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MultiChoice CEO calls for online streaming to be regulated in SA

Calvo Mawela says Icasa must take a lead from the EU and level the playing field.

NOMPU SIZIBA:  MultiChoice has admitted that internet streaming services like those provided by Netflix categorised as over-the-top will fundamentally disrupt services provided by pay-tv players like MultiChoice. It says that Netflix added more subscribers in the last quarter than MultiChoice had approved since starting over 20 years ago. In addition, Netflix’s recent capex – or capital expenditure – stood at $8 billion for just one year. A difficult opponent to contend with.

So on the line I have MultiChoice’s CEO Calvo Mawela. Thanks for joining us, Mr Mawela. That’s a very tall order to have to deal with. Just tell us how you feel at the moment about the likes of Netflix and Google’s YouTube disrupting players like yourself.

CALVO MAWELA:  Good evening, and good evening to your listeners, Nompu. I think let me just put into context what our position is as far as the over-the-top players are concerned. We embrace them, they are bringing new technology to the fore, they are bringing choice to the consumer.

We have to compete with them in the market and we are doing our best as MultiChoice, as you have seen. We launched Showmax a few years ago. We are investing a lot into it so that we can compete with the likes of Netflix, Facebook, Google and so forth. That is our policy. We embrace competition and we are ready for the new technological change that is coming with online players coming the market, and we are ready to compete with them toe-to-toe.

So there is no question about whether we are ready to compete or we don’t want Netflix to exist in this country. We think they bring competition, they push us to innovate and do much better in the interests of the consumer, and competition always ensures that the consumer benefits at the end of the day. So we are ready to compete. There is no question about that.

NOMPU SIZIBA:  That sounds very positive. You mentioned your partnership with Showmax. Just tell us a little bit about how successful that’s been and what kind of uptake you’ve had from your customers.

CALVO MAWELA:  We are saying in terms of our research – and remember, these are estimates from our strategy division looking at how Netflix is performing vis-à-vis – we think we are competing at almost the same rate. However, let me take you through the issues that we have raised as far as competition is concerned. It has brought about the inquiry that Icasa has started doing.

Icasa has narrowly defined an inquiry into competition to look at competition to the old, traditional pay-tv. We think that is a debate that we should have had 16 years ago. That debate is no longer applicable in this era because we have got a lot of online players that are in the market that are able to launch audio-visual services.

So launching a similar TV type of service is like launching an app these days. You don’t need infrastructure. You can ride on top of somebody’s infrastructure. And we are saying to Icasa do not look at traditional TV as it used to be. Look at the whole audio-visual sector, include the likes of Netflix and how they impact on competition in the market because we are seeing a fundamental shift in viewing habits in terms of how people consume content.

People are moving to online and hence we have also launched Showmax, which is competing very well with Netflix. We are aware that Netflix has a much bigger reach and a much bigger budget, but we are not folding our arms and saying these are global giants that are coming in, and they are going to eat us for lunch. We are competing with them.

What we are arguing for, however, is we are saying to Icasa look at the bigger picture. If Netflix is able to come to the country, launch a service and not be required to register in this country, not required to pay any VAT, not required to pay any income tax, not required to observe local content quotas that you apply to the television, we think that the playing field is not level.

What you need to do is do is what the EU has already done, shown through gradual regulation of all online players. And we are not asking for regulation in the traditional way that was done in the past with pay-television. You can push them to register in the country, you can push them to register for VAT, so that they pay VAT. You can push them to register a business so that the income tax gets paid. You can push them to do local content because it helps in creating jobs, creating local production. The audio-visual sector is one sector that speaks to culture, speaks to language, and helps preserve our own culture and our language inasmuch as competition enters the market.

Those are among the few things that the EU has managed to put regulations on, in terms of the online players, making sure that the population of the EU doesn’t end up consuming only what comes from the US, but they also build an industry in the EU. The same thing can be done here. We don’t see why not.

NOMPU SIZIBA:  I suppose we would have to speak to Icasa to ask them about some of the issues that you’ve raised. But, in your engagements with them, have they indicated they are going to be looking at issues like this?

CALVO MAWELA:  The discussion document that they published in the first instance was only a paragraph that speaks to over-the-top players as though they were saying, yeah, we think they are there, but they are on the horizon and we don’t even see what kind of product this is, and therefore they do not matter.

What we are seeing, as people that are in this business on a day-to-day basis, we are seeing a big shift of people in terms of their viewing habits. People are moving on much quicker. We are seeing a decline in our subscribers from Premium, which shows that they are moving to online consumption of content.

So gone are those days of appointment viewing where I will tell you, Nompu, that at seven o’clock they are going to watch X, and turnaround eight o’clock they are going to watch Y. People want to decide what to watch at whatever time is convenient to them. I’m sure you do the same with Catch Up and all our content, as to when you feel like watching that particular content instead of appointment viewing.

