MultiChoice, the brand which owns DStv and GOtV, has a grand unification for Africa: aggregate all the best local and global video entertainment contents in its ecosystems and then impose fees on the African people. MultiChoice is the industry leader and a dominant category-king. It owns the castle and holds a fortified moat which increasingly no one has figured out how to crack. Because of its war chest, being indirectly controlled by Naspers, Africa’s largest company by market cap, it has liquidity to win any battle and war, in Africa, when it comes to contents. So, unless something radical happens, MultiChoice will remain the king.
Yes, its impacts will continue to grow stronger. In the 21st century, great digital tech companies are those that control demand, not supply. Because supply is increasingly unbounded, the problem is now who has the demand. For Netflix which has a streaming war with Disney in America, opening a new front in Africa may not be a good idea. So, Netflix gave to the company (DStv) which has the demand (i.e. users). The same goes for Amazon because building demand would take years in a highly fragmented and heterogeneous market. The best deal is to go with the guy with demand and share revenue.
By 2022, I expect Disney+ and Apple to also arrive on DStv. It is a natural trajectory: supply while great does not matter that much in fragmented markets in Africa when there is a dominant player with demand. DStv has been around for decades, and catching up with it would take years. But working with DStv, these American firms can move into revenue accelerations since the presence of Netflix and Amazon will strengthen DStv brand.
“As more studios go direct to consumers, consumers have to make multiple choices about what content they get. They are having to do that individually. That’s not a nice user experience, to go through three or four different apps to get to the content,” Jacobs said. Instead, MultiChoice wants to position itself as a “super aggregator”, where it becomes the “go-to shop where you pick and choose what you want to watch in a very easy-to-access platform”.
At the end, DStv wants to become a super-aggregator and a one-stop destination for video entertainment in Africa. It has a promise for that because it currently controls demand. Unless regulators push it to sub-license contents, highly unlikely, DSTv’s parent company, MultiChoice, will unify video entertainment in Africa. The model is called Aggregation-Integration Construct: 90% of the world’s top leading tech firms have some elements of it. Yes, DStv is evolving as a tech firm where marginal cost drops further since it can even cut production budget, knowing that goods are coming from Netflix and Amazon.
But DStv’s ambitions in Nigeria might hit a major wall if the new broadcast code by the regulatory commission goes into effect. The new code will prevent pay-TV and streaming platforms from making content exclusive and compel them to sub-license content at prices that it will regulate.
While the National Broadcasting Commission (NBC) says its aim is to encourage competition in the movie industry, operators in the sector feel the impact will be the opposite. IrokoTV’s Jason Njoku has pointed out that it could destroy the pay-TV market in Nigeria. Moviemaker Naz Onuzo highlighted that the inconsistencies and confusion in the new code will make it largely unenforceable. (TC Daily newsletter)