Pay TV's new contender - TechCentral

Pay TV’s new contender

[By Duncan McLeod]

SA ’s pay-TV market is hotting up with news last week that the country will get its first satellite-based video-on-demand service on 1 September. VOD:TV plans to offer a “subscription and transactional” system that could give DStv a run for its money.

For years, pay-TV in SA has been dominated by one company, MultiChoice, with its DStv service. That changed last year with the introduction of the first competitor to DStv in the form of On Digital Media’s TopTV, which has signed up more than 200 000 customers in its first year of operation.

But, unlike the telecommunications industry, where competition has flourished in recent years, there has been a distinct lack of choice in broadcasting. There’s no doubt that TopTV has sharpened MultiChoice’s game. The latter has been working hard to improve its range of channels, offering services to customers in the lower living standards measures and launching more high-definition (HD) channels to serve the high end of the market.

But a duopoly does not a truly competitive market make. So, news last week of a new player in the TV market is welcome. VOD:TV is being launched by telecoms entrepreneur Oscar Dube through his company SouthTel Group. For “no more than” R200/month, subscribers will be able to receive HD and standard-definition content delivered to a personal video recorder (PVR).

But this isn’t traditional broadcasting. Rather, VOD:TV is introducing the country’s first video-on-demand subscription service, delivering updated content to the PVR on a weekly basis, including the latest movies and TV shows.

About half of the content will be viewable as part of the monthly subscription fee. The rest, which will include the latest Hollywood blockbusters before they are broadcast on traditional pay-TV networks, will be available for rent. Much like one would hire a DVD from a video store — but without the inconvenience of driving there — consumers will pay a small fee (perhaps up to R40) to unlock a movie for a few days.

Dube says VOD:TV is meant to complement rather than compete with DStv, but many consumers may consider this as an alternative. Certainly, those who don’t watch live sports — a market MultiChoice has sewn up — may find this an appealing option, provided VOD:TV can secure access to the best shows and movies.

Of course, MultiChoice isn’t sitting still. It’s strongly rumoured to be introducing a transactional video-on-demand service of its own — probably to be called Box Office — later this year.

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VOD:TV is certainly talking the right game. It has signed content agreements with Hollywood’s six biggest studios and has secured investment from France’s Logiways, a spin-off of that country’s pay-TV giant, Canal+.

Dube explains that VOD:TV’s PVR, made by Germany’s TechnoTrend Görler, will be a converged device, allowing consumers to surf the Internet, watch YouTube videos, access Facebook and chat on instant messaging applications on their TVs. The box will have an Ethernet port to hook up a fixed-line broadband connection, and an active USB port so subscribers can plug in a 3G dongle from one of the mobile operators.

Interestingly, the box is upgradeable to digital terrestrial television. This means that when the country converts to digital — expected by the end of 2013 — the PVR will be able to receive and, more importantly, record the wide array of free-to-air channels that are expected to be on offer after the switchover.

VOD:TV thinks the market is big enough to sign up more than 5m subscribers within five to eight years. That sounds optimistic, but there’s little doubt that a video-on-demand player is going to make the competitive dynamics that much more interesting.

13 Comments

  1. Anything that boosts competition is welcome, but how long will VOD:TV (or DSTV for that matter) be able to compete with online content? There are stacks of internet sites where I can stream or download the latest international movies and TV series legally, for free, on the day they are released in the US. I just need to hook up my TV to my home PC, and costs are controlled using my unlimited data package.

    More local content would be one way to increase the relevance of the VOD:TV package, but content creation is expensive and can probably only be funded with income from international content – Catch 22!

  2. Gavin, from what I’ve read to date, it will utilise under-utilised bandwidth from a satelite provider, so like TopTV & DSTV it will be satelite based.

  3. @Gavin: No, you idiot! It’s a sattelite service! You CAN plug in a 3G dongle IF YOU WANT TO, to be able to access the internet as well…sheesh…

  4. So they believe they will have 5million subscribers within 5 – 8 years. Currently there are maybe 9 million TV households in SA, of that MultiChoice has about 2.5m. Of the remaining 6.5m, the majority consists of low income households with little disposable income for entertainment services.
    And to get this VOD service I must pay R200 pm for content that is probably second rate, and then another R40 for every blockbuster or current TV series that I want to unlock. And there is no sport.
    I can’t find a compelling reason for a MC subscriber to switch to this service as it is only MC (and maybe TOPTV) subscribers that would be able to afford it.
    I think someone is smoking their socks.

  5. As Basil Fawlty said: “More Rubbish!”

    The latest movies and series free?-Legally? Streaming?I don’t think so.

    Under-utilised bandwidth?-The satellite providers have spare
    capacity,but it costs plenty and they have invested upfront in the hope that someone will buy into their delivery system.

    Mr. Dube? Chris is correct,just another of the big talkers-there is no chance of him signing up 5M.Not even five hundred thousand or even fifty thousand.
    He would be better off equipping taxis with projectors and screens and showing the latest blockbusters on some under serviced street corner.

    Smoking your socks produces pleasant hallucinations-Dube is mainlining on ego and bulldust and hoping to make a quick killing from the gullible.

    Duncan,how about some critical hard hitting incisive tech journalism instead of puff pieces on fantasy?

  6. Any idea how much the VOD:TV’s PVR will cost? Is it Wi-Fi enabled? Does it operate on both 900 and 2.1MHz frequencies? Can i bypass the R200 monthly charge to simply pay R40 to satisfy my appetite for the latest blockbuster or TV series?

  7. I just want this service on Xbox live, according to their explantion if the service is similar to what netflix is doing then you might only pay for what you use.

    Make it available on Xbox live, Xbox live, Xbox live, Xbox Xbox live please

  8. @ticia: PVR costs $200. Wi-Fi not supported. The device accepts a 3G dongle, so the frequency question is moot. It doesn’t have an integrated 3G chip.

  9. Can’t wait for Multichoice to have proper competition so we don’t have to pay more than R300pm.

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