On Monday, the Competition Tribunal heard eMedia’s application for interim relief against MultiChoice’s decision to drop the eMovies, eMovies Extra, eExtra and eToonz channels from its DStv packages.
The broadcaster planned to suspend these channels from its service at the end of March 2022 but delayed the removals by two months after E-tv decided to take the issue to the Competition Commission.
eMedia Holdings legal counsel Tembeka Ngcukaitobi argued that MultiChoice’s decision amounted to a dominant player refusing to supply a scarce service, in contravention of the Competition Act Section 8. The company believes it will lose as much as 19% of its advertising revenue should the channels be suspended.
In his opening arguments on the matter, Ngcukaitobi stated that MultiChoice did not justify its decision during negotiations or in response to a letter of demand from eMedia.
MultiChoice had only stated the decision was based purely on commercial considerations.
It was only in its first answering affidavit to the case brought before the Competition Tribunal that MultiChoice elaborated. Initially, its rebuttal included that it had satellite capacity constraints.
MultiChoice said it had to cut eMedia’s four channels so it could accommodate three yet-to-be-launched SABC channels that it must carry under the changing legislation.
Ngcukaitobi also stressed that DStv doesn’t have to carry SABC’s additional channels immediately, but only sometime in the future following negotiations with the SABC.
A year ago, SABC officially unveiled their sports channel SABC Sport and a year prior SABC Education. On LyngSat, they registered three channels SABC Parliament, SABC Children and SABC Encore. Could any of these 5 channels be making their way to DStv?
SABC Encore has been rumoured for over a year as the public broadcaster offers it on DTT to broadcast sports and other events that weren't seen in the version that was made available on DStv. On top of the fact that the public broadcaster hoped to revive the channel.
SABC Education was meant to be on DStv and rival platform StarSat but the SABC was stalling so both brands removed further info about the channel on their website and i-Plate respectively.
The public broadcaster plans to launch more channels in the near future alongside a streaming service where these channels alongside SABC 1-3 will be available to stream.
Aside from DStv, the public broadcaster still has to launch a further two channels on the Openview platform as promised in 2021.
E-tv needs DStv
eMedia contends under the prevailing market dynamics, its channels were dependent on DStv to remain competitive. Ngcukaitobi argued presence on the DStv platforms allows E-tv to maintain customer contact, generate advertising revenue, and ensure a high-quality broadcasting service.
The company has also argued that carrying the four E-tv channels was economically feasible for MultiChoice, as eMedia provided them for free, and two were in DStv’s top 10 most popular channels.
MultiChoice’s other reasons for denying a carriage renewal agreement included that the channels did not meet its strategic objectives for local content, black empowerment, value propositions, and its aim to decrease the frequency of repeats.
Ngcukaitobi said MultiChoice’s claims that the decision was based on E-tv not meeting DStv’s strategic objectives were “contrived”.
He argued two of the four channels were sharply focused on local content, while eMedia was a majority black-owned business. He also maintained MultiChoice had not provided evidence it would replace the channels with other offerings that met its criteria.
Ngcukaitobi surmised that MultiChoice’s action was done from a desire to inflict harm on a potential rival by undercutting its revenue.
