Discussion Guide November 2015

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Discussion Guide November 2015 DISCUSSION GUIDE NOVEMBER 2015 Index: 1. Naspers Overview 2. About MultiChoice Africa 3. Introduction to MultiChoice Namibia 4. Hot topics 5. Exciting new developments 6. Corporate Social Value 7. Brands 8. Devices 9. Contact information 1 1. NASPERS OVERVIEW: Naspers Limited (JSE: NPN, LSE: NPSN) announced on 11 September 2015 that Imtiaz Patel took over from Jim Volkwyn as CEO of its Video Entertainment group. Imtiaz has been with the group since 1999 and has held various management roles including CEO, SuperSport and more recently, CEO, MultiChoice South Africa group. For more information, see http://www.naspers.com/senior-management-paytv.html 2 1. ABOUT MULTICHOICE AFRICA: As Africa goes digital and new and exciting content and services are being launched, MultiChoice Africa remains committed to provide DStv and GOtv subscribers with the best possible television entertainment delivered through superior technology and supported by world-class customer services. MultiChoice Africa Limited (“MultiChoice Africa”) is Africa’s pioneer video entertainment provider, having launched the first digital satellite service in the 1980s. The company is registered in Mauritius, and is a wholly-owned subsidiary of the Naspers Group. With over twenty years’ experience as a Pay TV operator in Africa, MultiChoice Africa offers cutting-edge digital technology and a selection of DStv and GOtv bouquets containing premium television channels for subscribers in 49 African countries and the adjacent Indian Ocean islands. It operates through a network of local partners, franchises and agents across the continent. MultiChoice Africa provides multi-channel multi-platform digital pay television services containing channels from Africa, America, China, India, Asia and Europe. The digital DStv service features over 200 video channels in multiple languages and up to 65 audio channels – with a strong focus on and investment in local content. As pioneers in pay TV to the African continent, MultiChoice Africa has played an important role in making information and entertainment easily accessible, and as an African business, its investments have brought both social and economic benefits to the communities in which it operates – through access to information, job opportunities, partnerships, corporate social investment programmes and training. 3 MultiChoice Africa provides its digital satellite television service – DStv - to subscribers’ homes from two different satellites, namely: the Intelsat 20 (“IS 20”) Ku BAND and Eutelsat 36B Ku Band. The Eutelsat 36B satellite was launched in January 2010, and has enabled MultiChoice Africa to expand its DStv services, thus a number of new channels, including High Definition, were launched. The 36B footprint covers the Sub-Saharan Africa, while IS20 covers Southern Africa. The GOtv offering is on a DTT (DVB-T2) network which was established in 2011 and currently covers nine countries. This low cost market offering provides great family entertainment at a price everyone can afford. MultiChoice Africa Organisational Structure: 4 2. MULTICHOICE NAMIBIA (MCN): MultiChoice Namibia (PTY) Ltd falls under MultiChoice Africa Limited as part of its Southern African Region territory, which comprises of Botswana, Angola, Namibia, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe respectively. MultiChoice Namibia (MCN) is the leading video entertainment provider in the country, offering viewing pleasure for all subscribers through relevant, current and exciting content on DStv and GOtv. Kalahari Holdings and MultiChoice Africa entered into a joint venture partnership to bring the magic of MNET to Namibia in February 1991. MultiChoice Namibia received its transmission license on 16 December 1991 and began broadcasting three days later from Windhoek via terrestrial transmission which soon expanded at that stage to 23 transmission sites across the country. MCN then moved to satellite broadcasting in 1995 through the introduction of DStv. Today MCN broadcasts on two technologies, Direct-to-Home Technology (DTH) and Digital Terrestrial Transmission (DTT), commonly referred to as DStv and GOtv respectively. Since its inception there have been numerous proven developments from the pioneering leader in digital broadcasting and thus ensured that Namibians have access to an array of innovative world class technologies amongst other, such as mobile television, DStv Catch Up and the DStv Explora decoder which all provide the ultimate in video entertainment. In addition to introducing new products and technologies, Namibia is a proven ground for pioneering new innovations that have and will continue to spread across the African continent. MCN was the first country in Africa to introduce the