It’s been a long day, and you finally decide to just zone out in front of the television and unwind. You start with your favourite channels and then proceed to lesser favourites in the hope of catching something that you find mildly entertaining. For R529 pm (DSTV premium subscription) and a multitude of channels promising the very best in entertainment, you would expect to find something interesting to watch whenever you switch on the telly. Yet, time and time again, all one finds is a multitude of choice with no real options!

I am certain that I am not alone with the above experience but this is not the forum to discuss such gripes. Rather is it completely relevant to discuss the recent DSTV offering, BoxOffice – but I would like to briefly state my opinion on this new product. BoxOffice is an on-demand movie rental service but it is only available to DSTV’s PVR subscribers. That means that if I wanted to use BoxOffice, I would have to firstly upgrade my decoder and then pay an additional subscription of R65 pm. Only then would I be allowed to rent out the ‘latest’ movies (R25 for a 48 hour loan). It does not take an actuary to ascertain that this makes no financial sense unless of course you are already a PVR subscriber and you happen to find a movie on offer that you meant to watch on circuit but never got around to. As a premium DSTV subscriber, I would expect the latest movies to be on offer with my current bouquet and simple economics dictate that if a movie is popular on BoxOffice, it is going to be a long time before it is available on DSTV.

The reason for this post is the announcement from John Kotsaftis, CEO of DStv online, that BoxOffice, or a service like it will be launched online by the end of 2011 and that it was launched on satellite first due to South Africa’s broadband constraints. This new service will not only be available to DStv subscribers but to all South Africans. Firstly, this is encouraging news. Multichoice believe that by the end of the year, South Africa’s ‘broadband constraints’ would not be as limiting. With the recent announcement of the MTN LTE pilot and the ongoing broadband pricing wars, this is perhaps a fair assumption and I am sure most of us would agree that it’s about time. However, I think DStv may want to take cognisance of one factor before embarking on this venture. Reality.

If broadband prices are reduced considerably, it would still only be economically viable to download encrypted movies if you have an ADSL line. I doubt that cellular data costs would ever drop as low as those offered to ADSL customers, but I would be pleased to be proven wrong in this instance. This implies that the user would have to add the cost of downloading the movie to the price charged by the service provider, and bear in mind that these movies are typically larger than 1 GB. Furthermore lower bandwidth costs and faster speeds could result in many choosing to rather just download movies from international websites (you know the type) thereby saving the subscription fee to the service provider and removing sharing and time restrictions that would be otherwise imposed. I intend to neither justify or condone this option but wish to merely point out there is a strong liklihood of it occurring.

Another point for the brains at DStv to consider is that after paying to watch a movie, most people would be frustrated if they are forced to watch the movie on their Laptop screens. They would therefore need to either have the ability to connect their laptop up to their TV or use a dedicated media player. How this player would have the ability to play the encrypted video is anyone’s guess? The pricing would also have to be very competitive, if the intention is to get people who watch movies at home to suddenly stop going to their DVD store but to rather get a movie from this new service. Seems like a lot more inconvenience for very little (if any) benefit.

Companies at the forefront of this type of offering internationally (Netflix, Blockbuster) do not only focus on streaming VOD (Video on Demand) but have other offerings like DVD by mail delivery. Although recent Netflix pricing changes appear to be encouraging subscribers to use the streaming feature rather than the mail option, this has been met with severe criticism from subscribers. Furthermore whether such a mail delivery system would work in South Africa is debatable, especially if one considers the decision by Amazon to no longer ship goods to SA via the South African Post Office.

Many Apple users already have access to VOD via the US iStore and the cost of hiring a new release is typically $4 with a vast library of other movies available either for sale or for rent at a reduced rate. I cannot see a future where the proposed business model for BoxOffice VOD via broadband makes sense. So for now, I’ll keep watching my blockbusters at the movies (where they can be truly appreciated) and the Discovery channel late at night.

Update: The Undecided Future of My Television

Right folks, just when you thought the group buying industry in South Africa had a clear path till the end of 2011, along comes LivingSocial, the second biggest group buying site in the world. I mentioned before in a post that they have their own trademark and have their domain in South Africa, and now they’ve started advertising with Google PPC and Facebook:

Currently their site leads a subscriber from Cape Town to their Sydney page, though, and that shows a somewhat uncoordinated launch – I was expecting a deal from LivingSocial waiting for me. Perhaps they have deals coming soon, and maybe they are merely creating some buzz before they launch in a bigger sense later?

Still, being in the industry, one does not hear about LivingSocial – no small business has mentioned their name, no salespeople have been seen online and nothing really forward has been mentioned overseas. The hints have been subtle, until now that is. (Update: Job advert posted one month ago.)

