MultiChoice: Netflix, Apple pose ‘real threat’

MultiChoice CEO Imtiaz Patel says online streaming services offered by Apple, Google, Netflix and others pose a “real threat” to DStv. By Duncan McLeod.

Imtiaz Patel

Imtiaz Patel

Netflix, Apple, Google and other online streaming video providers are the real threat to MultiChoice in South Africa’s subscription broadcasting industry, the pay-television operator’s CEO says.

Imtiaz Patel, who heads up MultiChoice South Africa Group, tells TechCentral that while his company and rival e.tv are locked in a high-stakes battle over the use of encryption in free-to-air digital terrestrial television, big international competitors are plotting their entry in South Africa.

“The barriers to entry to them are, like, nothing,” Patel says, adding that Telkom is already in talks with a view to bringing one or more of these companies into the country.

These companies represent “the real threat” to MultiChoice, he says. “There are already 200 000 Apple TV boxes in this country.”

He claims international content players “don’t pay tax” in South Africa, but says they are “big gorillas” who can afford to compete aggressively with local companies. “The department of communications has not fully accepted and understood what this threat really means,” he says. “If you lock yourself in with set-top box control, these guys will get an even bigger leg-up.”

Patel was responding to a question on how the department of communications should go about promoting greater competition in South Africa’s television broadcasting industry if not by using an encryption system in the set-top boxes that government intends subsidising for up to 5m households.

E.tv has argued that a control system is needed to allow a strong free-to-air broadcasting sector. It says such a system is necessary, among other things, to allow free-to-air players access to more modern and high-quality content from Hollywood and elsewhere.

Netflix is a real threat, says Imtiaz Patel

Netflix is a real threat, says Imtiaz Patel

MultiChoice, which owns DStv, M-Net and SuperSport, is vehemently opposed to the idea, however, warning it would amount to an unfair subsidy of its rivals. It argues, too, that a control system would be difficult to implement and would ultimately harm consumers. It took the fight to the court of public opinion at the weekend, with newspaper advertisements taking on communications minister Yunus Carrim directly on the issue.

That ads drew a sharp response from Carrim, who labelled MultiChoice a bullying monopoly.

But Patel says MultiChoice is already facing growing competitive threats, and not only from online streaming companies. “StarTimes has just taken over TopTV. They [StarTimes] are a formidable competitor to us on the rest of the continent,” he says. StarTimes recently acquired a 20% stake in On Digital Media, the company, currently in business rescue, that owns StarSat (known as TopTV until late last year).

“TopTV did exceptionally well in its first two years, before it made some very silly commercial decisions,” says Patel.

He claims MultiChoice would like a strong competitor. “It would be much easier for us, because everyone would get off our back,” he says. “It’s sad that people are demonising us when we have been more than a just citizen.”

On suggestions that SuperSport should be unbundled in some way from MultiChoice to facilitate competition, Patel says it’s far from clear if such intervention would benefit consumers.

Also, he says, SuperSport is “the major funder of South African rugby, for the Premier Soccer League, for all the major African leagues”.

“They have benefited more than fairly over the years, in an environment with a so-called monopoly. We are a good partner to sport, to industry and to government.”  — (c) 2014 NewsCentral Media

Share this article

  • ds

    “We are a good partner to sport, to industry and to government.”

    Yes, you are a good partner to everyone — except those consumers who’d like to watch just about any sport (besides soccer) and don’t have R700-800 per month burning a hole in their pockets. I’m guessing that’s a fairly large proportion of the country.

  • Kevin Rheeder

    The only reason people have dstv is for the sport.
    The packages are expensive and not worth the money.
    I’ll stick to sport highlights and getting netflix,hulu etc for a fraction of the price thank you.
    Make Supersport 1 and 2 available on the other bouquets as well and ur customer base will pick up. Or even better, let customers decide which channels they want to have. So many options but greed always wins

  • Ali Jawad

    Add to that that you can actually get Netflix anywhere in the world, all regions in one subscription using VPN and Smart DNS ..things dont look nice for Dstv ..see http://thevpn.guru/vpn-vs-smart-dns-proxy-unblock-location/

  • HSteel

    Why can Multichoice not offer its users a pay-per-channel option? Why do people have to pay for scores of channels they never watch? This, Mr. Patel, is why people are turning to other providers.

