With new competition shaking up the pay TV market in South Africa, new innovations that's becoming possible with the slow but steady introduction of uncapped internet services and the (hopefully imminent) licencing (finally!) of mobile TV in South Africa, I asked Nico Meyer how MultiChoice is responding to all of these exciting new content distribution options, possibilities and competition.
Nico Meyer talks about where MultiChoice is moving towards and where the pay TV operator is shifting its focus. He addresses the new pay TV competition in South Africa and what it means for the pay TV market in South Africa as MultiChoice sees it, talks about the way MultiChoice wants to expand as it moves forward, and what MultiChoice's biggest challenges are.
For my full interview with Nico Meyer, click on READ MORE below.
Just to say, first of all, that MultiChoice welcomes competition. You will see that what the effect of competition is, is that it unlocks the market. Suddenly there is a whole lot of interest in pay television in South Africa again and with what is happening with television and pay TV in the country and in satellite television. We also saw it in the rest of Africa when GTV launched in the rest of the continent suddenly there was a lot more general interest. In general competition in any industry is good. Now there's interest again, there's a vibe, so we welcome it. Now what are we doing? For us it's all about the customer experience. We're bringing a lot of dedicated services that's to the benefit of the DStv subscriber. We're moving online, with subscribers being able to stream and download video content, it's moving to on demand video content, high definition (HD), new technologies - those are the areas where we're playing and now growing our offerings. DStv's SD PVR was a world first in terms of dual view. We're staying at the forefront of technology and TV technology. I think in terms of our international exposure – and also the Naspers group which is active and involved in several territories around the globe – we're using the best intellectual capital available in the world and we're utilizing it to benefit and to enhance our subscribers' experience. Two things are standing out for MultiChoice: innovation and customer experience.
In terms of cellphone television, DVB-H, where is MultiChoice? Is MultiChoice unhappy with the procrastination of the Independent Communication Authority of South Africa (Icasa) and the tedious process of awarding mobile TV licences in South Africa? I mean, the 2010 FIFA World Cup soccer tournament is next month.
As you will know, Icasa did open the process of application for mobile TV licences. We applied for a licence. It's a process you have to go through. We're dependent on Icasa.
If MultiChoice is indeed awarded a mobile TV licence, how quickly can MultiChoice have a mobile TV service in South Africa up and running?
We've been testing a mobile TV service for the past two years already. The only challenge left is really what will now be happening in the licencing process. All the applications are in, the public hearing process takes place and there might be certain requirements that Icasa comes with, so it's difficult to anticipate what Icasa might require. We have been testing this service for a long time.
It's interesting to me that MultiChoice is still growing organically in terms of content, and that DStv keeps adding TV channels. Obviously MultiChoice will get to a point where DStv won't be able to add TV channels as steadily as it has been in the past. Then there's also structural, technological back-end growth both in hardware and infrastructure, software, decoders and services like DStv on Demand both for television and online. Where do you see growth more happening in the future for MultiChoice – more organic and more content driven stuff like adding more TV channels, or more the latter?
I think it's always a combination of both. Over the years we have always come up with new innovations and brought new technology to market. Historically we've also had organic growth. Unfortunately I can't give you any indication of what we're seeing for the future, it's against our policy, but historically we publish our growth in our annual reports in which you can see and track our progress.
If you look at DStv, pay TV in South Africa is still pretty much classified as a luxury item when it comes to consumer spending. What would you say to consumers in South Africa under intense pressure regarding discresionary spending, why pay TV is still a valuable and worthwhile discresionary expenditure?
Why did pay TV take off in South Africa and why is it still performing well? It's home entertainment. I think also when the consumer comes under pressure because of a tight economy and they have to consider the options: do I go to the restaurant, do I go to the movies, or do I stay home and look for entertainment there – home entertainment is what consumers gravitate towards. Initially I think it might have been seen as a luxury item but MultiChoice has grown especially with the DStv Compact bouquet which caters for a whole different niche group of consumers falling in a whole different LSM bracket. We also have other bouquets like EasyView and the new DStv Lite which are really inexpensive pay TV options. We do cover a wide spectrum and have products for different LSM groups.
Where is MultiChoice's biggest challenges, or where do you see the biggest challenges within South Africa's TV industry and our information technology (IT) industry to enable MultiChoice to grow? Is it bandwidth? Is it other service providers?
We wanted to bring some of the things we just rolled out and launched, a lot earlier and a lot earlier in the year. But bandwith availability remains limited in South Africa. In terms of the groundbreaking work that MWeb has now done with rolling out South Africa's first uncapped internet service, it creates a new paradigm within the market. It causes all players to go and rethink how they're going to approach and handle and service their market going into the future. That was a big turning point. I think that now, as soon as the bandwidth market becomes unlocked - which will now happen within a short space of time - there's going to be so much more opportunities. I have to tell you that this year I'm really excited, and I can really go and say, ''Yes. Finally. Finally we can go and do some nice things and work on interesting innovations.'' Initially we were somewhat boxed in and restricted to just satellite TV in regards to pay television in South Africa, but now – in line with our mission – we want to be a true cross-platform operator. That is where we want to play and operate and that is where we're rapidly moving to.
