by Thinus Ferreira
MultiChoice is fiercely protective of its exclusive local and international sports rights that it pays millions for to bring to DStv and Showmax subscribers and has sown up these rights for several years into the future, with SuperSport that isn't going to let streamers steal it.
Internationally global video streaming services with deep chequebooks are starting to carve out and gobble up sports rights that used to be on linear television in many countries, from basketball and football to cricket and rugby.
Streamers are also trying to break into live-streaming sports events of their own.
Netflix for instance last month attempted a Mike Tyson and Jake Paul boxing match in Las Vegas that however ended up crashing for millions of users - including South Africans - who tried to watch it, after it suffered production problems and froze due to buffering issues.
While MultiChoice is cognisant that rivals like Netflix and Amazon Prime Video are encroaching on its sports rights turf, the pay-TV provider - which is the target of an aggressive buyout from France's Vivendi SE's Canal+ - says it has sown up several of the most valuable local and international sports rights for several years into the future.
MultiChoice also doesn't think that Netflix Africa and Amazon Prime Video have the appetite to acquire sports rights of African sports, and rights for sub-Saharan Africa, for the foreseeable future.
"On all of our critical rights we typically sign multi-year contracts," Tim Jacobs, MultiChoice chief financial officer (CFO), told me in an interview.
"Because of the high risk that we've had over the last couple of years of some of these big, international streaming services that can afford and have massive balance sheets - Netflix, Amazon Prime Video, Disney+ - these are guys who can write out a big cheque and compete with us."
"Because of that, we've been very tactical about when we renegotiate these contracts and the duration of the contracts."
"We've managed to secure most of our big sports rights and we've managed to secure them for multiple years," he says.
"In that journey, we have also been able - on some of the really big rights, for example, some of our big football rights - we've actually been around the contract renegotiations been able to renegotiate lower prices," Tim Jacobs explains.
"In the past where there's been a lot of international hype around the leagues, what we've seen more recently, is that as these leagues have introduced some competition in some of the markets - for example, the English Premier League (EPL) - the two big competitors there are Sky on the one and BT on the other side."
"They bid up the cost of those league rights to the point where the guys couldn't monetise it and as a consequence, they all started pulling back. You see this in many instances in other countries in the world, where in France, Canal+ walked away from the French league and it made no sense being the dominant broadcaster there."
"They took a view of 'at a certain price point we can't monetise it'. In our markets what we've been able to do, is to go back and renegotiate with some of these big leagues and say to them 'guys, look at what's happening in Africa, look at the currency pressure, look at the pressure on consumers, we can't afford to pay you these exorbitant amounts".
"We've actually been able to negotiate slightly lower amounts."
Tim Jacobs says MultiChoice thinks it is unlikely in the foreseeable future that streamers like Netflix South Africa and Amazon Prime Video will pick up and show big sports that subscribers are used to accessing and seeing on DStv.
"That doesn't mean that we're not at risk of one of the big players coming in and outbidding us. But we've also got to be realistic about the probability of that happening."
"Amazon Prime Video has stopped doing all development of all general entertainment content in Africa. They're only supplying international content to the African market. Why? Because they're not getting any volume for it."
"Netflix has pulled out of all their Africa productions - that's a recent announcement. They're not producing anymore."
"Now if you don't have enough subscribers to justify local general entertainment offerings, chances are also that buying sports rights means that you're also not going to monetise that."
"We're not saying that it's impossible but it's one area of our business that we are very, very focused on and making sure that where possible we do secure those rights."