So why is this such a big deal in the group buying industry? Well, have a look at this graph to see that they almost have as much traffic as Groupon, which is slowly suffering more and more leading up to their (now already infamous) IPO. LivingSocial themselves are rumoured to be doing an IPO in the not too distant future.

Another reason to perk up your eyebrows and have another look is this deal, which is perhaps the largest single sale in the history of the Internet – done via Amazon on LivingSocial’s site.

It would seem that them entering South Africa is going to follow one of two routes: Either they have bought a group buying site and will launch through them, or otherwise they are just garnering subscribers and building their own branch of LivingSocial here in SA.

The group buying market here in South Africa is quite far down the road, so can they really enter now, even if they are so big? What do you think – do they have a future here, having entered the market so late?

Many of you have possibly heard of Google Offers, a group buying division of Google, which, along with Facebook Deals, has had very little written about them after their the initial mention a few months back. The reason for this is mainly that Google Offers is still outside South Africa, and in fact only in a few cities in the US.

After a failed attempt to purchase Groupon (perhaps Groupon should have accepted this offer), Google went their own way and decided to tackle the daily deals arena themselves. After all, Google has massive reach and the ability to enter the market globally at lightning speed, faster than Groupon. Right?

Well, so one would think, and there are many reasons why they should, yet thus far they still haven’t. Why not? Some more about Google’s group buying service.

Advantages
- Google has enormous reach worldwide, in both the number of people that visit its various sites and search engine, and in that it also has major clients who use it daily.
- There is a rumour of firms being able to construct their own deals online without Google having to do anything, and hence a lower commission percentage charged. So far, however, Google has hired sales people to bring in deals, and I haven’t seen this part yet
- Google Offers pays businesses part of their portion upfront (we hear 80%) and part after 60 or 90 days. This is regardless of how many coupons are redeemed. That is mighty fair, considering what is going on in South Africa. Read more about group buying payment schemes on this post too.
- Customers and merchants have the knowledge that this isn’t another group buying site about to go bust.
- Payment, support, etc should all work well (although who knows – the Google Offers team is rumoured to be under 30 people strong at the time of writing
- Google will eventually “distribute” deals to consumers through many other channels in addition to email, including search ads, display ads, Android phones, Google Wallet and “Places” pages.

Disadvantages
- The service is new and only in a few cities in the US. Other group buying sites such as LivingSocial.com (www.livingsocial.com) are already in a few continents and numerous countries.
- If it becomes self-service, adding your own deal not only takes time, but admin and also makes it possible for poor deals to enter the system, no matter what the constraints

One merchant canvassed by Google Offers understood that using them would increase search engine rankings, but it seems this is untrue and doesn’t bode by Google’s mantra at all.

In the beginning, if Google Offers is to become a big force in the deals space, Google is going to have to hire thousands of salespeople. According to Google’s Eric Rosenblum, the Google Offers top dog, Google intends to deal with the “salespeople problem” by making the Offers product as much of a self-serve solution as AdWords. As mentioned above, the company’s hope is that merchants will eventually do most of the work, and the company won’t need so many salespeople.

Why doesn’t Google just stick to getting the deals sold on other sites by charging for PPC campaigns? Perhaps a Google group buying aggregator site like AllDeals or Yadda would bring in only slightly less revenue for a lesser investment? Is Google just barking up yet another tree here?

This just in. MTN is about to rollout their new high speed LTE network. This is great news in SA’s current very competitive broadband space – but LTE is a newer wireless internet standard which has not been rolled out at this scale in SA yet.

However the final speeds are still a big improvement over existing wireless broadband solutions, but the biggest improvement is in latency, with around 20ms times. Compare this to current high speed HSPA+ connections, which typically do not get faster than 60ms. This will of course be beneficial for people who like their online gaming, but also for things like VoIP.

These new fibre backed network clusters only have around 600 meters coverage per antenna, which means that a significant effort is required to roll out this service, and it will not be available everywhere at first (in other words, typically city areas).

But here is the full scoop:

Today MTN announced the launch of a Long Term Evolution (LTE) pilot in five clusters around Gauteng that will revolutionise the provisioning of broadband services in South Africa.

The LTE rollout and pilot test, which MTN is undertaking in partnership with Huawei and Ericsson, will see selected MTN customers with provisioned dongles reaping the benefits of navigating on an ultra-high speed network that boasts speeds of up to 70Mbps across over 100 sites (more…)

Recently I had the privilege of meeting with Donna Stephens, Head of Marketing & Customer Service at eRetailer TAKEALOT.com (previously knows as Take2). We met to discuss :

1) A name change,

2) The public disclosure of the ambitious goals at TAKEALOT.com

Based on this discussion I thought it a good idea to present a perspective related to how well TAKEALOT.com is positioned to achieve these goals.

