MultiChoice (South Africa) Under Pressure As DStv Platform Struggles - Looks To Cut Jobs
Up to 200 employees face the risk of losing their jobs at Multichoice, South Africa due to the effects of increased competition in the video entertainment industry.
The Sunday Times (a leading South African newspaper) reports that South Africa’s leading video entertainment and internet company has requested that numerous employees reapply for their positions.
The spokesperson for Multichoice told the Sunday Times that the company is in the process of creating a leaner and more active corporation so that they remain globally competitive.
In recent times DStv’s Premium service option has seen a decline in subscriptions, and this has been a cause for great concern amongst many of MultiChoice’s employees who as a result find themselves in a position where they could soon be facing unemployment.
Over the past financial year, MultiChoice says it has lost a staggering 41,000 Premium subscribers. Though the lower level DStv packages have seen an increase in subscriptions it serves as no consolation because they do not bring in near as much revenue as the Premium option does.
The increased competition brought by entities such as Amazon Prime and Netflix has contributed significantly to the problems that MultiChoice is currently facing because subscribers who previously did not have any alternative to MultiChoice now suddenly found new, attractive options and opted out of their DStv Premium subscriptions. Before the introduction of streaming services such as Netflix, MultiChoice didn’t have much competition in South Africa.
The overwhelming success of Netflix has posed a threat to MultiChoice’s business with a recent survey by MyBroadband proving Netflix to be the new favourite entertainment service in South Africa by a long shot ahead of DStv. 9,857 readers took the study.
Calvo Mawela, CEO of MultiChoice SA blames Netflix for MultiChoice’s loss of subscribers and has said that Netflix does has an unfair advantage over DStv in South Africa because they do not have to adhere by affirmative action regulations and by other South African policies such as Black Economic Empowerment.
Mawela says that although MultiChoice is not blind to the fact that times have changed and that people are more attracted to watching online content, Netflix isn’t playing on the same level field.
MultiChoice says that the only way to resolve the problem is for a regulatory change to occur and for Netflix to pay taxes in South Africa and also follow the same local broadcast regulations, which DStv abides by.