by Thinus Ferreira
Read between the lines and MultiChoice's two-prong plan for future DStv subscriber growth becomes clear: The pay-TV operator is cutting down on spending on acquiring international content and now wants to funnel access to overseas content through storefront streamers like Netflix, while at the same time it will be doubling-down with a heavy focus on the creation of new local content by filling the void left by the SABC.
MultiChoice released its financial results for the 6 months until the end of September 2020 and revealed that the Randburg-based pay-TV operator had passed 20.1 million active pay-TV subscribers.
Calvo Mawela, MultiChoice CEO, in a radio interview on Thursday evening, said "Our strategy is to pivot to more local content" and that "our focus on local content is doing well".
He also said "We are very clear about our strategy: We will continue to grow our traditional satellite linear TV business; at the same time as with people going online, we want to 'own the habit' of people moving online and that the products we have online are competitive."
In a TV interview, Calvo Mawela said "Our focus on local content and sports seems to be working very well and we are doubling down on that and reducing our international content spend and that is what is going to make sure that this business continues to grow into the future".
In MultiChoice's investor's call on Friday, Calvo Mawela said "We believe that whether organically or through third-parties, offering our customers not just a TV package, but an ecosystem of entertainment options will be fundamental to our long-term success, and to making our customers lives more convenient".
"Our aim is to lead in content and specifically invest more in local content, to drive new opportunities to leverage our scale, and expand our entertainment ecosystem, and to deliver subscriber growth and accelerate the uptick of our OTT products."
Here is the first part of the plan:
MultiChoice will be launching its new DStv Explora Ultra decoder next week with Netflix as the first third-party subscription video-on-demand (SVOD) app that DStv subscribers with an existing Netflix account can log into, or subscribe and unsubscribe to.
DStv subscribers will be able to pay in rand through tacking Netflix onto their monthly DStv bill.
Netflix is the first of presumably several international streamers that MultiChoice would add over time.
In its Thursday financial results MultiChoice said that it "will be adding another major international
subscription video on demand (SVOD) service soon". It will very likely be Amazon Prime Video.
So this is what is happening and where things are going: Instead of M-Net acquiring and paying for Star Wars: The Mandalorian for instance - a show it can't get even if it were willing to pay the licensing price - MultiChoice could add The Walt Disney Company's Disney+ streaming app for DStv subscribers in South Africa and across sub-Saharan Africa so that through this way - and it is the way - they could get their fix of "Baby Yoda" while the rest of the world are watching and buzzing about it.
The same goes for other major video streamers like Amazon Prime Video, WarnerMedia's HBO Max, ViacomCBS's Paramount+, Discovery that plans to launch a streamer in 2021, and others.
It is also why internationally distributed channels from Disney XD to BBC First have been disappearing from DStv this year.
MultiChoice has come to the realisation that it will no longer be able to effectively compete with acquiring international content as it was able to in the past because of seismic shifts in the international content distribution game that has been upended because of the advent of streaming services.
While those hot, premium, must-see series and films have always been on M-Net (DStv 101) for decades, some of that content has become exorbitantly expensive. MultiChoice must pay for this in foreign currency, and secondly, it is increasingly simply not available to buy.
In a massive shift, Hollywood studios are no longer piping some of their most sought-after content properties through their international distribution pipes to linear TV channels but putting it exclusively on their own streaming services - their "new channels" if you will - with their own streaming services like Disney+ as their main focus.
The Lord of the Rings fantasy TV drama is currently being filmed in New Zealand, billed as the most expensive TV series ever, while Foundation based on Isaac Asimov's science fiction series is filmed in the UK for Apple's Apple TV+ for instance.
It would be unbearable and unthinkable for MultiChoice not having these series for their DStv customers when these new buzz-worthy shows launch. And as things stand, neither The Lord of the Rings or Foundation, nor a flurry of other shows currently in development and filming, are available.
By adding various streaming services like Netflix and Amazon Prime Video as soon as possible - with DStv subscribers subscribing and unsubscribing to their own unique collection of streaming apps as they seek out specific series - MultiChoice will pivot to once again being able to claim that it is the "home" of the best international content - without having to directly pay or source it.
By offering Netflix, Amazon Prime and others as streaming add-ons, MultiChoice will now - once again - be able to market itself as "DStv: The home of The Lord of the Rings through Amazon Prime Video", or "MultiChoice brings you Stranger Things through Netflix".
Here is the second part of the plan:
Meanwhile MultiChoice is doing heavier and heavier lifting when it comes to local content.
The weakness of the out-of-pocket South African public broadcaster, unable to produce enough and quality local content, has been MultiChoice's gain which completely took the gap and will be exploiting the inabilities of the SABC on the local content to an ever-larger degree.
MultiChoice is producing more, and better, local content for its various M-Net packaged channels in South Africa from M-Net, to 1Magic, the Mzansi Magic channels and its set of kykNET channels - and it's set to do even more.
MultiChoice is taking the gap to give DStv subscribers want they want - more local content - with a heavy future focus of ramping up and rolling out even more local content. MultiChoice is doing this while the bulk of the bloated SABC's budget goes to paying staff as its biggest expense line item, leaving it unable to make the local content it needs to attract audiences.
MultiChoice Africa has likewise rapidly been duplicating M-Net's South Africa success across sub-Saharan Africa - even as far as Ethiopia.
Using the same blueprint with ongoing success, MultiChoice has launched and will launch even more regionalised channels in various African countries where it's filling up the programming grids with localised format adaptations of reality shows, original telenovelas, talk shows and new drama series using local producers and on-air talent.
In these countries - like with Date my Family Uganda on Pearl Magic in Uganda, or Zambia's first telenovela Zuba on Zambezi Magic - MultiChoice and M-Net are pipping crumbling local broadcasters to the post who are unwilling or unable to create the local content they should be making.
At the same time MultiChoice is opening up new production avenues for not just local filmmakers in these countries specifically but also creating new opportunities for its own graduates from its successful and growing pan-African MultiChoice Talent Factory film academy.
