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SA broadcasting sector about to explode

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 09 Oct 2014
SA's broadcasting industry is in for an exciting ride, says MultiChoice COO Mark Rayner.
SA's broadcasting industry is in for an exciting ride, says MultiChoice COO Mark Rayner.

SA is about to see aggressive competition in the broadcasting space for the first time - and in a big way, say analysts.

In less than a month, three video-on-demand (VOD) players have entered the market - two of which already have their products on the shelves. On Tuesday, MobileTV announced a satellite push VOD service, under the TV4U brand, would be launched in February next year.

The premature announcement may have been in response to two big local players' recent VOD volleys - Times Media's Vidi and Altech's Node offering. And if Telkom CEO Sipho Maseko's statements to the press three months ago are anything to go by, SA can expect the incumbent telco to announce a video streaming play of its own soon.

On top of that, over-the-top players like Netflix, Amazon and Hulu - which are technically not open for South Africans to access - are creeping in to the local market through "back door" online services like UnoTelly, which allows users to mask their geographical location by signing up to a virtual private network or smart domain name server.

Then, when talking pure TV, MultiChoice COO Mark Rayner reckons the non-subscription, free-to-air space is about to get "very vibrant" with players like OpenView HD now in the mix ? and a handful of players that may apply for licences waiting in the wings.

New market page

BMI-TechKnowledge director Denis Smit says all of this comes against a backdrop without any serious competition in the past. "All of a sudden, new things are happening - like Vidi and the Altech Node. It will be fascinating to see how these services challenge the MultiChoice stable, where there has been incredible dominance in the broadcasting space."

Although a challenging entrant came to market in 2010, under On Digital Media's TopTV brand, the pay-TV provider has failed to gain traction and is still grappling with a business rescue process. All the while, MultiChoice maintains its 95% of the market.

Smit says, however, both Vidi and Node - or one of the two - will grow into "great competitors". He adds Telkom is likely to announce its own streaming service soon. "Broadband streaming will ultimately have significant impact on the market, especially when broadband prices come down and speeds are up. Ultimately people want to access content on all of their devices."

Differentiation, he says, will be largely dependent on the content rights the respective players are able to get their hands on.

World Wide Worx MD Arthur Goldstuck says, until just recently, there was only one option for users that wanted a combination of VOD and satellite, "and that was the Explora". The Explora is MultiChoice's latest generation personal video recorder (PVR) decoder. It offers a pool of on-demand content, which will grow to about double the current size when the company connects the decoder to the Internet next month.

Ubiquitous competition

Despite what may appear to be a daunting milieu for a company that is used to having more than the lion's share of the market, Rayner says the company embraces competition as something that is not only good for consumers, but also keeps MultiChoice "on our toes".

"It's a fun time to be in the TV business. There is lots happening locally and we have a pipeline of stuff coming up. I think it's going to be an exciting ride. Fundamentally, fast Internet changes TV forever and I think we have an interesting five years ahead of us."

DStv Digital Media CEO John Kotsaftis adds MultiChoice "sees everything as competition" - including the unwelcome scourge of piracy. Rayner adds: "Piracy is serious competition. If you go around the townships today you will see guys with USB sticks sharing Isibaya episodes, because [the TV soap] has become very popular and it is a driver for our Compact package. So we have always held the line that we compete according to disposable income."

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