Broadcasting Services

Multichoice Refutes Pay-TV Monopoly Claims; South African Inquiry Hears

Pay-TV giant Multichoice has denied allegations of its monopoly over the market, the Independent Communications Authority of South Africa (ICASA) heard during its public hearings last week.
The hearings held between 12-15 January were part of the regulatory authority's investigation into competition in the pay-TV sector.

This inquiry, which started in 2016, was established to determine competition issues in the subscription-television broadcasting sector, which has seen slow growth since 2007.

In a 2017 discussion document, Icasa described the pay-TV market as highly concentrated, with little contestability. The reason for all of this was said to be high barriers to entry, brand loyalty and increased customer switching costs.

In 2019, after engagements with various stakeholders, Icasa published its preliminary findings on the matter. This process's conclusions found that MultiChoice, Africa's largest pay-TV operator, held significant market power, which the authority considers harm to competition.

In response to these findings, MultiChoice denied it had created barriers to entry in the pay-TV industry. The pay-TV said Icasa's conclusions "do not reflect a balanced, fair and robust analysis of the evidence provided to it in the course of the inquiry."
MultiChoice has expressed new trends and patterns in the industry have caused disruption and given them tough completion "Since providing the 2017 submissions, Multichoice has continued to face increased competition and threats to its business, leading to further competitive responses."

The industry is rapidly changing with the emergence of over-the-top (OTT) media services — like Netflix, Hulu and Amazon Prime — this has led to the loss of customers or subscribers. It has led to further loss of revenue, which resulted in retrenchment MultiChoice added.

In its argument, Multichoice did receive backing from eMedia Investments, which owns eTV. In its submission, the free-to-air broadcaster said that although OTTs currently have little effect on the market now, Icasa needs to take a long-term view on the matter.
"OTTs will, as the cost of data reduces, access to internet increases and digital content is made available en mass, impact on the subscription and broadcasting industry as a whole."

Media Monitoring Africa director William Bird also chipped into the debate saying that even though MultiChoice has the monopoly within the local market, the emergence of dominant global players, like Netflix, present "a genuine threat". Therefore comparing MultiChoice  OTTs "is not even a fair fight", he said.

Bird said that the inquiry outcome should ultimately serve the public, not those who wield power. Without a sustainable local content sector, the public will likely lose out, he said.

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