What South Africa's viewers have been asking for is now happening in India: Pick and pay only for the individual pay-TV channels you want.

A quiet but dramatic change is coming to India with something that South Africa's pay-TV subscribers have been clamouring for: From 1 February India's satellite pay-TV customers will get to pick and only pay for the TV channels they want - although there are some catches.

The idea or hope is that pay-TV subscribers in India will be paying less for their monthly pay-TV subscription bill when they only choose the TV channels they want and pay for those.

That, however, might not necessarily be the case and the regulatory move is more about improving "openness and transparency" about the price of pay-TV services - something that the change will do, than making pay-TV subscriptions cheaper.

According to reports, in a move that will have a far-reaching impact for pay-TV viewers and pay-TV operators in India, the country's regulator is forcing all pay-TV companies to publish prices of individual pay-TV channels, and to allow pay-TV consumers to pick only the channels they individually want, and to then only pay for those.

In Canada a similar regulatory move by the CRTC in 2016 was an epic failure when that country's broadcasting regulator ordered pay-TV companies to provide consumers with a limited bundle of main TV channels, and in 2017 ordered them to make an option for individual pick-and-pay TV channels available.

Since the introduction of the so-called a-la-carte option instead of the so-called bundling of channels into pay-TV packages, Canada's pay-TV subscriptions have been in decline (further fuelled by the growth in video streaming services like the arrival of Netflix).

India's broadcasting regulator, is now mandating similar sweeping changes from 1 February in that country - something that South African pay-TV subscribers have also asked for, but that companies like Naspers' MultiChoice (that runs the DStv and GOtv services in South Africa and across sub-Saharan Africa) have said is not possible to do or to provide.

The Telecom Regulatory Authority of India (TRAI) has not just ordered that country's pay-TV operators to provide the pick-and-pay of individual TV channels as a new system option to existing and potential pay-TV subscribers, but has also ordered pay-TV companies to list upfront the price of every TV channel.

TRAI is going even further and although India is a free-market consumer economy, has ordered a cap on the maximum price per TV channel a pay-TV operator will be allowed to charge - Rs19 or R3.78 per month.

TRAI says the new pick-and-pay system for the TV channels pay-TV users want will "free" viewers in India from having to pay for a specific set of TV channels in a bouquet or package in the way that MultiChoice, China's StarTimes/StarSat, Deukom and others in South Africa and Africa have sold traditional pay-TV subscriptions.

There are several small print caveats, however.

India's pay-TV subscribers should get ready for the listicle bill. Similar to hospital, hotel and restaurant bills, India's pay-TV subscribers are going to hit pay-TV subscribers with itemised billing.

It does mean bigger transparency for every purchased line-item with customers able to see exactly what they're charged for but also the opportunity for pay-TV operators to add additional charges for items and services that previously were lumped in somewhat for "free" or as part of an overall cost.

For instance: It won't be possible to pick and pay for just one TV channel. Every pay-TV subscriber will pay from the outset for a basic package of 100 standard definition (SD) free-to-air TV channels. Those 100 channels will come with a base cost called a monthly "connection fee".

It also means that receiving free-to-air channels through pay-TV in India will no longer be free.

Beyond the basic 100-channels bundle, pay-TV subscribers will be able to pick and add channels individually, each at a different cost, but no channel allowed to be more expensive that the maximum fee for an individual channel set by the regulator.

After reports that pay-TV costs will rise, TRAI in a press release admits that India's pay-TV subscribers will pay less but that it's from the understanding that a pay-TV household will also have and want a reduced number of TV channels. TRAI says consumers will pay less because they will decide to have less TV channels.

TRAI worked on a model of 50 TV channels, saying "more than 90% of TV homes view/flip 50 or lesser number of channels".

"Therefore any analysis that keeps 250 or more channels for pricing of monthly tariffs, creates a false impression."

"If a consumer chooses the channels which he really watches, then he will be paying a lesser amount compared to what he's paying as of now."

