to the bank.
    Multichoice’s big problem is there seer arrogance.
    It’s time for them to come down to earth.

    If any other company would attempt to provide a similar service at a better rate, Multichoice would simply undermine that company.
    It is time that the government brings Multichoice down to earth!

  • Johann Smith

    Telkom…please sign a deal with NETFLIX!!

  • Coscos

    I think you
    are ill-informed about how Multichoice is been run so I think you should zip
    it, please find the facts before commenting, not personal but just the reality,
    many in the organisation they don’t know what they are doing put the
    competition against them and then comment please.

  • Johann Smith

    This is the ONLY fact:
    Multichoice is a bully

  • Coscos

    You have nailed
    it on the head and I hope many people see it that way. Nice comment, I totally agree and there is no
    truth better than that (Multichoice is a bully).

  • sagren reddy

    Supersports rights go beyond satellite. they own web rights too. This is the same with the World Cup in Brazil. You will not be able to stream content without a dstv account. I do not think Multichoice is too worried about the web.

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