Tuesday, June 16, 2009

Torrents versus TV

While South Africans are waiting for competition in the pay-TV market, many tech-savvy individuals get their TV series and movies elsewhere.
South Africa’s television market is not particularly vibrant. The country’s state broadcaster, the SABC, is in serious financial trouble and MultiChoice’s DStv remains the country’s only pay-TV service. While four pay-TV licenses were handed out by ICASA in 2007, the new providers have yet to launch a fully-fledged pay-TV competitor to MultiChoice.

DStv has strong support in South Africa, and has a particularly compelling programming line-up in sports, movies, documentaries and news. Their experience in the broadcasting market and long term content contracts will make it difficult for a competitors to take them on, but the company is facing competition from a new rival: File Sharing and the Internet.

It is common knowledge that more and more people are turning to the Internet for their entertainment needs in place of watching television. A 2007 survey showed that the overall online viewership rose to over 80% for US adults.

According to Alexa, a measurement engine of website popularity, YouTube is the third most popular website in the world. Hulu, a free online video service that offers streaming TV shows to visitors, has shown a 490% increase in total streams year-over-year.

Even in South Africa where the broadband penetration level is significantly lower than in the developed world YouTube is still the fifth most popular website in the country. The popularity of websites like YouTube and Hulu and the strong growth in online entertainment services gives a strong indication that the convenience of video on demand and the sheer amount of video content online make the Internet an attractive alternative to traditional television.

The biggest threat to television may however not come from official online entertainment channels like Youtube and Hulu, but rather from file sharing services like LimeWire and BitTorrent. Users will typically download full series consisting of numerous episodes and watch them at their convenience.

Broadband users can download movies and television series free of charge using peer-to-peer services, and despite copyright concerns this has become a very popular and convenient way to access content.

A recent statement by the UK Creative Industries estimated that the impact of illegal file sharing is so severe that that it is threatening nearly 40% of all jobs in the creative industries.

Bandwidth pricing and restrictive monthly usage limits, associated with local broadband services, limits the full impact of P2P file sharing in South Africa, but many individuals use portable drives and free wireless networks to share their content for free. A single TV series or movie download can now be shared with friends without the need to use up costly Internet bandwidth.

Apart from the benefit of being able to watch a television series when the user finds it convenient, other benefits include the absence of advertising and the ability to watch all episodes at once rather than waiting a week for the next episode as is usually the case with traditional TV. Another advantage for South Africans using downloaded series and movies rather than traditional channels is that they will gain access to material typically not released in South Africa yet.

To facilitate ease of use specialized equipment exists, like the Iomega ScreenPlay TV Link, which allows users to plug their USB drive or portable HDD directly into the device and play their encoded content through their television without any hassles.

While content producers, television channels and media houses are actively fighting illegal file sharing and copyright infringement, the widespread use of file sharing services means that it is a battle which is nearly impossible to win.

Instead of fighting this indomitable wave of file sharers, some companies are embracing the Internet to distribute their content.

Hulu, a website that offers commercially-supported streaming video of TV shows and movies from various networks and studios, is a good example. Closer to home MultiChoice’s DStv on Demand PC provides DStv premium subscribers access to previously aired content from channels like Supersport, MNet and KykNet.

In South Africa Internet usage and broadband access is still poor, but a growing number of people are making use of file sharing to watch their favourite television shows and the latest movies. Traditional television services may be forced to adapt their current business models to ensure that they don’t lose viewership.


No comments:

TPA Archive