A lack of high-speed broadband
“ History will show us that pay TV is the better business model.”
Going mobile
DStv’ s competition is online services like Netflix,
Amazon Prime Video, and YouTube, even though their businesses may be based on different technologies. Where South Africa’ s broadcasting giant previously had no real rivals to worry about, it must get ready to face international media powerhouses.
MultiChoice believes that streaming video, whether live or on-demand, is the future of television, but it also doesn’ t think satellite TV will disappear anytime soon.
“ History will show us that pay TV is the better business model,” said DStv Digital Media group general manager Graeme Cumming.
Cumming said the problem with streaming video is that it not only faces the high capital costs of buying and producing content, but high variable costs, too. Bandwidth is one of these escalating operational costs, said Cumming. The more content you deliver to subscribers, the more you pay.
There’ s no question that video streaming is what people want, but whether it’ s a better business, whether there’ s more margin in it, and whether it’ s sustainable is the argument, he said. But the world is moving to streaming, so that’ s what DStv must plan for.
A lack of high-speed broadband
“ History will show us that pay TV is the better business model.”
Although it initially launched as a value-add for DStv Premium subscribers with PVR decoders, MultiChoice planned to make an online version available from the beginning. By 2013, the Internetbased version of DStv BoxOffice was launched.
During November 2014, following the launch of its first Explora decoder, DStv announced Catch Up Plus. This expanded the existing on-demand Catch Up catalogue on your DStv decoder, with hundreds more titles available for download from the Internet.
Catch Up Plus features recently-aired movies and series, and in 2016 the M-Net Movies Collection was added to the catalogue – expanding it to 1,000 films.
This is comparable to services like Netflix and ShowMax in South Africa. Although Netflix has over 15,000 titles on its platform in total, roughly only 5,000 of these are available in the United States. In South Africa, the title count grew to over 1,000 during 2016.
Going mobile
Another Internet-based service MultiChoice launched in November 2014 was DStv Now, an app for Android and iOS devices that lets subscribers stream or download videos from Catch Up. It also lets DStv Premium subscribers live-stream several channels over the Internet, from M-Net to SuperSport.
A barrier to entry for South Africans who desire streaming services is a lack of connectivity. Few people in South Africa can afford the high-speed broadband connection, and the associated large data cap, you need for video streaming.
Netflix, for example, recommends a 5Mbps line for HD streaming and a 25Mbps line for UHD content. This gives DStv time to prepare for a future where most video entertainment is delivered over the Internet.
On-demand content is not a new concept for DStv, however, with the company launching its BoxOffice service in 2011. BoxOffice is a transactional videoon-demand service that lets you rent movies like you would in a video store.
In addition to preparing for a future in which TV is streamed and not broadcast, Cumming said the launch of disparate online services presents a new opportunity.
Where you previously might be able to get all your video entertainment through one service on one box, with streaming services it is spread across multiple apps – potentially on multiple boxes. For consumers, this may present an inconvenience.
“ There is opportunity for someone to offer all the services people want through a single interface with unified search and content discovery, and without having to subscribe to each service separately,” said Cumming. ■
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