Broadcast Regulation

South Africa: ICASA Needs Empirical Evidence That Netflix Is Affecting DStv Revenue

The Independent Communications Authority of South Africa (ICASA) is yet to believe that streaming services such as Netflix and Amazon are the reason  MultiChoice’s is experiencing massive revenue loss.

Chief Executive of MultiChoice South Africa, Calvo Mawela had presented his argument to ICASA claiming it had lost over one hundred thousand DStv Premium subscribers in its last financial year due to the unregulated and stiff competition it faces face from “over-the-top” (OTT) internet streaming services like Netflix.

Icasa is looking to deal with the market dominance of MultiChoice by further regulating the industry. MultiChoice argued that the announced regulations would drive DStv over a cliff and hand the South African market to the foreign online streaming players.

Multichoice said Netflix and other international streaming companies don't pay taxes in the country neither do they contribute levies nor pay broadcasting licence fees. It argued that if the regulatory body goes ahead to implement these regulations, it should apply to the whole pay-TV sector - including streaming service platforms.

An Icasa panel member, Nomonde Gongxeka-Seopa said: “We know that OTTs have come into the market and they have enjoyed growth and their revenue report is a proof. What we are missing is how the entry of the OTTs is having an impact on the pay-TV market, which DSTV haven’t provided. Malewa has shown us graphs on how OTTs have had a huge effect on pay-TV stations in the UK and US, but we need research from South African to convince us that these OTTs are competing with pay TV.”

Another ICASA panel member, Botlenyana Mokhele said: “It is possible that DSTV may be experiencing loss of subscribers because the economic climate might have suffered a shift.”

“We must see that there is a direct link between the presence of streaming services and your revenue or your subscriber base in such a way that they are impacting on the competition dynamics specifically for the South African market.”

ICASA has given MultiChoice until May 31 to show significant proof that there is a direct link between  OTTs entry into SA and its drop in revenue and subscriber base before they decide to go ahead with regulating pay-TV stations.

The COO of MultiChoice SA, Mark Rayner believed that OTTs would fundamentally bring about the disruption of the pay-TV industry and that Icasa was not paying enough attention to these developments.

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