Some context:

In October 2010 Cape Town based e-retailer Take2 was co-acquired by Kim Reid (former Naspers senior executive) together with New York based hedge fund, Tiger Global Management.  The tripartite partnership seems to have the internal equilibrium needed to change the landscape of e-retailing not just in SA but in Africa. The acquisitions fit neatly into the [assumed] strategy of Tiger Global Management who have more than US $ 9.5billion under their control and who have been steadily investing in emerging market internet-related businesses.  Kim Reid seems the ideal candidate to man-ship given his considerable depth of experience with the Naspers owned MIH Group, no stranger themselves to investing in emerging internet-related businesses.  Then there is Take2, a company started by seven investors in Cape Town in 2002. Take2 quickly moved to the position of SA’s second  biggest online retailer, selling books, DVD’s, games, CD’s electronics, toys and much more … with what I am told is a very loyal consumer base.

On announcement of, without doubt, very ambitious goals the media responded with what could be best describe as ‘stoking the fire,’ perhaps to determine just how much of a threat TAKEALOT.com represents to established and market leading e-retailer Kalahari.net.  After-all there is an old saying that goes: ” If you try to steal the giants lunch, the giant is likely to eat you for lunch.” In this case I assume that by announcing the following goals…. (more…)

Afrihost was started in mid-August 2000 by Gian Visser, Brendan Armstrong and Peter Meintjes while Greg Payne joined the company in 2005 as a director.

In its first year Afrihost signed up around 300 customers and generated R450,000 in revenue. Since then the company has grown to over 50,000 clients and raking in over R100 million per annum. Wow.

Afrihost CEO Gian Visser says that the foundation of their success is the passion of their team. “It’s all about giving back – to both our clients and our staff. We are passionate about delighting our clients and the only way we can effectively do this is through our people”. You might know Gian from Twitter, where Afrihost regularly holds competitions, which are very popular.

A rogue computer reseller who sold pirated software to unwitting consumers in Port Elizabeth and Johannesburg has been handed a suspended prison sentence and ordered to pay compensation to his victims.

Computer shop manager Vikesh Singh, who traded as PE Technologies in Port Elizabeth and later as Vision Technologies in Johannesburg, was found guilty in the Specialised Commercial Crime Court in Port Elizabeth on June 15 of fraud and multiple contraventions of the Counterfeit Goods and Copyright Acts for selling counterfeit and unlicensed copies of Microsoft software.

Singh also pleaded guilty for contravening the Companies and the Close Corporations Acts by acting as a manager while disqualified, as he had previously been convicted of theft.

He was sentenced to six years’ imprisonment, suspended for five years, provided he doesn’t contravene the Counterfeit Goods Act or the Copyright Act. He was also sentenced to a fine of R80 000, or four years’ imprisonment conditionally suspended for five years, for contravening the Companies Act and the Close Corporations Act.  Singh was also ordered to compensate four customers, who had been sold counterfeit Microsoft software and acted as witnesses in the criminal case, three times the value of their purchases, and ordered by the court to pay compensation to Microsoft of R150 000. (more…)

We have spoken in the past about RICA, and well, the time has come. You really should have RICA’d by now. The process is pretty easy – just take your SIM Card (regardless if its a cellphone number or a 3G card), proof of address and ID with you to your preferred cellular provider. You dont have to go your own network, in fact many retailers are also taking part in the initiative. The whole process takes about 5 minutes at most, and it will prevent you from getting your number cut off on the 1st of July. Just a friendly reminder from us…

Find attached the statement from the Department of Communications.

The Department of Communications appeals to all South African citizens to register their SIM cards whether they are cellular, data or other SIM cards used for mobile devices.

The Regulation of Interception of Communications Act (RICA) provides for the lawful interception of communications, such as voice and data conversations between persons including phone calls, emails and postal services. This Act is in the interest of the individual’s right to privacy and can only be done after authorisation by a judge who is specially designated to carry out this role or function. RICA is applicable to both prepaid and contract subscribers and it is obligatory for all cell phone and other data users to comply.

The Department of Communications calls for all SIM card users to go to their mobile service providers with their proof of residence and Identity Documents (IDs) before or on 30 June 2011 for registration.

“Failure to comply with the deadline will result in SIMs being locked. Those who have not registered will not be able to make or receive calls and will not be able to send SMSes or use data,” states the Deputy Minister of Communications, Mr Obed Bapela.

Issued by: Department of Communications
13 Jun 2011