Wanted: Eyeballs for new stations

After the corks had been popped and the celebratory champagne drunk, it is down to business for South Africa’s new pay-TV entrants.

The next few years are going to be crucial in determining who will emerge as a real competitor to MultiChoice and who will fall by the wayside.

While consumers can rejoice in the imminent arrival of competition in the pay-TV sector, analysts are warning that the South African market will not be able to sustain all four new entrants.

On Digital Media (ODM), Telkom Media and e.tv sister company e.sat were all granted licences this week by the Independent Communications Authority of South Africa (Icasa), as well as a single-channel niche broadcaster called Walking on Water, which aims to provide Christian programming.

This is great news for the consumer, as these new operators will be offering a range of new bouquets that will make pay-TV affordable to South Africans who previously could not afford such services.

Bronwyn Keene-Young, e.tv’s chief operating officer, says the potential success or failure of the new entrants is dependent on a number of factors including target market, subscription fees and types of programming.

‘Provided that all the services succeed, it’s great news for the consumer,” says Keene-Young. ‘More competition means more choice.”

‘Given that four new entrants have been licensed, e.sat will carefully plan its business and channel strategies in the context of increased competition in the market,” says Keene-Young.

ODM’s business development manager, Laurent Petit, says that ODM has been expecting Icasa to license numerous new entrants and that it has already factored this into its business plans.

‘We believe that there is enough space for all licensees to be active and profitable in the market,” says Petit. ‘That does not exclude consolidation in the future, but it is too early to speculate on that.”

Telkom Media spokesperson Chris van Zyl says there is space for all new players. The arrival of new pay-TV entrants means consumers can look forward to more choice, more flexibility, more affordability and more relevant content.

Keene-Young points out that the potential failure of any of the new entrants could have a negative effect on consumer confidence.

‘If any of the services fail it will have a detrimental effect on consumers who have bought the satellite dish and set top boxes to receive that service and it could very likely result in a loss of consumer confidence in the new pay-TV operators,” says Keene-Young.

Icasa is considering forcing an open access model on incumbent MultiChoice, which would mean that consumers would have one set top box with multiple smart cards for different subscription services. This would also limit the damage if one of the new entrants failed.

Telkom Media seemed like a safe bet for a licence after its parent company wrote it a R7-billion cheque to get things up and running. This huge cash injection has allowed it to headhunt experienced broadcasting professionals such as Jimi Matthews, who will head up its new 24-hour news channel. With SuperSport having signed up broadcasting rights for most sporting codes, Telkom Media’s ability to provide a quality sport offering could have the biggest impact on its success. However, Telkom Media is not only looking to subscription broadcasting. It will offer a range of other services such as mobile TV, IPTV and video on demand.

During Icasa’s hearings for the licence applications, Hosken Consolidated Investments’ Marcel Golding admitted that if e.tv was to remain sustainable in South African broadcasting it had to exist in a multichannel environment. Now it has a licence, it might be the first new entrant to market too. E.sat is remaining tight-lipped at the moment regarding what its offering will look like, but it is planning to launch in the first half of next year.

On Digital Media’s biggest selling point is that the consumer only pays for the channels they want. Allowing viewers to bundle their own bouquets is a new phenomenon in South African subscription broadcasting and provided it has a healthy range of content, its offering could prove very popular. ‘ODM will empower consumers to watch what they want and only pay for what they want to watch,” says ODM’s Petit. ‘This has never been the case in the past.”