Get ready for food and pornography as TV channels proliferate

October 24th, 2006

Is endless choice in media always a good thing? We are going to find out soon, as new subscription broadcasters are due to be licensed.

Eighteen applicants have taken up Icasa’s invitation to apply for a licence, and the regulator has put no limit on how many will get the green light. To put this into perspective, we had no television stations in 1975, seven in 1991, 37 in 1998, 74 in March this year – and now the number will go well into the hundreds.

Competition should give viewers cheaper options for pay TV than MultiChoice, opening up new markets of less wealthy subscribers. MultiChoice is anticipating this and started breaking up its package, now offering a R199 mini-bouquet still strong enough to be packed with the key ingredients: movies and sport.

The market will be spliced and diced, with eyeballs and advertisers split between more and more channels with smaller and smaller audiences. To sum it up, our lives will probably be enriched and enlivened by pornography and food channels (severally or even jointly) in all our official languages. Praise be to satellite TV!

The competition, however, will not be quite as rich as it seems at first glance. Our market is unlikely to be able to sustain more than one pay TV provider and certainly not more than two. In most of the big markets of the world, there were initially two satellite ofrerings and either one became firmly dominant (Sky in the UK) or the two merged (Germany, France, Italy, Spain). In the US, by far the biggest market of all, cable came first and took the urban market and satellite arrived to serve the rest of the market.

In South Africa the dominant player is, and will for the foreseeable future, be MultiChoice. With set-top boxes in more than a million houses and the first pick of content providers, it will take a lot of money and skill to eat seriously into their market. The Randlords of Randburg are not panicking, we can safely say.

The barriers to entry are huge, involving serious technical expertise, large-scale infrastructure and massive costs. It is safe to say that many of these applicants will merge, fold, be swallowed up, just sink into oblivion or settle back into being content providers on existing bouquets.

The serious contenders appear to be Telkom/Videovision and the SABC/Sentech bid. Counting against Telkom is the fact that phone companies have seldom succeeded in this area, and Telkom has enough of a headache dealing with potential competition in its core area. Sentech has had a stuttering start to most of its new technology; but these two contenders both have the deep pockets and infrastructure to at least be serious about it, and both have competent content partners. eTV has a bid in, and it is always worth keeping an eye on the cowboys in the corral.

The deciding factor, undoubtedly, will be content. We consumers will switch providers if and only if there is someone who can offer us better channels at a competitive price. MultiChoice has the head start and the deep pockets to stay ahead on content for a while at least.

And they are always one step ahead technologically. Their PVR (Personal Video Recorder) will take a lot of beating. It works brilliantly in giving one greater control over the screen (allowing one to pause live TV, for example, and making recording and replaying manageable to over-16s for the first time). Most importantly, it allows one to watch two different channels and record a third, and thereby promises to reduce divorce and patricide quicker than the churches and police combined.

They are trying to slip their M-Mobile option in through the same licence application. They have anticipated the new Act, which is passed but not yet signed into action, by making a technology-neutral application that will allow them to sell the handsets which receive a digital terrestrial MultiChoice offering.

I have taken part in the trail of these handsets and must admit to having lost interest after the gimmick wore off for the first few days. However, I think that they will take off when we understand what content will work best on mobile – either sport, or short bits of entertainment (7-minute video snacks).

Indeed, the big winners in the coming battles are likely to be the content providers. There will suddenly be a lot more buyers spending lots of money. The big driver of satellite audience is always local content, so boom times may lie ahead for local programme makers.

Entry Filed under: Anton Harber, Media regulation, TV