Multichoice must innovate or perish

They have chosen to engage in a tricky tech war, a classic case of bringing a knife to a gunfight. While they may win the legal battle, if they don’t adapt to the rapidly changing world of automation, they will definitely lose the tech war.

BY DENNIS NDIRITU

Pay-TV service provider MultiChoice has announced its intention of suing Safaricom and Jamii Telecom over copyright infringement. MultiChoice wants the court to compel the two telco firms to block access to websites streaming matches pirated from its Super Sport channels. 

Citing Section 35B of the Copyright (Amendment) Act 2019, Multi Choice are relying on the Copyright obligation on Internet service providers to take down any infringing content within 48 hours of being served with a takedown notice, thus accusing Safaricom and Jamii Telecom of ignoring a takedown notice dated October 29. It is Multichoice’s assertion that “the rebroadcasting, retransmitting or replicating the exclusive content of themselves without their authorization is a breach of their rights, unlawful and causes irreparable economic loss to themselves, not to mention other losses and evils that piracy perpetrates,”

It is no doubt that the landmark case is set to challenge the effectiveness of the newly enacted Copyright Act 2019 in addressing such potent copyright disputes. This suit arises following the enactment of the Copyright (Amendment) Act in September 2019, which provided regulators with wider legal mandate in administrating legislation on copyright and intellectual property. Under Section 35B, a person whose rights have been infringed by content to which access is being offered by an Internet service provider may request, by way of a takedown notice, that the Internet Service Provider (ISP) removes the infringing content. The ISP is then expected to provide the person responsible for uploading the copyright-infringing content with a copy of the takedown notice and disable access to the same within 48 hours, unless a counter notice objecting to the takedown is filed.

This case brings into focus the ever-revolving door of technology on business in Kenya. While legal pundits have praised the move by multi choice, seen as creating good jurisprudence on enforcement of the new Act, tech pundits have dismissed it as offering a temporary solution to much deeper problem of viewership. Kenya has been rated third in illegal English Premier League Streams worldwide, clearly pointing to a wide untapped and frustrated viewership market, which Multichoice, instead of tapping by making the market accessible, has chosen to get a legal solution to remedy the problem. 

Statistics from the Kenya Bureau of Statistics indicate that 46.5% of the working population in Kenya earn below Sh30, 000 a month. Multichoice have 5 packages, DSTV Premium with 127 channels at Sh7, 500, DSTV compact plus with 111 channels at Sh4, 500, DSTV Compact with 104 channels at Sh2, 500, DSTV family with 85 channels at Sh1, 200 and DSTV Access with 69 channels at Sh900. Out of these, a full enjoyment of all sporting channels is only viable through the pricy DSTV Premium channel. To the common sports loving mwananchi, this is way beyond the masses and can only be afforded by high cadre employees and entertainment joints such hotels and clubs keen on tapping on this frustrated clientele. Coincidentally, this has been followed by reduced cost of and increased penetration of the Internet in the country. As such, the influx of cheap and free live streams, which only require availability of stable Internet for viewership was bound to develop. 

The warning shot was fired a decade ago when pay television company GTV was awarded the rights to transmit all premier league matches. Kenyans, who found the channel very affordable as opposed to the costly Multichoice premium package received this with a lot of celebration. Unfortunately, GTV Kenya had to cease operations in 2009, after the board of directors of its parent company, Gateway Broadcast Services (GBS), approved a plan to liquidate the company following the global financial crisis. The pay television network left thousands of subscribers, including many English Premier League fans disappointed. 

GTV had used its exclusive rights to broadcast English Premier League matches to gain a following in Kenya and its closure provided a huge relief to Multichoice who once again regained dominance of sports TV in Kenya. 

Hussain Fakhrudinn, a technologist notes that it is an uncontested fact that the ability and willingness to innovate play big roles in determining whether a company or a brand, no matter its strength at a given point in time, will be able to survive in the long-run. The basic business models and way of operations in practically every industry keep evolving, with many instances of big companies not being able to keep up with the changes, going out of business. ‘Innovate or die’ has become the watchword for businesses across the globe. 

