Niel Bierbaum
M-NET has refuted claims by the SABC that it earns 70 percent of its advertising revenue during its unencrypted open window.
According to Clare O’Neil, manager of strategic planning and research at Oracle Airtime Sales, which sells advertising on behalf of M-Net, the pay station has “never earned R430-million of advertising revenue in a year, let alone in open time”.
The SABC claimed last week that this amount was earned during M-Net open time, and that closing the window would free up this amount into the market. O’Neil states that open time accounted for “52 percent of M-Net’s advertising revenue for January to December 1994”.
M-Net’s interim results, published last week, showed that total revenue from subscriptions and advertising amounted to R311,9-million for the six months ended September 30 1995.
Closing the M-Net window, she says, would not free up the full amount of open time advertising revenue as “70 percent of open time viewers are subscribers anyway” and on that basis M-Net would “fight to retain its share of this advertising
Closing the window would probably result in a reduction in the rates, which advertisers would be willing to pay, rather than any great reduction in the volume of advertising. The question then is whether advertisers would want to spend any of the saved money on SABC channels. Advertising spend is not a given. It is spent with a specific purpose, and if there are no other channels providing audiences with similar programming to M-Net, that money may simply be withdrawn from the market or be transferred into satellite channels, which are now being sold to advertisers as a composite package along with the M-Net audience.
M-Net chief operating officer Gerrie de Villiers is unfazed. “As far as we are concerned the open window is part of our grandfathered licence. We are not going to enter into a public debate about the issue.”
De Villiers goes on to say that he finds it amusing when the SABC says that the private sector should not have the advertising revenue it has when the SABC “sticks out like a sore thumb for the amount of advertising revenue it earns while being a public broadcaster”.