  • Greg Mahlknecht

    In my experience with the people I know, half is for sport, half is for kiddies programming – like sports, there’s pretty much no viable alternative to DSTV in ZA for kiddies TV (Netflix, etc included).

  • Ofentse Letsholo

    Yeah right Multichoice

  • Vusumuzi Sibiya

    >> “The department of communications has not fully accepted and understood what this threat really means,” he says. “If you lock yourself in with set-top box control, these guys will get an even bigger leg-up.”

    The DoC has been without real leadership for the better part of our 20 years of democracy and this needs to change urgently. There was a time, over a decade ago when I was really excited about the prospects of DTT but with what’s been happening… or more accurately “what’s NOT been happening” the other online opportunities available have proven to be more viable.

    Even in a market like SA where the consumer is conditioned more to preserving data, given the costs, the online content which I’ve experimented with; and which targets the masses with most of it in Zulu, has done amazingly well – 32% of a YouTube audience viewership of 7.4million is from within SA and that is very encouraging… so one could most definitely seriously look at online opportunities.

    My feeling is that the government has missed the boat on what would’ve been a potentially good empowerment opportunity with all the delays that have occurred around DTT and by the time they get going with this, one will be able to offer the masses an affordable Chromecast bundle from a telco that will give them access to even more content than what they are already consuming on the experimental online channels.

  • John Mitchell

    Don’t worry, their time has come. Soon we’ll be rid of them :D

  • John Mitchell

    Multichoice should be renamed to Lackofchoice. OTT is here and here to stay and thank goodness too!

  • Vusumuzi Sibiya

    They do own the rights to some very good content but I would agree that the offering is at present served with a “Lackofchoice” and OTT will be the BIG differentiator if they don’t look at a model that will give the consumer better selection when it comes to the channels they want to pay for.

  • Mark Tasco

    Just a matter of time for the death of DSTV, streaming is the future!!!!

  • HAHA

    Oh how the mighty have fallen. Atleast they’re not shouting we’ll sue anyone watching netflix like the last olympics on youtube. Whither and die monochoice!

  • Commodore

    “but says they are “big gorillas” who can afford to compete aggressively with local companies” – well that’s funny given that Multichoice has been the “big gorilla” for some time…. I’m glad there is now an even bigger gorilla to challenge you!

Why TechCentral?

We know that as a prospective advertiser, you are spoilt for choice. Our job is to demonstrate why TechCentral delivers the best return for your advertising spend.

TechCentral is South Africa’s online technology news leader. We don’t say that lightly. We believe we produce the country’s best and most insightful online tech news aimed at industry professionals and those interested in the fast-changing world of technology.

We provide news, reviews and comment, without fear or favour, that is of direct relevance to our fast-expanding audience. Proportionately, we provide the largest local audience of all technology-focused online publishers.

We do not constantly regurgitate press releases to draw in search engine traffic — we believe websites that do so are doing their readers and advertisers a disservice. Nor do we sell “editorial features”, offer advertising “press offices” or rely on online bulletin-board forums of questionable value to advertisers to bolster our traffic.

TechCentral, which is edited and written by award-winning South African journalists, cares about delivering top-quality content to draw in the business and consumer readers that are of most interest to technology advertisers.

We’d like the opportunity to demonstrate the value of directing a portion of your advertising budget to TechCentral, whether your company is in the technology field or not. Numerous opportunities exist for companies interested in reaching our audience of key decision-makers in South Africa’s dynamic information and communications technology sector. We offer packages that will deliver among the best returns on investment available in the online technology news space.

For more information about advertising opportunities, and how your organisation can benefit by publicising itself on TechCentral, please call us on 011-792-0449 during office hours. Or send us an e-mail and ask for our latest rate card and brochure.