Many famous companies from earlier decades have failed to integrate that elusive ‘innovation culture’ in their working, and have ceased to be relevant at present. Interestingly, the importance of ‘innovation‘ is not only limited to the information technology business as several governmental and social projects have failed for not being proactive enough. 

This may be the same route Multichoice is headed if it does not accede to market demands. Initially, Multichoice had been seen to be adapting to this change wave after it unveiled a new mobile device dubbed ‘Walka’ in Kenya under its Dstv Mobile product that would be used by subscribers to watch their favorite channels on the go. Dstv Walka consisted of a handheld device capable of receiving DVB-H mobile television signals available in Mombasa and Nairobi, and would enable viewers to receive live television broadcast on a 3.5inch display panel within the coverage area. 

With pay television business in Kenya becoming more competitive by the day, especially with the migration from analog to digital broadcasting, the battle to control Kenya’s pay television segment was bound to increase. It is this realization that forced Dstv Kenya to introduce “affordable packages” that would see its grip in the sector stay put. Dstv subscribers in Kenya using the Walka gadget were able to watch free-to-air channels such as K24, KTN, NTV and KISS TV plus additional entertainment channels on its pay per view list. Monthly subscriptions for the Dstv Walka product were Sh385 for 11 channels and Sh990 for 15 channels; however, viewers were required to purchase the Walka kit at Sh10, 000, a huge contradiction to its clamor for affordability. Sports pundits have argued that DSTV’s move to acquire exclusive sporting rights in local tournaments is to blame for the unfriendly business environment witnessed by its competitors and the increase in alternative free to air links. 

DSTV’s move to acquire exclusive sporting rights in local tournaments is to blame for the unfriendly business environment witnessed by its competitors and the increase in alternative free to air links

In the entertainment industry, as consumer tastes and demands changed, the movie industry had to scramble to adapt. Instead of surrendering to existential dread, studio chiefs and exhibitors had to show a greater willingness to experiment, particularly in configuration of release of movies. This was attributable to the fact that younger audiences were becoming more interested in streamable content that is accessible on their iPhones, tablets and other portable devices. Essentially, the zeitgeist was continually shifting from the big screen to the small screen. This has informed creation of online platforms such as Netflix and Showmax where the audience can continually access movies at a fee per month. Perhaps Mutichoice can adopt no better alternative than this. It could be time they created an application for specific viewership of sports at a very reduced cost subscribable per month and which is compatible on portable devices such as tabs and phones.

In July 2019, Sky chief executive Martin Stewart unveiled the pay TV Company’s revamped sports offering, including an enhanced streaming service. From August 1, Sky was set to have 12 HD (high definition) sporting channels, with dedicated homes for rugby, cricket, golf and football, as well as a new sports news channel. All the channels would be available on Sky Sport Now, the streaming app that was set to replace Fan Pass, which only offered four. Just like Multichoice, Sky sports had initially been faced with the problem of illegal streams of its sporting channels. This was understood to result from a busy workforce that was interested in watching sport at the comfort of their portable devices together with the pricy cost of subscription. 

Sky Sports were forced to innovate and introduce live stream options on their website at an affordable fee thus tapping on this wide market. With weekly, monthly and annual price options, Sky clearly raised its game and was ahead of any likely competition. Sky Sports did not seek to fight this new revelation but adapted to it, finding an accommodative way around this problem.

Multichoise have chosen to engage in a tricky tech war. This is a classic case of bringing a knife to a gunfight. While they may win the legal battle, if they don’t adapt to this rapid changes, they will definitely lose the tech war. 

It would be advisable for Multichoise to assert themselves and not engage in this subtle business of “losing rights,” being prepared to do what needs to be done to retain its market. They must welcome the competition and look at global and local benchmarks and the realities of life in Kenya with focus on what people can afford and come up with a compelling offer, priced at a level that provides good value, a return and that allows customers to truly be happy. This is the only way out.  

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