The introduction of Netflix services has been touted as the death knell for local TV providers. The reality is that it was sounded a long time ago, which is probably why they welcomed the newcomer.
It seems to be part of the national psyche to want to get everything for free, from somewhere to park, to somewhere to anchor your boat. Few sectors generate as much self-righteousness, however, as the telecommunications one, especially on social media.
Too many of the Maltese are convinced that they are being fleeced for sports content and for film channels, and no amount of economic arguments will ever persuade them that the fees are justified, as they constantly compare them to those overseas.
There may be an argument if there were no competition and a single operator was allowed to set prices with a ‘take it or leave it’ approach. But the reality is that there is competition – fierce competition – from illegal and irregular sources.
The harsh reality is that operators have to pay for content like sports and films and the cost has to be spread over a limited number of subscribers, since they stubbornly refuse to join forces rather than compete against each other.
This is why content prices (or medicines for all that matter) are different in different markets. They may be charged less when buying content for the local market than would companies buying it in the US – but it is rarely pro-rata.
How much do we pay? For example, for the film channel, GO charges from €6.99 a month, while Melita charges €1.49 per film on demand.
Even this is seen as too much given that you can watch almost unlimited amounts of films and series using technology like Dreambox and Android boxes, without having to worry about monthly fees at all, with hardly a twinge of conscience because it is all too easy to argue that it was the providers’ greed that “drove us to it”. Unfortunately, the dwindling subscriber base just makes it even harder for providers to invest in good content.
Telecommunications companies are not public service providers. Chipping away at their sources of revenue merely puts more pressure on them to raise more revenue from their other services, from internet to mobile to broadband.
What will happen next? Satellite and streaming has driven DVD shops out of business in droves. And cinema attendance fell from 2.6 visits a year per capita in 2006 to just two in 2011. To put this into some context, the US average was 4.5 for that year, and that of the UK was 3.1, according to Unesco.
And then along came Netflix, with its television series available in batch form and all the films you want as long as you are willing to wait a year to see them (apart from its own content).
So it is no surprise that Melita and GO both shrugged their shoulders, seeing the announcement as an opportunity instead to point out that the Netflix experience depended on the superior internet quality they offered…
Will people who bought satellite or streaming services now ditch them and decide that they don’t mind paying a monthly fee for Netflix? It seems highly unlikely. Netflix will have to compete with disruptive – and pirate – technology just as the telecommunication companies did.
Imagine if the industry – from the film-makers to the distribution channels – had read the writing on the wall before consumers walked away in disgust. The battle has been lost and it is now too late to wind back the clock.