When it happened in Nigeria, many shouted that it was not a good idea. The Nigerian regulators had put a quota on the minimum local content MultiChoice, owners of DStv and GOtv brands, must carry to be in compliance. Largely, the Nigerian regulators explained, thoughtfully and rightfully, that it was necessary to have a dose of Nigerian content in the most popular satellite TV provider in the nation. Expectedly, MultiChoice was not happy. But it went ahead, invested and complied. To a large extent, that strategy has worked well: the Nigerian content has connected the brand to many Nigerians.
More so, that government decision has benefitted some of us; DStv has run my profile in DStv Africa Magic Igbo channel many times. Of course, it was done without any coordination; possibly, they developed that program as part of meeting the local content requirements.
South Africa has received a similar playbook from Abuja: now, it was all providers to have at least 30% South Africa’s local content. This means Netflix, MutiChoice, Amazon Prime, etc, must invest in local content in the nation to stay in compliance. I am not sure it is a bad idea!
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South Africa’s government is floating a controversial new plan to force local and international video streaming services like Netflix, Showmax, Amazon Prime Video and others in future, to carry at least 30% local content in the country.
Forcing streamers to have a third of their content be local South African series and films will likely end up hurting consumers by taking away choice if these streamers, in order to comply, instead decide to downsize instead of upsize their overall ringfences offering for South Africa to comply.
South Africa’s department of communications and digital technologies does not only want to impose content quotas on streaming services. As part of its plan, it now also wants to change the existing legislation to force MultiChoice (DStv), StarTimes (StarSat) as well as subscription video-on-demand (SVOD) services like Netflix SA, Showmax, Apple TV+, Amazon Prime Video and others to collect SABC TV Licence fees that will be added into consumers’ bills from these private companies, because the SABC isn’t able to do proper licence fee collection.
About the plan to force a 30% local content catalogue quota on streamers, Collin Mashile, chief director of broadcasting policy at the department of communications and digital technologies, said: “These video-on-demand subscription services, when they come and operate in South Africa, everything that they show to South Africans in terms of their catalogue, 30% of that catalogue must include South African content.”
The draft legislation also proposes the creation of a government “team” that would be able to blacklist and block subscribers’ payments from South African banks to international streaming services like Netflix and Amazon Prime Video if streamers don’t comply with regulations.
Yes, there is another extension on that game: a laptop being used to watch Netflix could be classified as a TV, to ensure the owner buys a TV license in the nation. You need a TV license to watch a regular TV in South Africa; the country now wants to redefine what a TV means since most people do not need TV to indulge on shows, destroying revenue streams for the government. By making all laptops and smartphones TVs, you would be forced to buy a “TV license” before you pay for that Netflix or Showmax subscription!
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If we are truly in the era of stakeholders capitalism, this thing should be a given, there wouldn’t be need for legislation or any mandatory compliance.
Asking a foreign media company to have thirty percent local content isn’t too much to ask, it’s a sure way to guarantee jobs. To produce one good content, over hundred people are involved in the value chain, multiply the impact when the contents come in in their hundreds; it’s another form of wealth redistribution, with high dose of moral and legal soundness.
If we have decent humans running organisations, you cannot have a malnourished community in the midst of overfed company executives; that’s why the quality of humans we produce needs reassessment.
Interesting quandary Prof. It was sharp of you to anticipate the two possible approaches to local content inclusion. There is no obvious answer here.
‘Forcing streamers to have a third of their content be local South African series and films will likely end up hurting consumers by taking away choice if these streamers, in order to comply, instead decide to downsize instead of upsize their overall ringfences offering for South Africa’
One option involves extra investment, the other for sure would have a negative impact on customer relationship. The providers will need to understand their market really well to navigate to an option that represents the least bad balance.
Interesting also that you have picked up on the licencing issue. Globally, this kind of licencing began when European and North American countries achieved broadcast capabilities, starting with radio. licencing. Gradually this spread all over the world and evolves from time to time to sustain state licencing income in the face of challenges from new device technology or content distribution. Emerging states simply look at global licencing practice and modify from that template for a workable solution aimed at maximising income.
Generally there are two types of mechanisms – POS – a licence charge added to retail activity in device or content sales- or TLR (Term Licencing Regime), where device ownership is a matter of public record, and citizens pay via banks, the post office, or other authorised intermediaries. There is state policing of revenue gaps.
TLR tends to be premises dependant, and a licence covers any devices. Any VDU technically capable of displaying content is subject to licence whether it has a free-to-air or third party receiver technology or not. This includes laptops. In practice, they are generally not policed because TLR households will generally have more auditable devices as well.
If you travel any major trunk intercity road in Nigeria, there will invariably be ‘extra-civil’ authorities manning road blocks along the way, and one of their favourites is to demand to see ‘radio licence’!
‘The SABC isn’t able to do proper licence fee collection’ – Yes in many Emerging Economies, .TLR is not seen as a workable means of securing licencing revenue.
It would be interesting if we could get input from learners or alumni for a cross section of locations and their experiences.
^^ Sorry Prof. That was mine. I forgot I was not logged in :)
That is a perspective indeed. Thanks for this insight. Licensing is all about money and South Africa is fighting for one.