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Economy

Zuku asks watchdog to penalise DStv in content sharing row

Nairobi residents at a pay-TV exhibition stand in Nairobi. Zuku operator has asked the competition watchdog to fine MultiChoice for withholding content. Photo/FILE
Nairobi residents at a pay-TV exhibition stand in Nairobi. Zuku operator has asked the competition watchdog to fine MultiChoice for withholding content. Photo/FILE 

The operator of Zuku pay- TV has asked the competition watchdog to impose a financial penalty on DStv for refusing to re-sell some of its exclusive content like the English Premier League to its rivals.

Wananchi Group, in a letter to the Competition Authority of Kenya (CAK), accuses MultiChoice, the owners of DStv, of abusing its dominance and curbing the growth of other pay-TV operators.

It wants the competition watchdog to compel DStv to re-sell some of its exclusive content and impose a financial penalty, which can be up to 10 per cent of a firm’s annual sales, on the South Africa firm.

The authority is yet to make public its enquiry that sought to establish whether or not DStv had unwarranted concentration of economic power that locked majority of pay- TV viewers to its network and ultimately made it difficult for other players to break even.

“We invite the authority to declare MultiChoice practice of having exclusive rights on content and denying access to other pay-TV retailers as a prohibition of Section A of part III of the competition Act,” reads a letter to the Competition Authority of Kenya (CAK) dated June 30
“Impose financial penalty against MultiChoice as a deterrent against engaging in such practices in future,” added Wananchi in the letter.

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Wananchi reckons that MultiChoice currently controls 95 per cent of customer market share in the pay TV market and can be defined as a dominant operator.

It says Dstv has made it difficult for Zuku to get a share of the premium market and is squeezing Wananchi at the bottom end of the market.

MultiChoice has products targeted at all segments of the market and is using exclusive content like the English Premier League to cement its dominance of the top end of the market.

The firm has maintained a stranglehold on the region’s pay-TV segment for the last 20 years, managing to win a loyal following of about three million subscribers in several African markets.

Entrants into the segment say the incumbent is monopolising content thereby hampering the growth of the industry. Two operators – Smart TV and GTV – have closed shop after failing to gain market share.

Wananchi accuses MultiChoice of going to the extent of interfering with rivals’ innovation.

Wananchi claims MultiChoice mid last year withheld its sponsorship to Kenya Premier League on grounds that AFC Leopards football club had signed a deal with Zuku for airing of a weekly magazine.

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