The past week has seen a startling contrast in the fortunes of two entertainment giants as technology transforms both TV viewing and the business of broadcasting.African pay-TV giant MultiChoice announced that two sections of the business would be realigned in response to the changing behaviour of its customers, who "are increasingly moving away from traditional voice calls and visits to walk-in centres and adopting new self-service and digital technologies to engage with the company".The announcement came on the heels of the MultiChoice Group announcing R50bn revenue and strong subscriber growth in its maiden results as a JSE-listed company. However, the stellar results for its year to March 2019 masked the slow erosion of its Premium subscriber base by global video-on-demand giant Netflix.The US-headquartered service this week began producing its second original South African series, Blood & Water, in the Johannesburg area. It follows Netflix's acquisition of the South Africa-made original series Shadow, and the start of shooting of the first Netflix-commissioned local original, Queen Sono.Both original series will only air next year, but Netflix has meanwhile established a firm foothold in SA, with an estimated local subscriber base of between 250,000 and 500,000. A high proportion of these subscribers would have defected from the Premium package on MultiChoice's DStv. For most viewers, it is simple economics: DStv Premium typically costs R809 a month, along with a R90 "access fee" for DStv's personal video recorder service. The Netflix Premium service, which can be shared across four screens simultaneously, and includes high-definition (HD) and ultra-HD options, is R169 a month.DStv's extensive offering of live sports, conspicuous by its absence on Netflix, is its saving grace. For fans of live rugby, cricket and English Premier League football, there is little alternative. DStv this month also started experimenting with live sports on its video-on-demand service, Showmax. Subscribers to DStv Premium and lower-cost Compact services can also access DStv Now, an app for streaming live programming via smartphones and tablets.However, a 30-day free trial offered by Netflix provides ample opportunity to discover the global binge-watching obsession. Netflix releases complete seasons of its series simultaneously, breaking the traditional mould of "linear viewing" that defines old-style TV broadcasting.Netflix CEO and co-founder Reed Hastings told Business Times earlier this year that his company had no intention of replacing MultiChoice in the market. "Their subscriber growth is steady in SA," he said. "They serve a need that's independent of the internet, via low-price satellite. There is no intention of capturing that audience. If they're growing, it's because they serve a need."However, MultiChoice CEO Calvo Mawela this week made it clear that Netflix was in his crosshairs."We believe we are maintaining our competitive position in an early-stage OTT market," he told Business Times, using the acronym for streaming services, which are delivered "over the top" of internet connectivity services. "DStv Now and Showmax users have doubled in financial 2019 and our connected video-user base is currently estimated at 1.6 times that of Netflix."Mawela does agree with Hastings, however, that the services meet different needs: "About 50%-60% of the Netflix base are also DStv subscribers - suggesting the service is largely complementary to pay-TV."However, he is under no illusion that MultiChoice can be complacent. "Changes in viewing patterns and technology have resulted in a significant increase in content that is available for video consumption. As such, continued innovation is a critical success factor . DStv Now and Showmax are [a] response to changing consumption patterns as a result of video entertainment services increasingly moving online. "The growth of both of these services is evidence of changing consumer behaviour . in particular the move away from linear viewing."MultiChoice is also investing heavily in original local content, says Mawela."We will continue increasing our spend on local content as a percentage of total general entertainment spend in line with our target of 45% by 2022 across all our services. Our pipeline for next year includes 52 new local film productions and 29 new local dramas, including the much anticipated and renowned Shaka Ilembe."This vast reservoir of local content remains a major differentiator from "imported" services, but the growing roster of Netflix originals gives it unmatchable international appeal. By generating local content globally, it increases its traction both among local audiences and those from other countries with global appetites...