So that is a shift and that’s why people have moved online. We are saying to Icasa, look at this. What the discussion document failed to appreciate is the extent of the proliferation of the likes of Netflix, and we shared with them an example of what they’ve been doing. I mean, we saw a cheeky Netflix advert coming through a helicopter that was circulating around Randburg, on top of our building, with a Netflix banner. That shows that Netflix is here. We’ve seen billboards going up in Sandton that say Netflix is here. We have seen Netflix making pronouncements that they are going to invest in content production in the country. So they are here, they are challenging us in our business on a day-to-day basis, and yet they do not have to comply with any of the regulations the country has made. Take a lead from the EU and put these regulations in place – in that way you’ll level the playing field, we can argue.

NOMPU SIZIBA:  I was going to say your critique does sound fair. But while you are waiting for the regulator to come to the party and level the playing field, as you say, what can you do in the meantime? Of course, you have the Showmax gig going on, but what else can you do because this is massive disruption? You are seeing numbers falling with people switching out and so on. There is a complaint about DStv showing too many repeats. How can you change your content or your business model, and is you business model under threat?

CALVO MAWELA:  Ja, that’s what keeps me awake at night as the CEO of this company – that if we are not careful we’ll follow the same route as many other industries that faced disruption by a new technology that is advanced. We can take a lead from the newspapers. We thought that the newspapers would be here for longer. Today everybody is consuming news online through Twitter, Facebook and all other means. The same thing is going to apply to us. People are voting with their purse and they are saying they are not going to follow the old traditional way. That’s why we are investing in Showmax, that’s why we have launched DStv Now. That’s why we have got Catch Up, we have got Box Office, so that we are able to adapt towards what the viewer behaviour is showing us.

So there is a lot of investment that we are going into, and we are trying to improve our service offering through focused groups, and through engagement with our customers to improve our service offering. That is along the way, as you know.

And this business has shown over the years that through innovation we are able to come up with the best technological advancements to make sure that we bring value to our customers. That we will continue to do, and that’s why we are saying we are not folding our arms. We know the future is online. We’ve got big giants that are going to challenge us, and we are doing everything in or power to make sure that we are ready for that challenge and able to deliver good customer service – if not better than the likes of Netflix and Facebook.

NOMPU SIZIBA:  Alright. Well, we’ll try and get the regulator at Icasa on the line to try and speak to some of the points that you’ve raised and all the very best. Thank you very much for your time.

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Goodbye multichoice. Good riddance. Rip offs.

There seems to be a lot of people that agree.

They should rather cut their losses now and exit while they can or else loose a fortune more down the road. We all can see which way all this is going. Why havent they ask ICASA to regulate youtube. Lots of people are spending time there as well and lots of local companies are paying advertising space on youtube.

The South African public is already super regulated.

We pay for TV licences even when we never watch any of the SABC TV channels,
what else must we pay for?

Finally we have more choices and competition.

So NoChoice wants to run to daddy because Netflix has better toys??

How about dumping satellite TV and go for a full OTT like Netflix? This is dead tech as more homes get fibre so none of this: dish, installer, decoder, too many cables.
Showmax could have been a contender for OTT in SA but alas NoChoice just moans

What a crook and an idiot! Maybe he should move to China! Happy to rip people off for years and then squeal like the pig he is when he has the first sign of commercial competition. This CEO is a joke!! Regulation like he suggests is only BAD for the country and growth. Fire him somebody please!!

Ag shampies NoChoice – maybe if you hadn’t been paying the Gupta’s R150m a month for their propaganda channel you would have more resources to compete instead of whining about loosing your monopoly..

LOL

Icasa actually stands for I Cannot Answer Serious Allegations.

These guys belong in the 60’s – Remember the Egg Board??? – Ja probably not!

They want to regulate things they do not understand and yet the serious crimes (well regulated) go unpunished as they do not have any clue on how to police/prosecute and convict!!!!

I can’t believe him, that is

“We embrace them, they are bringing new technology to the fore, they are bringing choice to the consumer…………….We embrace competition ………………..and we are ready to compete with them toe-to-toe.
………….they push us to innovate and do much better in the interests of the consumer, and competition always ensures that the consumer benefits at the end of the day.”

Then why all the whining, I think he means that us as the consumer must just pay more because once we had all this regulation in it means that have reasons to rip us off again.

“MultiChoice CEO calls for online streaming to be regulated in SA” Really?

So let me get this, when a purely capitalist venture is losing ‘business’ to streaming then suddenly government regulation becomes good business!!!

WTF you got to love capitalist hypocrisy Hahaha

Nonsense.

Multichoice has never been a ‘purely capitalist venture’. It has always been either an enforced or virtual monopoly.

