DStv’s grip on sports under scrutiny

TV giant may lose its stranglehold

Satellite TV giant MultiChoice is about to come under intense regulatory scrutiny as the government looks to loosen its stranglehold on the sector, especially its exclusive hold on premium sports for its SuperSport channels.

The department of communications, regulator Icasa and the competition commission are all weighing in.

Last week, Communications Minister Dina Pule announced she was going to issue a policy directive to Icasa to address competition in the broadcast sector by looking at market definitions for the wholesaling of premium content.

The likeliest target of these regulations would be long-term exclusive deals for premium content. The likely outcome would be forcing MultiChoice to license certain premium content to rival broadcasters.

Pule said the directive would be issued before September.

This action by the state is an acknowledgement that attempts to boost competition in the broadcasting space have failed.

It has emerged that two complaints have been lodged with the commission. Both are complaining about MultiChoice subsidiary SuperSport’s monopoly on key sports rights like the Premier Soccer League (PSL), the English Premiership League, the Springboks and Super Rugby matches and cricket – Proteas and the local tournaments.

One complaint was lodged by On Digital Media (ODM), the parent company of struggling, rival satellite broadcaster TopTV in November. The other is by Louis Johannes van der Merwe, a member of the public, in April last year.

The ODM complaint came shortly after the company was placed in business rescue in October. It also coincides with the company’s initial application to regulator Icasa for the right to broadcast three new pornography channels in the same month.

TopTV, which recently took on board new foreign investors in the form of China’s StarTimes, which bought a 20% stake, is still in business rescue and e.tv’s satellite offering, e.Sat, which was granted a licence, has still not launched, claiming the market is too difficult for a new entrant at the moment, due to MultiChoice’s monopoly.

TopTV is reported to have only 200 000 active customers, compared with the millions that MultiChoice has.

The competitive nature of the market is so intense that when TopTV was shopping around for additional investors, it emerged that MultiChoice was in fact funding one of the bidders.

If TopTV actually closed down, it would compound MultiChoice’s problems and probably increase the risks of greater state regulation.

Icasa currently has the Sports of National Interest regulations, which explains that these kind of sports may not be broadcast exclusively.

However, a broadcasting insider has said that these regulations were so poorly worded, they actually didn’t prevent SuperSport from having exclusivity for some sporting events.

“These regulations don’t achieve their objective,” said the insider.

Lara Kantor, regulatory head for e.tv, said that if the regulations looked at the wholesaling of sports channels, then international best practice shows that SuperSport will likely be forced to sell sports rights wholesale to rival broadcasters.

MultiChoice said this week that it has not had sight of the ODM complaint or been called by the commission.

It said: “We therefore are not in a position to comment.”

Attempts to get comment from Pule, Icasa and TopTV were unsuccessful.

SuperSport’s rights to local soccer, in particular, have caused controversy in the past when it beat national broadcaster the SABC to acquire the rights to PSL matches in 2007.

What the ODM competition commission complaint says

ODM argues that SuperSport is refusing to give it access to an essential facility, is engaging in anticompetitive and exclusionary acts, and is requiring or inducing a supplier or customer to not deal with them.

“Since they were established, MultiChoice and/or SuperSport have secured the vast majority of sports-broadcasting rights relating to leading sports tournaments in South Africa and internationally on an exclusive basis,” states ODM’s complaint.

ODM argues that SuperSport has so many sports rights, its broadcasts are more comprehensive than UK operator BSkyB.

Broadcasting giant BSkyB has been through a similar process with the UK regulator over sports rights.

“It is significant to note that in the United Kingdom the regulatory authorities have deemed Sky Sports to be a dominant sports broadcaster and they have prevented Sky Sports from restricting its distribution to its own platforms,” states the ODM complaint.

ODM argues that in February 2012 SuperSport aired 82 live football games, while the SABC only beamed 14 and e.tv just four.

The ODM complaint details meetings held between SuperSport and ODM to discuss the supply of channels SuperSport 3 and 4 to ODM.

After SuperSport showed initial interest according to ODM, they then reneged on the deal, only offering a secondary sports channel at a substantial cost.

Negotiations continued, but the sticking point appears to be that ODM wanted 50% of all live games broadcast on Supersport 3 and Supersport 4.

After a meeting held between Naspers chief executive Koos Bekker and ODM chairperson Valli Moosa, negotiations began again.

However, MultiChoice and SuperSport’s attitude at meetings is described as “adversarial, counterproductive and obdurate” by ODM and no deal was ever

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