In a submission to communications regulator Icasa on the pay-television market in South Africa, e.tv has warned that free-to-air broadcasting is at serious risk unless regulations are introduced to protect and grow the sector.
The broadcaster, which is set to present its views at Icasa hearings in Sandton on Thursday afternoon, said in a written submission to the regulator that there is an “urgent need to develop and implement regulatory measures aimed at preserving the viability of the free-to-air segment of the TV broadcasting industry, which is under threat as a result of the increasing dominance of pay TV in the country”.
It said the number of free-to-air households declined from 8.4m in 2012 to 8.1m in 2016, while pay-TV households rose from 3.9m to 6.2m in the same period. “If no measures are taken to guarantee the health of free-to-air broadcasting services, the vision of ensuring access to information via print, broadcasting and the Internet, which are vital for building an informed citizenry, will be undermined.”
There is a risk, e.tv said, that a situation will develop where most South Africans will be forced to rely on subscription services, leading to the “digital divide between the technological haves and have-nots” widening further.
It warned that in the long term, the viability of free-to-air broadcasting – “already under threat” – will cease.
E.tv accused Icasa of making no effort to curb the amount of advertising pay-TV broadcasters can accept. It said the Electronic Communications Act states that pay-TV advertising and sponsorship may not be the largest source of annual revenue for subscription broadcasters. “E.tv is not sure if the authority has done assessments of the subscription television broadcaster’s finances to ascertain if there is compliance with this provision of the act.”
It said pay-TV operators took in 48% of TV advertising in 2016, up from 41% in 2012, with most of this revenue accruing to MultiChoice. “Limitations on subscription services’ access to the advertising markets … must be implemented without delay.”
E.tv is asking for “meaningful caps” on advertising revenue for pay-TV operators. “Stringent caps on advertising revenue share by subscription broadcasters could go a long way toward addressing imbalances in the market. If the subscription provider did not compete with free-to-air broadcasters for available advertising revenue, then it would pose less of a threat to free-to-air television.”
The broadcaster also wants pay-TV providers to pay to carry free-to-air channels through “reasonable carriage or integration fees approximating the value they contribute to the pay-TV platform”. The SABC on Monday argued at the same hearings that so-called “must-carry” regulations, whereby MultiChoice and other pay-TV platforms can carry the public broadcaster’s channels without paying, should be reviewed.
In its submission, e.tv also said it wants a break-up of broadcasting sports rights, such as into free-to-air and subscription rights, rather than giving sports rights to only one company. — © 2018 NewsCentral Media