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DStv, Netflix rivalry expected to filter through to Kenya, Nigeria

DStv, Netflix rivalry expected to filter through to Kenya, Nigeria

A claim by the CEO of MultiChoice South Africa that 100 000 DStv Premium subscribers cancelled their subscriptions over the last financial year in order to move to competitors like Netflix does not bode well for DStv's fortunes in the rest of Africa , according to one industry analyst.

Calvo Mawela made the statement at an inquiry into subscription television broadcasting services organised by the Independent Communications Authority of South Africa (ICASA) late last week.

Mawela said the regulator needs to consider MultiChoice's contribution through DStv to employment and tax revenue among others.

"Netflix will never employ a lot of people around the world like we have. It employs around 4000 people for the whole group," he said.

The 2017 MultiChoice social report shows the company made a total direct tax contribution of R3.3 billion and that 87% of its employees are black, while 51% are black women. The report also states that the company has a network of 1184 accredited installers across South Africa who employ close to 4500 people.

Arthur Goldstuck, Managing Director at World Wide Worx said, "Netflix will take off in markets where extensive fibre infrastructure is laid down. That suggests markets like Kenya and Nigeria will see relatively strong take-up. This will naturally eat into the premium bouquets. However, Nigeria is a core market for English Premier League live football coverage, and Netflix can't compete with MultiChoice's rights in that regard."

Goldstuck adds that the advent of Netflix is a great case study of not only in disruption, but also of the power of cloud platforms to change markets, business models and mindsets.

"Players in any industry that depends on digital or intangible assets should be taking note and deciding not only how to respond to disruption, but also how to leverage these same platforms to become the disruptors themselves," he said.

Goldstuck added that the hearings by ICASA is thirty years too late and that MultiChoice is making a necessary call for the Authority to relook the television market.

"Regulators typically comprise government-appointed bureaucrats, which typically renders them incapable of responding nimbly and quickly to rapid change in the technology and business environments. ICASA wants to regulate MultiChoice three decades into its market dominance at a time when the broadcast environment is shifting dramatically and rapidly to video on demand. This reinforces the MultiChoice view that the regulator is so focused on the rear-view mirror, it can't see the road ahead clearly. It may be aware of what's coming, but is traditionally only able to regulate what has been."

MultiChoice's stance regarding the industry regulator and its role may attract even more attention given the recent announcement by another industry competitor Kwesé of its long-term partnership with Netflix to extend the reach of Kwesé TV and Netflix combined offerings within Sub-Saharan Africa.

Joseph Hundah, Econet Media President and CEO indicated that Kwesé believes the African market will continue to grow at the announcement of the deal in last September.

"The number of connected homes in Africa continues to grow at an impressive rate and we expect to see strong uptake of Netflix in our markets. The current number of active subscribers is a fraction of what we both believe the potential to be. We see this as an opportunity to expand Kwesé's multi-platform offering while bringing the best in original general entertainment to households across the continent".

Kwesé is currently available in sixteen African countries including South Africa and Multichoice is present in 49 countries.

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