You pays your money …

South Africans are about to get hit with an avalanche of pay TV options from next year — some of them delivered to your cellphone.

Until now MultiChoice — which owns M-Net and DStv — has been the sole provider of subscription TV in South Africa, but that’s about to change. Last month the Independent Communications Authority of South Africa (Icasa) received 18 applications to its invitation for new pay TV licences, covering a range of broadcasting technologies, from satellite to digital terrestrial.

Icasa has put no limit on the number of pay TV licences it will issue, though it is unlikely the domestic market can sustain more than five or six. By some estimates, an affordable pay TV offering could broaden the market by 3,5-million to four million households, roughly three times the 1,3-million subscribers in South Africa and Africa serviced by MultiChoice. The figure could be much higher if Africa is added into the equation.

Most of the applicants are promising more affordable viewing and truck loads of local content, not to mention wall-to-wall pornography, shopping channels, 24-hour sport and more. Some of the offerings will come in at about R100 a month, compared to DStv’s R469 a month.

MultiChoice has been blasted for its rich pricing structure, seen by some as the inevitable consequence of its monopoly position, though the company says its prices compare favourably with similar services elsewhere. DStv Compact, a scaled-down version of the full DStv package, was launched last year at R199 a month to capture the entry-level pay TV market. Compact offers 16 channels, versus more than 50 for the full-scale version.

Among the Icasa applicants were some familiar names, such as Telkom, which has teamed up with Anant Singh’s media company Videovision Entertainment, MSG Afrika Media and Women Development Bank Investment Holdings to apply for a commercial satellite and cable subscription broadcast licence. Telkom sees broadcasting as a way to protect its income from the encroachment of the second national operator, Neotel, which expects to steal 15% of Telkom’s fixed-line market over the next few years.

Telkom’s chief sales and marketing officer, Wally Beelders, says the existing subscription TV services do not address the needs of the mass market, and estimates that 40% of South African households are potential subscribers for affordable pay TV services.

MultiChoice is also applying for a licence, as required by the Broadcasting Act of 1999. Until now it has operated without a licence. The same goes for Worldspace, which has been operating for several years in South Africa, offering about 40 satellite radio channels. It, too, has applied for a licence to comply with the Act.

MultiChoice has a few tricks up its sleeve to defend its lucrative market — growing at the rate of about 100 000 subscribers a year — and has already tied up exclusive deals with new content providers, such as Disney. According to would-be competitors, MultiChoice’s growth in a monopoly position should have been much higher, given the enormous growth in the African middle class. Africans make up nearly half of new DStv subscribers and 25% of the total subscriber base, but could have been higher had it focused more intently on the emerging market.

Existing free-to-air terrestrial broadcaster and the South African Broadcasting Corporation (together with state-owned Sentech) have also applied for licences, and both are seen as strong contenders given their experience and established market positions. Both have promised strong local content, greater affordability and a wide choice of channels.

One of the more interesting applicants is Black Earth Communications, which has already applied for a commercial broadcasting licence in Botswana to operate a digital pay TV service called Black Entertainment Satellite Television (BEStv). It plans to offer between five and 10 TV channels for less than R100 a month, building this up to a “sampling” of between 100 and 300 channels at little extra cost per month.

Also applying for a licence is Goal Technology Solutions, a spin-off of Grintek Telecom, a broadband and internet services company.

Another applicant, On Digital Media, part of Cosatu-controlled Kopano Ke Matla Investment Holdings, plans to invest R1,7-billion in its pay TV service and will offer an entry-level service of 10 channels costing R150 a month. Mergan Moodley, CEO of On Digital Media, says the company has already tied up more than 70 channels and will offer a suite of services to suit different budgets.

Deukom Television, an existing service operating through DStv, offers seven German TV channels and four radio stations for R400 a month to a 10 000-strong subscriber base. It is applying for a licence to regularise its position in terms of the Act.

Some of the other licence applicants are Walking on Water Television, Quantic TV Network, E-SAT, Satellite Media TV, Multichannel Television, Kheta Media, Q Digital Cable Vision, MiDigital and African Spirit Trading 330. Another applicant is MAX TV, a UK-based shopping channel.

Two names that do not appear on the list are Vodacom and MTN, both of which have big plans for delivering TV services to your cellphone. Vodacom already offers a range of TV channels such as Sky News and E! Entertainment to users of 3G (third generation high-speed phones), and MTN is reportedly in discussions with MultiChoice with a view to launching its own TV-to-cellphone service.

Ultimately, subscribers will be able to select and pay for only those channels they want to view. As the choice of channels gets more bewildering and unwieldy, consumers are likely to opt for fewer channels — or movies — of their choice, and leave the rest off the menu.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

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