News that the New Age is planning to launch a 24-hour news channel on DStv's premium bouquet came as a surprise, even to industry insiders.
Sources at the New Age said they were only notified of plans to move into television two weeks ago but that construction is already under way for a new studio.
According to a statement released on Thursday, the channel is being launched by Infinity Media, a joint venture between India's Essel Media, South Africa’s Oakbay Investments and a broad-based black economic empowerment structure.
It said that Essel Media and Oakbay will each own 35%, while the empowerment structure will hold 30% of the business. The BEE structure is still being finalised.
Essel Media is part of the Essel Group, which offers entertainment and news channels in India. Essel Media is managed by LN Goel, who was formerly the managing director of Zee News, and is a founding member of the Essel Group.
Meanwhile Patrick Conroy, head of the 24-hour eNCA news network, said there had been no indications in the industry that the New Age was planning to move into TV.
The New Age is owned by the wealthy Gupta family, which has close ties to President Jacob Zuma and his family. Zuma’s wife Bongi Ngema is employed by a Gupta-owned mining services company and his son Duduzane sits on several boards together with the Guptas.
Questions have been asked about the relationship between the various state-owned entities and the New Age after it emerged that Transnet, Eskom and Telkom paid millions of rands in sponsorship to the newspaper’s business breakfast events.
The newspaper’s 45-minute breakfast briefings were apparently broadcast for free on SABC 2, which usually charges R18 000 for 30 seconds.
A surrogate station?
Meanwhile Ruth Teer-Tomaselli, professor in media studies at the Centre for Culture and Media in Society at the University of KwaZulu-Natal, has questioned the timing of the proposed launch.
"A couple of years ago, the SABC put a business plan together for a 24-hour news channel and it was just too expensive, and they scrapped it," said Teer-Tomaselli, who is also a former member of the SABC board.
"[Now] the New Age, which has no broadcast experience and already has a tight interconnectivity with SABC, especially in terms of editorial, decides to do it. Is this a surrogate? I don't know.”
In August last year the SABC last year announced that it was preparing to launch a 24-hour news channel.
At the time, Communications Minister Dina Pule put the projected operational cost of the channel at R180-million a year, rising to R240-million in the fifth year and she said R75-million would be needed for capital expenditure.
But Finance Minister Pravin Gordhan put the brakes on the project in October, saying the country could not afford “vanity projects” when the country was under fiscal constraint.
Show me the money
Teer-Tomaselli said that in the current climate it would not be hard for the New Age to source journalists to staff the channel but questioned how it would fund the venture.
"The television industry in South Africa has reached a level where there is excess talent. The real problem would be money,” she said.
Big newspapers usually write off money for the first few years after they launch and only begin to make a profit in the years after that, she added. “It’s not only a case of where you're going to get the startup costs – [although] that's a big issue – but also where you're going to get your revenue stream? Who's going to advertise on a channel like that?”
She pointed out that although Multichoice is doing well, its subscriber base comprises less than 10% of the population.
Multichoice has around 4-million subscribers of which 45% receive the premium bouquet.
“Who is their target audience?” she asked.