Icasa plans to interrupt the DStv monopoly



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Johannesburg – The Icasa Independent Communications Authority is considering plans to interrupt the DStv monopoly by halving the number of Hollywood studios, which can include exclusive deals and the separation of sports rights.

This happens when Icasa published this week's draft findings on competition in the pay-TV market.

But Multichoice called on Icasa to stop all plans that would be regulated, and warned that if Icasa continues with several regulations, it will ruin DStva's business and hand over the South African market to online giants.

MultiChoice claims to have lost more than 100,000 DStv Premium subscribers over the last financial year due to the "unregulated" competition it faces with over over top (OTT) bandwidth services such as Netflix.

"We have been working with Icasa all the time to not be sure that there is a basis for intervention in a dynamic and rapidly evolving video entertainment sector," said Joe Heshu, executive director of the MultiChoice Group: Corporate Affairs.

According to MultiChoice, Netflix and other international transmission companies in South Africa do not pay taxes and do not contribute levies to authorities such as the Agency for the Development and Diversity of Media or Universal Service and Access Agency SA, nor are they paying a license for broadcasting. fees.

MultiChoice also claimed that Icasi should not pass through the rules and that, wherever it is implemented, it should apply to the entire pay-TV sector, including services such as Netflix.

"Our understanding is that this is a continuous inquiry, which will follow an extensive process of stakeholder consultation, including public hearings," Heshu said.

"We review draft conclusions and we will continue to work constructively with Icasa in its process to persuade the legislator to ensure that his final findings are evidence-based, balanced, informed and contribute positively to the growth of the video entertainment industry."

Icasa said that it was found that MultiChoice has significant power in markets characterized by inefficient competition.

"Taking into account the impact of OTT services, Icasa found that these services are expanding in terms of the number of new entrants and the volume of business, in particular international video providers on demand.

"However, it was found that the OTT effect was reduced due to limited access to broadband and / or Internet services, the perceived high cost of data and the low speed of the Internet."

In his draft report, Icasa said he believes access to Hollywood films is a competitive advantage.

"It can be difficult for new entrants to penetrate the market without such access. As such, the Authority will limit the number of Hollywood studies so that a player can enter into exclusive agreements for the distribution of films. "

The rights of sport should also be separate.

"Although the South African market may be different from the European market, the Authority believes it would be useful to consider the potential experience of the European market.

"The separation of sports rights involves offering rights to more than one customer, which usually provides rights on various platforms, such as subscription and mobile TV and, for example, OTT.

"Judicial authorities with separate sports rights in separate packages include Brazil and the wider European market."

"It should be noted that in the South African context, the PSL winner also acquires the rights to other distribution channels, such as mobile and the Internet. There is no reason why it would be so. "

On top films and series, he said that Hollywood films were released over a period of time.

"Free broadcasters and OTT service providers can not compete with television subscribers for such films due to the terms and conditions of their publication.

"In addition, rights are sold for a specific territory, thereby preventing other subscribers from transmitting the same rights in the same geographical area.

"Competition for top films also increases the cost of their purchase, especially the first films from the windows."

In addition to the emergence of legitimate OTT providers, piracy is on the rise and poses a major threat to traditional pay TV services.

"For example, MultiChoice estimates that over 2 million people see pirated movies available on DStv in South Africa.

"Piracy is a further competitive pressure on pay-TV services in South Africa," Icasa said.

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