Will watching pay-TV in India get costlier? Well, not from the beginning, and not immediately, and also not if a consumer chooses only a few channels. Pay-TV operators are already working on offering and building in steep discounts to maintain current pricing levels and to prevent any bill shock during and after the switch-over.

But over time - and only time will tell - once heavy discounts expire or are phased out, monthly pay-TV bills in India could possibly increase. Consumers who also opt for a lot of TV channels will pay more.

Also to keep in mind is that the administration systems and admin costs of running and implementing numerous different customer channel choices, as well as paying for channel carriage agreements in order to have those potential channels available as a choice for potential picking by consumers, will add a big financial burden to pay-TV operators' operating costs bottom-line.

These are costs that pay-TV companies, like any business in the business of making a profit for shareholders, will pass on to customers.

MultiChoice SA CEO Calvo Mawela on why DStv subscribers can't pick the TV channels they want: 'The model just doesn't work'.

Individual DStv subscribers can't each just pick their own TV channels as they choose because the model doesn't work, says MultiChoice South Africa CEO, Calvo Mawela.

In an interview on SABC News Calvo Mawela explained why DStv subscribers in South Africa and across Africa can’'t each pick only the TV channels each one of them want, and why MultiChoice bundles TV channels in a few bouquets.

"The model doesn't work. The model just doesn’t work," said Calvo Mawela.

He cited Canada that "went through a very rigorous, time-consuming regulation change in Canada where they insisted that pay-TV operators need to do a la carte. Guess what? Today there is no uptake because consumers end up paying more for the same number of TV channels that they're getting today".

"So it came up to a zero-zero sum where they went through this whole process. What consumers don't understand is that we look at our research across the market and then what we do is that we bring everybody together with different tastes of content."

"In that way we attract a much larger audience and then prices come down. That's how we do our packaging in order to ensure that we keep prices down, that will attract a bigger audience because we've got children, we've got sport, you've got movies and all other content that we have."

Calvo Mawela said that "consumers – probably because they're not exposed to other markets that are trying this type of thing where it's failing horribly, like in Canada that just introduced this" are not aware of how pay-TV works.

In August MultiChoice will be dumping the former Gupta-owned ANN7 from DStv that recently changed its name to Afro Worldview and changed ownership hands to Mzwanele Manyi, with MultiChoice that says it hopes to announce the new local TV news channel replacing Afro Worldview before then.

"We are targeting to make sure that we make an announcement before the expiry of the current contract so that we can people an opportunity to know exactly what's coming next," said Calvo Mawela.

M-Net CEO Yolisa Phahle reveals: DStv is looking at the possibility of giving DStv subscribers only the TV channels they want.

With M-Net celebrating its 30th anniversary as a pay-TV broadcaster in South Africa, M-Net boss Yolisa Phahle revealed that DStv is in fact looking into the possibility of giving DStv subscribers the option of subscribing and only paying for the specific TV channels they want.

The existing direct-to-home (DTH) pay-TV model in South Africa and globally doesn't allow for subscribers to choose and pay for only those channels they individually want, since pricing and payment per channel would become exorbitantly expensive.

Yet Yolisa Phahle as M-Net CEO on Tuesday night stunned with the revelation that DStv is looking into the possibility of breaking up TV channel bundling in South Africa and perhaps giving consumers the choice to pay for only the channels they want under the pay-TV business refers to as the so-called "a la carte" option.

Yolisa Phahle made the revelation on Tuesday night during a radio interview on The Money Show with Bruce Whitfield on 702 and comes as M-Net is celebrating its 30th birthday.

Asked why DStv subscribers can't just pick and pay for the specific channels from MultiChoice's bouquet of available DStv channels, Yolisa Phahle confirmed that "that's something that DStv is actually looking into at the moment".

"More and more and more and more we hear that this is something that consumers really are asking for."

"I guess for us it's the challenge of like trying to sort of work out whether ultimately you're going to end up paying more and people are going to be unhappy because they're only getting 3 channels and they're paying more than they were for 100 TV channels," said Yolisa Phahle.

