MultiChoice says it will continue to invest in local film and television productions, having committed to spending almost R21bn over the next three years as part of the terms for the buyout by Canal+.
After Canal+’s takeover of MultiChoice late last year, filmmakers and TV producers have raised concerns about the latter’s ability to keep investing in local content, with reports of uncertainty about whether certain productions would continue or be funded.
As in several countries where it operates, MultiChoice is the biggest spender regarding local productions in South Africa. In the year to March, MultiChoice said it had 91,470 hours in its local content library.
For now, local content will remain a priority for the next three years, said MultiChoice’s recently created LicenceCo CEO, Willington Ngwepe. He said the local content commitment spend in terms of the deal terms is R20.6bn over three years.
“I don’t think people should be anxious that there will be any scaling back on local content,” Ngwepe told Business Day.
MultiChoice has long prided itself as having the biggest library of local film and television in the African countries in which it operates, but that strategy has taken on a new importance in its home market.
When the deal was first mooted it faced regulatory hurdles and resistance from internal stakeholders because the country’s regulations — under the Independent Communications Authority of South Africa (Icasa) and MultiChoice’s own memorandum of understanding — limit foreign voting rights to 20%.
To address this, the post-transaction structure created saw MultiChoice Group restructured so the holder of the broadcasting licence in South Africa and the entity that contracts with South African subscribers, MultiChoice (Pty) Ltd — or LicenceCo — would be carved out and become an independent entity.
The rest of the group’s video entertainment assets will remain part of the MultiChoice Group.
LicenceCo will continue to hold the subscription broadcasting licence in South Africa and contract with MultiChoice’s local subscribers. While it operates outside the broader group to hold the broadcasting licence, the entity relies on agreements with MultiChoice group entities such as SuperSport and M-Net for content, satellite feeds from Orbicomm and support services.
Ngwepe said priorities for the company involve bedding down the integration with Canal+ and fulfilling regulatory conditions imposed during the approval process, including local content and corporate social investment (CSI) spending commitments.
After news of its streaming service Showmax’s shutdown, a major strategic pillar is scaling the DStv Stream platform to compete with international players and capture the younger market.
Ngwepe said content produced by SuperSport also falls under this commitment. He said the spend “will remain consistent” with past levels.
Ngwepe said LicenceCo will use a combination of licensing and commissioning of content, doing “what makes sense given the financials and affordability constraints within the business”.
“At the heart of it will be to make sure that those people who have stayed loyal to the business, our subscribers, get the best value that we are able to offer, with our suppliers being a part of a bigger global company,” Ngwepe said.
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