From Wikipedia : In 1986, South African mass media company Naspers – a leading supporter of the Apartheid Afrikaner Nationalist Party – (along with several other South African media companies) formed the entertainment entity known as M-Net.” “Naspers through M-Net was given a monopoly of broadcasting satellite TV in South Africa”

This was continued under the ANC. Only in the last 5 years have other companies been allowed to broadcast satellite feed.

Big business like Multichoice abhors competition and free markets.

They thrive under authoritarian, socialist, red tape bureacratic governments like the old National Party and the ANC.

Ok more credit to crooked monopolistic capitalist or socialism?

With this analogy from the past, Naspers, SASOL, Mittal or the majority of the JSE is a monopolistic socialist venture created by government!!!
and now just to be enjoyed by capitalists..

If the stupid numpty said Torrent sites should be regulated perhaps he would have a leg to stand on but he’s just exposed himself legless.

Regulation, schmegulation.

I argue that in five years’ time there will not e satellite dish sold. the only dishes seen will be rusting relics. Everything will be on fibre, web-connected and download on demand, and so will by default be totally open access. No more satellites, no more dishes.

Best of all, ICASA will disappear because the is no need to control EM spectrum , it’ll all be on fibre.

Run Home and hide behind Mommy’s skirts bully boy.

You get no sympathy from me.

So you want things regulated like in the EU? Then using the same argument maybe the regulations should include the elimination of monopolistic condition too. In the EU mainly cable services are used and the big difference is that they are allowed to use the same content. I guess Multichoice would squeal even more if the were forced to allow competing satellite services to carry the same channels as them.

“That’s why we have Showamax [which only premium get for FREE]; DSTV Now and DSTV catch-up”. If you aren’t subscribed to premium you get NOTHING FOR NOTHING. Multichoice – goodbye to bad rubbish. Promises, promises which have come to nothing – your words: “we’re looking at the possibility of subscribers paying only for channels watched” [2017]. One year on and the subscribers have had it with being ripped-off. Upon receipt of your letter announcing the new “increases” for 2018, letter received on Sunday 18/2/2018 no less, I’ve responded making it very clear that you’ll regret this and within 5 minutes of the e-mail sent I was called by Multichoice to explain my opinions. Listen to your recordings of calls: It’ll confirm that I’ve also told you that you think that it’ll be business as usual, but premium clients will cancel, you’ve not increased the numbers of subscribers due to your own misguidance, that VAT is to be increased on 21/2/2018 – the latter especially was questioned by caller of Multichoice: It’s was clear as daylight January 2018 what Government was about to do to the public – increase the VAT, etc, etc. Multichoice had dug their own grave. The only option: One subscription, all channels and additions for a much lower fee than the existing R980,00.

Mutichoice brand is on the back foot. Just like KPMG. Whatever offerings you put out, will be looked at with skepticism. Remember dominant forces that fell viz., RixiTaxi, Blackberry and Nokia.

Digital is the key. Allow subscribers total choice of what they want to see. Movies, sport and documentaries.

The primary school bully complaining that he cant bully when he gets to high school. Multi choice is a complete rip off and clearly a sore loser.

All these comments and yet you all continue to support the Naspers bullshit share price – weird!

Not me Mac. Honestly no Vodacom, MTN, SASOL or Naspers; on principal. I did slip with Steinhoff (ha ha). And PPC. Made a decision to switch the shares I personally buy and sell to rand hedge types – Mondi maybe (eeeek Cyril is a shareholder so he should look after them), Richemont (cheap now??) and so on. The ZAR not co operating though; R12,75 to USD as I type in terms of actually getting money out.

What, Multichoice is already whining like this and they are not even competing against the full Netflix library yet??? Get ready to be creamed Calvo!

Boo hoo hoo… they aren’t innovative enough to create a competitive product or pricing so now they run to daddy! Why not create a pay-per-view offering for Supersport? Oh no wait, they can’t, it is the only stranglehold they have on the poor, battered and overcharged DSTv subscriber!

What a moron, with conflicting statements.

Please explain exactly why Netflix must pay tax here?

We are using an american company’s User Interface and intellectual property (that is 1,000,000 times better than showmax too), they do not employ anyone in SA, and we are watching mostly US/UK content. So please explain why we must pay tax for a service that is essentially being derived overseas? We already pay for our internet, too. If the movie is South Africa, then the royalties go to the respective studios.

Multichoice are losing subscribers because their entire offering is outdated. Make the DSTV offering over internet at half your current ridiculous price and people will sign up again! And Let people get sports only packages. But your current business model isn’t working, so you want to change legislation to suit your business. F Off.

Those who refuse to adapt will die.

You may survive if you allow us to choose the channels we want to watch and don’t say it can’t be done. Don’t package garbage and ask us to pay for all channels when we just like a few. As you choose from a supermarket store, let us custom make our own bouquets.

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