"The fact of the matter is people are asking the question and somehow we've got to find a way to be able to give people what they want because if we don't, there are options today."

Currently, the existing pay-TV model only work because like a restaurant buffet or a gym, everybody pays a certain price for access to whatever they then want to consume or the equipment they want to use, with the money making it possible to provide everybody using the restaurant or gym a bigger selection.

All pay-TV subscribers essentially cross-subsidise the overall bouquet cost, where TV channels that cost much more and those costing less, are included into segmented packages to make it affordable at certain price points to the consumer.

Yolisa Phahle said "if people want to be able to pay for what they want to watch, then it is incumbent upon us to try and see what we can do to meet that demand".

Big plan to improve additional services

"We have more local channels than international channels if you add up all of our channels across the continent," said Yolisa Phahle, "and they way that we view the future is that we need to increase that local content".

"And the reason we want to increase that local content is because that is what people actually want to see," she said.

"One of our big, big plans is around improving the additional services for people who can't hear as well and also the people who need audio description, so people who can't see that well, audio description is a fantastic way to make sure that they get the full value of the shows they take the trouble of listening to," said Yolisa Phahle.

"One of our big challenges that we actually have to overcome is that that all does take time. So with all of the up to date programming, like Express from the US where we say we're going to have it for viewers within 24 hours of it being broadcast in the US – of it it's our local shows we want to put it on DStv Catch Up – then we have to enter a whole separate workflow."

"But these are things that are very high on our priorities."

Pay-TV model changing fast

Yolisa Phahle said the existing pay-TV model will be looking very different 5 years from now.

"Definitely it will be very different 5 years from now. If we look back, 5 years ago, it was very different. Today, in South Africa for example we have a huge number of new subscribers coming in to DStv."

"We have people from different parts of the country, speaking different languages, who historically were never DStv subscribers. So things are changing very fast," said Yolisa Phahle.

Having to re-invent the wheel

Speaking about how on demand services like DStv Catch Up and the growth in people watching recorded programming instead of live, linear programming is changing the subscription television business model, Yolisa Phahle said "it certainly challenges that".

"We have to accept that and we have to find ways around that. We have so many more subscribers than we had 5 or 10 years ago that I think that sort of, organically, with the scale, the business model is changing anyway."

"Across Africa there's huge potential. There are so many people who technically who will be able to, or who can, afford pay-TV, in relation to that number before, that in many ways, I guess, the subscription element becomes important and the advertising still is very, very important."

"But of course you can’t make the same money when you’re not having commercial breaks or when people are not watching as they used to," said Yolisa Phahle.

"It is a time of great change and it's something which we're not alone in experiencing. Pay-TV operators all over the world are having to re-invent the wheel and in many ways that's a very exciting thing to do."

BREAKING. Forcing operators to sell TV channels separately will destroy the pay TV business; lead to fewer viewing choices, only 10 channels.

If pay TV operators were to be forced to sell TV channels separately to pay TV subscribers on a so-called a la carte basis and forced to do a so-called "unbundling" of their TV channels it will destroy the billion dollar pay TV industry, lead to less choice, and to only 10 TV channels in America that survives, a new independent analysis on the pay TV industry has found.


In America the department of Justice is investigating the pay TV industry as well as the programming and TV channel bundling agreements - the basic premise on which the pay TV industry's model is based. 


It comes as South Africa's National Consumer Commission issued a compliance notice to MultiChoice's DStv, On Digital Media's (ODM) TopTV and the SABC which the commission since had to retract after it acted too hastily. The Commission wanted them to sell and make available various TV channels separately - in essence selling single crayons instead of crayons by the box.


ALSO READ: South Africa's National Consumer Commission clearly clueless as to why ordering pay TV operators to sell TV channels separately, is a very bad move.

ALSO READ: The real cost to the consumer should South African pay TV operators be forced to sell TV channels separately.

