International OTT services like Netflix and Disney+ pose an “existential competitive threat” to DStv, according to the pay TV service’s operator, MultiChoice.
The warning came during MultiChoice’s presentation at the Independent Communications Authority of South Africa (ICASA)’s recent inquiry into the subscription TV broadcasting services market in South Africa.
Noting that international OTT operators are its biggest competitors, the pay TV company said: “Currently, competition is fierce and will continue to grow rapidly and in a disruptive way. We consider providers like Netflix, YouTube, Disney+, HBO Now and Peacock to be an existential competitive threat.”
MultiChoice also debunked the idea suggested by ICASA that the company is somewhat protected from these streaming platforms because many South Africans still suffer from a considerable broadband deficit and would not be able to access such platforms, and thus still rely mostly on DStv services.
Commenting on ICASA’s draft findings, MultiChoice said the assertion that good-quality broadband access is limited and expensive in South Africa is not true. It argued that broadband access is already sufficiently widespread for DStv viewers to switch to OTT on a massive scale.
The Naspers-owned company backed up its claim by highlighting that three-quarters of DStv subscribers already watch TV on other devices, which means they have sufficient broadband for streaming.
“OTT entrants follow a powerful and competitive business model that is reshaping the competitive landscape and we are directly affected by growing competition from Netflix, YouTube and other streaming services,” MultiChoice said.
“This is seen in the sharp decline in premium subscriptions. The four largest DStv bouquets across all levels have seen significant falls in real prices in the last three years. Strangling MultiChoice does not guarantee access to rights and will impact other licencees, jeopardise jobs, erode the tax base and cause harm, with no benefits to the country.”