Not yet on air, international business news franchise operation CNBC Africa is already ruffling feathers, notably those of the SABC and its main local rival, Summit TV.
Since its launch in November last year, several key staff members from the SABC have defected to the new channel. These include former award-winning SAfm co-host Nikiwe Bikitsha, SABC 3 news presenters Lerato Mbele and Mandlakazi Mpahlwa, and former SABC Africa anchor Peter Ndoro.
While Bikitsha, Mbele and Mpahlwa will form part of CNBC Africa’s team of eight anchors, Ndoro will double as both the channel’s director of corporate communications and host of a weekly television programme.
CNBC Africa has also poached former Summit TV news anchor Bronwyn Nielsen and the channel’s general manager Gary Alfonso. Both Nielsen and Alfonso will assume the same roles at the news franchise.
When CNBC was scouting around for a base they could use to expand its current 230 million viewership worldwide, the International Herald Tribune’s website reports that it chose South Africa for the country’s estimated US$600-million a year television advertising industry of which it wants a slice.
The venture is a result of a partnership between a group of Dubai-based Middle Eastern investors led by CNBC Africa chairman Zafar Siddiqi and the Industrial Development Corporation (IDC) of South Africa.
The former own 70 percent of the franchise while the IDC, through its Media and Motion Picture Strategic Business Unit owns the rest which it acquired for R144-million.
Announcing the deal five months ago, IDC’s chief executive officer Geoffrey Qhena said they had decided to come on board due to the significant financial returns the venture offered the IDC.
“We are excited about this project in that it will not only provide significant financial returns to the IDC, but also offer cutting-edge news. It thrills that it will transform the African economy and improve business interactions between African countries.”
The venture will promote Africa as a viable investment option and create jobs, he added.
CNBC Africa has pledged to create 120 jobs through its operations. The channel’s chief operating officer Trevor Ormerod says they are also looking into setting up a media university in 2008.
When CNBC Africa goes to air on in June, replacing its European counterpart on DStv channel 54, Ormerod says the broadcast will coincide with the simultaneous launch of its head office and bureaus. These will be in Sandton, Cape Town, Nairobi,, Lagos and Abuja in Nigeria. The channel’s headquarters will be in Sandton.
Bureaus outside South Africa will be staffed by a bureau chief , reporters , sales people and technical staff.
CNBC Africa’s statement that it will not rely solely on advertising, at least not for the first three years, has raised questions about its business model especially in an environment which, if one takes Nigerian-based newspaper ThisDay as example, does not always welcome foreign products.
“Yes, there is funding. We have foreign and local funding coming in which will help with the sustainability of the channel for at least three years. But the key is to generate advertising from day one,” says Ormerod.
“We are talking to advertisers outside South Africa as well about what’s happening and what we are doing. All deals inside and outside South Africa will be advertising related,” he adds.
Ormerod denies allegations that the CNBC is in talks with governments of African countries in which it has a presence, asking them to support the channel financially seeing as they also stand to gain from the coverage it will give their countries.
He insists that despite the source of the funding, notably the government-backed IDC, their news coverage will remain independent and unbiased.
Ormerod says that a number of key advertisers in South Africa as well as Nigeria and Niarobi have been approached and the feedback is very positive.
He reveals that among the advertisers they have approached are the Diamond Bank in Lagos, Nigeria; the Nigerian Stock Exchange, Dyer & Blaire in Nairobi, Kenya and the African Banking Corporation which is also in Nairobi.
It is no secret that breaking into the African market is a costly exercise which has seen a number of international news agencies scale down their presence on the continent.
However, says Ormerod, this is not a deterrent for them. After all, CNBC has franchises in 89 countries worldwide and 129 bureaux.
Vernon Matzopoulos, channel director at Summit TV which will be CNBC Africa’s “neighbour” as it broadcasts on DStv’s channel 55, says it is still too early to tell how the new player will affect them.
He says they were offered the franchise operation initially but declined it as they doubted it would work.
“We were offered the CNBC Africa franchise before but turned it down. We believe people watch CNBC because of its Euro-American-Asian coverage. They do not watch it for the local content, and mixing it will only result in viewer confusion which is not good,” explains Matzopoulos.
Summit TV has an average weekly viewership of 194,043, according to the July to November 2006 measurements by SAARF/AC Nielsen. The channel, through DStv, also has presence in over a million households in southern Africa – access which its new competitor will also have.
Matzopoulos says Summit TV has the added advantage of a larger market share.
“We have two to three times the audience than what CNBC Africa has,” says Matzopoulos.
He says they will work on improving their coverage of local business news to make sure that they secure and protect their market share.
“Ultimately it’s all about connecting with your audience and understanding what they need.”
Ormerod says CNBC Africa will start off with nine hours of local content with live feeds from its European, Asian and American counterparts. He says although they will be replacing CNBC Europe, they will retain popular shows like Jay Leno.
The channel will broadcast 24/7 and the content will also include lifestyle business news geared at the investor.
Radio
The radio business
Recent figures released by research company Target Group Index (TGI) show there’s been significant growth in the number of people tuning into business programmes.
Host of Kaya FM’s KayaBizz, Steven Bacher, says this reflects the growing entrepreneurial spirit out there especially among the black middle-class, most of them new investors.
According to the TGI figures, SAfm’s 30-minute business programme Market Update attracts the highest number of listeners – 896,000 every week day between 6pm and 6.30pm. The show is hosted by Siki Mgabadeli who was also reported to be joining CNBC Africa but will not be doing so any more.
In second place is Alec Hogg of Moneyweb’s business show on Radio 2000/RSG with an average of 752,000 listeners every week from 6pm to 7pm.
Other business shows battling it out during the 6pm to 8pm prime time spot include Talk Radio 702 and Cape Talk’s World at Six presented by Bruce Whitfield, Classic FM’s Classic Business Day hosted by Lindsay Williams, and Kaya FM’s KayaBizz which has about 90,000 listeners.