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    Home » News » MultiChoice entrenches its position

    MultiChoice entrenches its position

    By Editor29 July 2012
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    As the Zambezi River surged past in the background, destined to plummet 100m down the Victoria Falls a mere 15 minutes’ walk away, the Zambian government last week launched GOtv in Livingstone, the country’s fourth largest city.

    GOtv is MultiChoice Africa’s new offering, which plays in the digital terrestrial television space. It offers consumers a pay-TV terrestrial television package of between 16 and 26 channels for a monthly subscription of between R52 and R72, depending on the country.

    GOtv is operating in Zambia, Kenya, Nigeria, Uganda and Namibia. However, the presence of Angolan minister of social communication Carolina Cerqueira and Ghanaian information minister Fritz Baffour at the Livingstone launch suggests MultiChoice is also courting a number of other African countries to partner with, too.

    Stakeholders in the African broadcasting space are ­concerned that governments are in effect outsourcing the digital migration process to GOtv and that its domination of these migration processes amounts to market capture.

    Swimming upstream
    Are these African states selling their television consumers down the river and will regulators be battling to swim upstream when the need for real competition in the broadcasting space arises?

    GOtv was first launched in Lusaka, Zambia, in June last year. The launch offered consumers a set-top box as well as the first three months’ subscription for R663.

    After the three months, the service costs a monthly subscription of R60 for a bouquet of 20 channels, which includes five entertainment and movie channels, three news channels, three children’s channels, two music channels, one sports channel and the national broadcaster’s two channels, among others.

    The bouquets include well-known MultiChoice channels such as Africa Magic, SuperSport, Nickelodeon, Discovery World, BBC World News and Al Jazeera.

    For many Zambians, this is an embarrassment of riches in a country in which most households have access to only two public broadcaster channels and some only one.

    Relatively affordable
    Many Zambians, to whom the Mail & Guardian spoke after the Livingstone launch, suggested that the offering was relatively affordable and they would consider subscribing.

    Following the launch in Lusaka last year, there were launches in Kampala and Entebbe in Uganda in August, Nairobi in Kenya in September and Ibadan in Nigeria in October.

    In the first seven months of this year, GOtv has been launched in Windhoek, Namibia and three more Zambian cities, two more Nigerian cities and two more Kenyan cities.

    This takes its total presence to 13 sub-Saharan cities in just more than a year.  MultiChoice Africa chief executive Nico Meyer said the company planned to spend R2,5bn on GOtv’s expansion into the rest of Africa.

    MultiChoice Africa is mum on take-up figures, but with 38m households having television sets in sub-Saharan Africa, the launch of digital television in Africa is a huge opportunity.

    Size of the market
    A report titled “Digital TV Sub-Saharan Africa”, which was published by Digital TV Research in February, said 26% of Africa’s 148m households had television sets.

    The report said, by 2017, 50m households in Africa would have ­television sets. Nigeria would account for 25% and SA a further 15%.

    The report predicted that, by 2017, 43% of households would still be using an analogue television service.

    A report titled “African Broadcast and Film Markets”, released by broadcasting consultancy Balancing Act in February, stated that there were now 1 600 TV channels on the continent, of which 596 were free-to-air terrestrial channels.

    “The market leader — DStv MultiChoice — has gained more than 5m paid subscribers in sub-Saharan Africa,” said the report. “In January 2012, Balancing Act estimates the pay-TV market in Africa at 7,6m subscribers.”

    These figures give an idea of the size of the market in which MultiChoice is playing.

    In some of the countries where GOtv has launched, such as Uganda and Nigeria, the product has been launched with a GOtv and GOtv Plus offering.

    Effectively outsourcing
    In Uganda, consumers can select 21 channels for R61, or 29 channels for R116. In Nigeria they can opt for 26 channels for R52, or 33 channels for R78.

    Although the launch of GOtv in these five countries has significantly altered the local television landscape, not everyone is singing MultiChoice Africa’s praises.

    “These governments need to do the migration process,” said a player in the SA broadcasting sector, who spoke on condition of anonymity. “But they don’t have the capacity or the funds to fill all the multiplex space.”

    He said that the five governments were “effectively outsourcing” digital migration to MultiChoice Africa, which is well positioned with masses of content and an already developed presence in Africa.

    Many broadcasting players who spoke to the M&G this week made this point.

    A total of 1,44m households in Africa subscribe to MultiChoice’s DStv offerings, according to last year’s annual report of holding company Naspers. This excludes the 3,5m subscribers it has in SA. Of the 1,44m subscribers, 340 000 were signed up in the previous financial year, which represents a growth rate of 31%.

    Unregulated
    MultiChoice’s expansion into Africa is paying dividends and the launch of GOtv will strengthen its hand even further, providing it with a large customer base to which it can sell further content.

    Meyer said that once the analogue broadcasting services were switched off in 2015, the freed-up spectrum known as the “digital dividend” could result in further bouquets of channels being offered to consumers.

    “MultiChoice is no longer just entrenching their monopoly in the satellite market,” said an independent broadcasting consultant from the continent. “They are entrenching their monopoly in terrestrial television, too.

    “They have first-mover advantage now. It is because of its dominant position in SA that it has managed to gain a foothold in these countries in Africa.”

    A South African broadcasting consultant agreed. “MultiChoice Africa is effectively migrating everyone in these countries to a pay-TV offering,” he said. “These markets are generally unregulated and with MultiChoice controlling the set-top box they are in the pound seats.”  — (c) 2012 Mail & Guardian

    • Visit the Mail & Guardian Online, the smart news source


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