MultiChoice and its French suitor, Canal+, have told South Africa’s competition regulators that they cannot compete effectively without building its business. MultiChoice Group told the country’s Competition Tribunal that its takeover by French broadcasting giant Groupe Canal+ would give it the scale it needs to compete effectively against Netflix and other international streamers.

The Competition Commission recommended Canal+ be allowed to proceed in May, but with conditions.

The investigation is now in the hands of the Competition Tribunal, which conducted public hearings where presentations by the Competition Commission, the department of trade, industry & competition, Media Monitoring Africa and several industry players were heard before a decision is made about whether to allow the take-over to proceed.

Steven Budlender, group general council at MultiChoice, in his presentation, said Netflix and other international streaming giants use their immense scale to amortise costs more effectively, allowing for larger investments in content production, platform security and user experience.

“Scale is the way to survive, and we don’t currently have the scale we need to succeed in the new environment,” said Budlender. “They dwarf us in subscriber numbers… This directly affects … how much can be spent on things that benefit your subscribers – notably content and technology.”

David Mignot, CEO of Groupe Canal+ Africa, in his comments, said: “Although content production costs are an important factor, a growing technology ‘arms race’ in the industry requires significant investment – something that will only be possible in a combined entity with the necessary scale.”

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Tags: Canal+, multichoice