Streaming video, including video on demand, is the future of television, but it’s not necessarily a better business model than traditional, satellite-based pay TV.
That’s the view of DStv Digital Media head Graeme Cumming, who told journalists at a media event on Wednesday that DStv parent MultiChoice is preparing for a future where the world pivots to streaming technologies. But he doesn’t believe satellite TV is going to go away anytime soon either, especially in a market where broadband penetration remains underdeveloped.
“History will show us that satellite TV [has the better business model]. Satellite delivery of content is the most efficient way of delivering content to a mass [audience],” he said.
“But let me qualify that: what I’m saying is that over-the-top delivery (streaming) is definitely the way of the future. Whether it’s a better business, whether there’s more margin in it, whether it’s a sustainable business, I think that is the argument [to be had].”
He said satellite is without doubt a more efficient mechanism than the Internet for video content delivery. “The world is moving to [streaming], and that’s where we need to move, too, and that is what we’re planning to do. We are putting down the platform to allow us to compete in that world. But, let’s be honest about it: it is a less efficient way of delivering content.
“Every incremental user we deliver [streaming] content to, there’s incremental storage costs and delivery costs. That’s where you get into things like clever peering and content delivery networks. It’s a more complicated distribution model in the long term. In satellite, there’s lots of upfront investment, but thereafter it’s very efficient.”
Both models are likely to coexist, Cumming said. “The balance will swing [to streaming] over time, but both will always exist.”
DStv has launched a number of online streaming services, including DStv Now, which offers its linear channels on the Web. It also delivers live sports through its SuperSport smartphone app and offers DStv Catch Up video-on-demand content online.
Its parent company, JSE-listed media and e-commerce giant Naspers, has moved early to try to see off the threat to DStv of international VOD providers such as Netflix and Amazon Prime Video by launching ShowMax. ShowMax and MultiChoice are working closely to integrate their services, such as offering ShowMax VOD content on Internet-connected DStv Explora personal video recorder decoders.
Cumming said an immediate challenge — and opportunity — is figuring out how to offer the growing range of competing VOD and live-streaming services on a single platform.
“Many of these services are complementary to pay TV, so you’d have your DStv and maybe a Netflix or a ShowMax. You’ve seen this play out in the US and UK already: people are spending incrementally slightly more to get all the various titles that they want.
“But that in turn brings inconvenience, because I’m signing out of this service and signing into that service, switching that HDMI cable to my Apple TV, or going to my Xbox, or switching back to my TV,” he said.
“So, the next problem to be solved is how to aggregate all of those services. How do I serve everyone’s needs, with all the subscriptions they want to sign into, but with a unified interface with unified search, unified content discovery, a unified remote, all voice driven, and without them having to pay multiple providers?” — © 2016 NewsCentral Media
