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Cape Town – South Africa's pay TV operators have rejected the compliance notice issued to them by the National Consumer Commission.
In October the National Consumer Commission ordered South Africa's pay TV companies to perform a so-called "unbundling" of their TV channels which the Commission wants them to sell individually.
Concerned pay TV insiders have told Channel24 that the Commission is misguided and asking the impossible; and that the South Africa's pay TV industry functions on the same global model for pay TV services used around the world.
"Small sardines in a tin can is one product, it's not a 'bundling' of sardines. If people buy sardines one by one they ironically will end up paying much more per sardine because it will cost more to offer them separately," said a South African pay TV executive not authorised to speak on the matter.
Internationally not done
It's currently highly doubtful that even if they wanted to, pay TV operators such as TopTV and MultiChoice wouldn't be able to secure licensing deals for the content to be sold in the way the Commission proposes, since internationally TV channels are simply not distributed in this way.
Vino Govender, CEO of On Digital Media (ODM) that runs TopTV, told Channel24 that On Digital Media intends to reject the proposal by the National Consumer Commission since it would "force us to offer consumers the ability to pick and choose the channels they want to subscribe to".
He says ODM has "taken legal steps to repudiate the commission's line of action because it threatens our business model".
He says if TopTV complies and allow subscribers to subscribe to only a few select TV channels it "could force the only pay-TV alternative to MultiChoice out of business; this will not be in the best interests of the end consumers."
Impossible model to maintain
"We have considered offering pick and mix a la carte options before TopTV launched but discovered the model made no financial sense as content providers would have hiked the cost of channels substantially. The model is also from a systems and administrative point of view impossible to maintain.
"If we remodel our product structure it will cause our business serious harm and could lead to our closure."
Govender says such a move would cost South Africa as much as 6 000 jobs nationally.
MultiChoice feels the same and has also objected to the order from the Commission.
"MultiChoice South Africa has objected to the compliance notice served on us by the National Consumer Commission," says Jackie Rakitla, the general manager for corporate affairs at MultiChoice South Africa.
"We are not in a position to respond to any questions in this regard until the matter has been resolved at the Consumer Tribunal."
In October the National Consumer Commission ordered South Africa's pay TV companies to perform a so-called "unbundling" of their TV channels which the Commission wants them to sell individually.
Concerned pay TV insiders have told Channel24 that the Commission is misguided and asking the impossible; and that the South Africa's pay TV industry functions on the same global model for pay TV services used around the world.
"Small sardines in a tin can is one product, it's not a 'bundling' of sardines. If people buy sardines one by one they ironically will end up paying much more per sardine because it will cost more to offer them separately," said a South African pay TV executive not authorised to speak on the matter.
Internationally not done
It's currently highly doubtful that even if they wanted to, pay TV operators such as TopTV and MultiChoice wouldn't be able to secure licensing deals for the content to be sold in the way the Commission proposes, since internationally TV channels are simply not distributed in this way.
Vino Govender, CEO of On Digital Media (ODM) that runs TopTV, told Channel24 that On Digital Media intends to reject the proposal by the National Consumer Commission since it would "force us to offer consumers the ability to pick and choose the channels they want to subscribe to".
He says ODM has "taken legal steps to repudiate the commission's line of action because it threatens our business model".
He says if TopTV complies and allow subscribers to subscribe to only a few select TV channels it "could force the only pay-TV alternative to MultiChoice out of business; this will not be in the best interests of the end consumers."
Impossible model to maintain
"We have considered offering pick and mix a la carte options before TopTV launched but discovered the model made no financial sense as content providers would have hiked the cost of channels substantially. The model is also from a systems and administrative point of view impossible to maintain.
"If we remodel our product structure it will cause our business serious harm and could lead to our closure."
Govender says such a move would cost South Africa as much as 6 000 jobs nationally.
MultiChoice feels the same and has also objected to the order from the Commission.
"MultiChoice South Africa has objected to the compliance notice served on us by the National Consumer Commission," says Jackie Rakitla, the general manager for corporate affairs at MultiChoice South Africa.
"We are not in a position to respond to any questions in this regard until the matter has been resolved at the Consumer Tribunal."