ALSO READ: South Africa's pay TV sector in peril - how the National Consumer Commission will break the pay TV business if it forces the "unbundling" of TV channels.


Now a new independent American analysis by Needham & Co. has issued a grave warning that forcing pay TV companies to offer TV channels on an a la carte basis - giving individual TV channels all separate prices and allowing each subscriber to to subscribe to only the specific TV channels they want to pay for - would present tremendous risk to every company in the TV business, including production companies, separate broadcasters and the entire TV ecosystem. 


In the new report by analysts Laura Martin and Dan Medina from Needham & Co., the analysts warn that if pay TV operators are forced to "unbundle" TV channels, that it would destroy $300 billion of value within just the American TV industry, will endanger 1 million jobs with the TV industry, will negatively impact consumers' video choices, and that only 5 to 10 traditional TV channels in America would be able to survive such a move.


"The government is a bull in the proverbial china shop with unintended consequences likely to destabilize the delicate work of the invisible hand which is working today in the TV ecosystem," Dan Media and Maura Martin writes.


Without the ability to sell TV channels in a bundle to consumers, just five to 10 'hit channels' would be profitable enough on a standalone basis to survive unbundling, says the analysis. That means that hundreds of TV channels - even though a specific channel may be the favourite of a specific pay TV subscriber - would become uneconomic to produce and run and will simply cease to exist. 


The report surveyed 500 TV viewers in America to gauge which TV channels they would like, would select and would pay for if they were able to choose just the TV channels they want. "Minority and special-interest channels would be unlikely to survive," the Needham & Co. analysis has found. 


"Since the average TV households watches 12 to 14 TV channels each month, every households would lose TV channels which they believe are important to them. In an a la carte world, consumer satisfaction would be destroyed." The report says an a la carte model would "bankrupt all niche TV channels within five years, destroying enormous value" for TV viewers and pay TV subscribers and the TV industry.


Pay TV revenue would also drastically decline by between 15% to 20%, and ad revenue will dramatically plunge by 75%, the analysis projects. It would put 1 million jobs in America at risk which includes employees at pay TV operators, telecommunication forms and 500 000 employees at media companies who all depend on profits generated within the pay TV industry.


"We believe that every job in these companies is at risk if the TV ecosystem is disrupted by the government because TV is the most material contributor to revenue in every case," says the report.

BREAKING. Might MultiChoice ever go a la carte with channel bouquets or do new bundled DStv bouquets? 'It is something that we're watching.'

You're reading it here first.

Might MultiChoice ever go with the a la carte channel approach where subscribers get to choose the TV channels they want and only pay for that DStv subscription, or might MultiChoice create new, specific-interest genre channel bouquets like just a bunch of sport channels like a SuperSport bouquet for instance?

In the pay TV world of course not all TV channels are equal, and the more desirable channels (that actually cost more), in fact ''cross subsidise'' the possibility of the lesser or smaller channels.

They're bundled together by pay TV platforms and the service is sold to subscribers. This intricate channel distribution/pay operator ecosystem will unravel if more popular and more expensive channels are not bundled together with less popular and less exclusive channels. Think about it: There's simply not as many people who will actively select The Style Network as who will select SuperSport for instance.

''At MultiChoice we have the DStv bouquets that we have but we always keep on doing research; we constantly study pay TV platforms around the world,'' said Aletta Alberts, general manager for content at MultiChoice, when asked about the possibility of a la carte channels subscriber choice or the creation of new DStv bouquets in future.

''As trends change, obviously, definitely we like to be at the front end of that. It is something we keep at the back of the mind. But I can't promise that to you today. It is something that we're watching,'' Aletta Alberts said.

''As we develop and as new technology, new back-end systems, and all of that come onto the market, it does become something that we keep on investigating. Who knows? Sometime in the near future we might have some news for you on that. It doesn't mean that we are going to do it but I am just saying that it's not just 'No, we are never going to do it'. That's the most I can for now talk about that.''

Three takes on the very latest about this issue in America:
Reuters / Los Angeles Times Business / IT World