Digital Terrestrial Transmission platform and in March 2014, Namibia was the first country on the content, other than South Africa to launch BoxOffice allowing DStv Premium subscribers to rent and keep movies for up to 48 hours. Furthermore, Namibia was also the pioneer for successfully implementing MultiChoice Africa’s new payment system in 2014, which is subsequently rolled out in other territories. MultiChoice Namibia’s core social investment is making learning available to educational institutions. To date, approximately 370 schools are beneficiaries of the DStv Education Bouquet under the MultiChoice Resource Centers throughout Namibia. MCN has contributed in terms of technological advancement through broadcasting, education, supporting local artists and suppliers through product launches and roll outs. Namibians featured on the platform by way of participating and even winning major television reality shows such as Big Brother Africa, Master Chef and Survivor Africa. More recently, David Mbeha from Namibia has been chosen as one of the Top 3 finalists for TLC’s Next Great Presenter competition. The lucky winner will be the channel’s first-ever African presenter and host TLC TOP 10 – a brand new four-part series coming to TLC Entertainment (DStv 172) in December 2015. 5 At present our business is a truly Namibian entity that has in total 120 staff members. Employment creation of our business goes beyond the immediate direct employees but also includes 13 agents, 70 retailers and 110 accredited installer companies countrywide. Our accredited installers have knowledge and experience in dealing with a variety of different types of DStv installations as a result of proper training supplied by MultiChoice Namibia on all new developments to ensure they can handle all type of installations and set-ups. Accredited agents receive in-depth briefings from MultiChoice Namibia’s respective divisions on its world-class subscriber management services and digital satellite television and DTT platforms, as well as the new Clarity System which was pioneered in Namibia in 2014. 6 3. HOT TOPICS: Pricing Structures: The value offering is based on content, economic conditions and the demographics of target consumers. Worldwide, pay television services are discretionary services and depend on the acquisition and provision of entertainment (premium) channels and content that are not available elsewhere – for example on free-to-air channels. Channel suppliers charge a premium price for these channels. Sports rights and other content are acquired by pay television operators and channels through a bidding process that has the effect of escalating the final price depending on available bidders and what they are willing to pay. Consequently, pay television services are targeted at people with discretionary income, and cater for different market segments (not necessarily a single mass market) – this is the norm worldwide. MultiChoice, as a pay television operator, operates in line with international norms in pay television, and its services are both comparable and competitive. MultiChoice Namibia operates on a bouquet structure that cater for various income levels or needs: DStv: Premium; Compact; Family and Access GOtv: Plus and Value. EPL moving to the Premium bouquet: Different markets have different models for packaging sports. There are two ways to recover any type of cost – one is price, the other is scale. MultiChoice dropped the EPL to Compact in the hope to get enough subscriber scale at a cheaper price point to help cover the cost of those rights. However, the scale required to make that viable was not achieved. In order to avoid a situation for price-sensitive Compact subscribers to take a disproportionately high increase in bouquet pricing to continue to watch the EPL, the decision was made to shift the EPL back to the Premium bouquet. In the latest round of rights negotiations, the EPL rights went up 70 per cent. It was a tough impact on consumers, but looking at consumer affordability, it was felt better to offer Compact subscribers a sports package at a more affordable price point. Repeats: Programme repeats are part of the ecosystem of multichannel television. Channel providers internationally repeat movies and programmes to allow viewers to plan viewing time at their convenience. The purchasing of programme and movie rights is based on a model whereby 7 programmes and movies are purchased for a certain number of screenings. This allows for the movies or programmes to be shown at different time slots to allow viewers a choice of when they would like to access the programming. Repeats in the case of a multi-channel environment allow subscribers not to miss out in instances where two or three interesting programmes are flighted at the same time. They also
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