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‘Exclusionary conduct’ Channel owner accuses MultiChoice bullying, lists demands

Brands & Marketing

‘Exclusionary conduct’ Channel owner accuses MultiChoice bullying, lists demands

The presentations before South Africa’s Competition Tribunal started on Monday in the TV channels carriage war between MultiChoice and eMedia Investments over eMedia’s channels that the pay-TV operator decided to dump from DStv.

eMedia is seeking a 6-months interim relief order from the Competition Tribunal, pending the final determination of its complaint before the body.

While MultiChoice decided not to renew its contract with eMedia for the eMovies, eMovies Extra, eExtra and eToonz channels, MultiChoice has kept those channels on DStv for the time being while the case is being heard before the Competition Tribunal.

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eMedia also carries these TV channels on its own, free-to-air satellite platform and service Openview.

eMedia has taken MultiChoice to the Competition Tribunal and is arguing that MultiChoice’s behaviour is uncompetitive and damaging its own revenue potential through its so-called “exclusionary conduct”, with allegations that MultiChoice is abusing its market dominance position.

eMedia wants the Competition Tribunal to prevent MultiChoice from dropping the eMovies, eMovies Extra, eExtra and eToonz channels from its DStv bouquet. The contract has however lapsed since MultiChoice first signed a channels carriage contract with eMedia in 2017.

eMedia told the Competition Tribunal that in its view MultiChoice has “no rational justification” for dumping its TV channels from DStv and that the move will damage its advertising revenue potential, channel and content growth, as well as broader market access and penetration.

eMedia in its submission alleges that “MultiChoice’s foreclosure decision is motivated by anti-competitive objectives” and that it is nothing else than “a desire to exclude some of the most popular immediate entertainment channels from the DStv platform and thereby undermining eMedia’s ability to broadcast and produce rival content in competition with DStv’s own content channels”.

MultiChoice on the other hand alleges that the pay-TV operator has decided not to renew the channels carriage agreement with eMedia because of legitimate commercial reasons and that it had to cut eMedia’s channels to make space for at least 3 new TV channels from the SABC that MultiChoice will be compelled to carry on DStv as part of changing legislation.

MultiChoice also alleges that eMedia’s TV channels don’t meet MultiChoice’s strategic objectives for DStv around things like local content, black economic empowerment, value propositions, and a drive to cut down on repeat and rebroadcast content for DStv subscribers.

eMedia says MultiChoice has enough transponder capacity to carry both the set of existing channels as well as the SABC’s channels on the Intelsat IS-20 and Intelsat IS-36 satellites. MultiChoice disagrees.

eMedia says that eMedia gets substantial advertising revenue because its channels were carried on DStv. Since these TV channels have broader carriage on DStv and therefore have more viewers, can make more in TV commercials.

eMedia told the Competition Tribunal it believes that it could lose as much as 19% of its existing advertising revenue if MultiChoice removes its TV channels.

eMedia says that MultiChoice which wants to dump its set of channels is preventing eMedia from “competing effectively as a channel provider” in South Africa.

It will also make it more difficult for advertisers to reach the market segments of viewers reached by eMedia’s TV channels currently.

MultiChoice is allegedly “leveraging its dominance in the pay-TV market to prevent effective competition with rival channel providers such as eMedia, with the intention of increasing its share of television advertising spend on its own channels, with the ultimate objective of undermining eMedia as a competitor”.

MultiChoice is arguing that even if it no longer carries the channels from eMedia, it doesn’t mean that MultiChoice will be taking over and absorbing the available advertising revenue that used to go to eMedia.

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