Competition probe hits S. Africa feevee.
Following the failure of another fledgling pay TV operator in Kenya last month, a competition watchdog is probing whether South African giant Multi-Choice's DStv is using an unfair competitive advantage to push other players out of the Kenyan market.
Smart TV, owned by Sweden's Next Generation Broadcasting, pulled out of Kenya in February, just over a year after entering the East African nation. The platform struggled to take hold in a market dominated for two decades by DStv; in more than a year Smart TV managed to attract only around 2,000 subscribers.
The move was a further reflection of the struggles facing new pay TV entrants in Kenya.
The investigation of MultiChoice, led by Kenya's newly minted Competition Authority, alleges that the South African platform used its exclusive deals for premium content--including the lucrative rights to soccer broadcasts from the English Premier League--to prevent competitors from gaining a foothold in Kenya.
MultiChoice Kenya confirmed that it received a letter from the Competition Authority, and that the authority "emphasized that neither the letter nor the existence of these investigations should be viewed as an accusation or determination ... of wrongdoing by anyone."
The company added that it was cooperating with the probe.
Just a few years ago, the Kenyan market seemed poised for a major shake-up, as new players entered the arena and targeted the millions of low-income Kenyans who had been priced out by DStv.
GTV, owned by U.K.-based Gateway Broadcast Services, was heralded as a game-changer when it debuted in 2007. Its arrival set off a price war that saw pay TV prices plummet. Even DStv--traditionally Viewed as a high-end service too costly for most Kenyans--brought its entry-level pricing down to competitive levels.
But just two years later, GTV abruptly stopped broadcasting, leaving thousands of Kenyan subscribers in the dark.
Kenya's rapidly growing middle-class remains the most coveted demographic, targeted by each of DStv's failed rivals. In December, MultiChoice stepped up its efforts to woo that viewing public with the launch of a low-cost mobile-TV service.
Meanwhile Zuku TV, owned by Kenya's Wananchi Group, is the latest entrant looking to loosen MultiChoice's stranglehold on the market. Since bowing last year, the company has attracted nearly 40,000 subscribers--just a third of that of DStv, but a significant number in a country with a less than 1% pay TV penetration rate.
Hannelie Bekker, Wananchi Programming's managing director, says Zuku aims to differentiate itself from failed competitors by building around branded channels offering a variety of programming, including soon-to-launch original series.
The goal, Bekker says, is to target middle-class Kenyans who have yet to make the leap from terrestrial service.
"We are really not interested in splitting DStv's market in half," she says. "That would be suicidal for us. We are interested in serving this market that has historically been underserved."
By Christopher Vourlias
Please note: Some tables or figures were omitted from this article.
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|Title Annotation:||WORLD REPORT: AFRICA; South Africa's DStv|
|Date:||Mar 19, 2012|
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