MultiChoice pins hopes on tech

By Damaria Senne, ITWeb senior journalist
Johannesburg, 12 Jul 2007

In a bid to hedge its bets against upcoming competition in the pay-TV space, MultiChoice plans to offer its programming through a number of platforms.

These include broadband, video-on-demand and digital video broadcasting via a handheld (DVB-H).

At a media briefing yesterday, MultiChoice said the offerings are in various stages of development, with many scheduled for commercial release this year.

Linda Vermaas, CEO of MultiChoice's DTV Mobile, says the company does not expect the other platforms to replace traditional TV.

"It's a matter of ensuring users can access TV programming using a device of their choice at any given time."

Stiff competition

The broadband service will be available before the end of the year, says MultiChoice GM of new media Richard Fyffe.

The company is in the process of building its broadband Web site, he says. The offering will be along the lines of "catch-up TV", where users can download TV programmes they may have missed, he says.

Early in June, MultiChoice also launched mobile TV, through its DTV Select. Subscription for the service is R139 and is aimed at the lower-end of the pay-TV market.

The company is also testing high-definition TV services, with plans for a commercial roll-out in October.

MultiChoice SA CEO Nolo Letele says the broadcaster expects stiff competition once new pay-TV players have been licensed. Its most direct competitor will be Telkom Media, as Telkom - which owns 60% of the broadcasting company - "has been throwing money at it".

"It's a given that we will see price wars happening and our subscribers will migrate to other players. Margins will get thinner and content rights will become more expensive," he explains.

All about price

MyADSL founder Rudolph Muller says MultiChoice's broadband offering will be welcomed by his forum's membership if the price was right.

However, current bandwidth costs make access potentially prohibitive, he says. Fyffe says a download of a 45-minute episode uses up about 250MB of data. Using a Vodacom HSDPA connection, the download would cost R70 per episode.

"You would do better to go to the video store or even buy the DVD," says Muller.

The high costs of bandwidth notwithstanding, MultiChoice's plans to use broadband as a medium makes sense, he notes.

"They have a window of opportunity to use their monopoly in pay-TV to win customers much like Telkom did before Neotel became fully operational."

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