TV's big overhaul - TechCentral

TV’s big overhaul

Duncan McLeod

[By Duncan McLeod] Television in SA is on the verge of its biggest changes since its introduction in 1976. Two new pay-TV operators will finally launch soon to take on DStv, and the move to digital terrestrial television will change the competitive dynamics of the industry forever.

It’s taken several years of commercial and legal drama, but South Africans are finally set to get two new competitors slugging it out in pay television, ending MultiChoice’s long-standing monopoly over digital satellite TV.

On Digital Media (ODM) and Super 5 Media (the latter is what emerged from the now-defunct Telkom Media) are both set to launch pay-TV offerings in 2010.

The two companies are playing their cards close to their chests, but ODM is expected to launch a service in the next few months, with Super 5 Media following later in the year with both satellite and Internet Protocol TV (IPTV) services delivered over the same fixed-line broadband connections that provide Internet access into people’s homes.

Super 5 Media is understood to be planning to offer three bouquets, thus appealing to a wide cross-section of the market. Its IPTV offering will appeal exclusively to high-end consumers.

Both ODM and Super 5 Media have their work cut out. The mere threat of competition has been enough for Naspers-controlled MultiChoice to lift its game significantly in the past two years.

The DStv operator has strengthened its offering substantially, launching high-definition channels and new content. It is also aggressively selling personal video recorders capable of recording live television.

MultiChoice, which bought the rights to broadcast Premier Soccer League matches, has also launched a bouquet of channels, DStv Compact, to target the same emerging black middle class that ODM has long identified as key to its launch into the market being a success.

Even though one of the prospective pay-TV rivals, e.tv owner e-Sat, has pulled out of the market, ODM and Super 5 Media will have to pull out all the stops if they’re going to win meaningful market share from an in-shape MultiChoice.

Pay-TV isn’t the only area that’s set to become more competitive. The move to digital terrestrial television (DTT) is also set to up the competition in free-to-air broadcasting.

But news last week that SA’s full migration to DTT will take longer than expected is a blow to South Africans holding out for better TV.

The move to DTT involves shifting terrestrial broadcasts (the SABC channels, e.tv and M-Net) from an analogue to a digital signal. Consumers will need to buy a set-top box to receive the new signals.

The technology will free up additional radio frequency spectrum that can then be used by telecommunications operators to provide wireless broadband services.

Because DTT uses comparatively little spectrum per channel, new terrestrial TV channels can also be launched, ensuring a more competitive market.

But the Independent Communications Authority of (Icasa), which regulates broadcasting, has delayed the full migration to DTT until 2013 at the earliest.

Cabinet had previously said the process would be completed by November 2011. Now Icasa says delays in the availability of digital set-top boxes, particularly of decoders that will be subsidised for the poor, has delayed implementation.

Despite the delay, broadcasters have already begun testing digital broadcasts. If you have a digital receiver, you can already watch digital broadcasts, which include channels not currently available on analogue.

Once the spectrum has been freed up from the full migration to DTT, Icasa will have the unenviable task of deciding which broadcasters will be licensed to launch new channels.

Though South Africans have to wait until at least 2013, it seems likely that the airwaves will be awash with new terrestrial TV channels in a few years.

Coupled with the competition in pay-TV, local couch potatoes will never have had it so good.

  • McLeod is editor of TechCentral; this column is also published in Financial Mail

3 Comments

  1. Competition in the pay TV arena is great. The down side is that Multichopice has a monopoly on a lot of content (especially series and sport) that many people enjoy watching and will miss if they move provider.

    I highly doubt that you’re going to be able to subscribe to ODM, Super 5 and DSTV and only pay for the channels that you want to watch.

    Already, DSTV has you by the balls and forces you to pay over R500 a month (excl. that ridiculous PVR/HD-TV access fee) for over 80 channels, 60 of which you probably never watch. Such a waste of money, but you’ve got no other option unless you rely on pirated media from the Internet.

    Unless you’re willing to shell out a LOT of money (and subscribe to all 3 providers), or unless the content on ODM and Super 5 is compelling enough to make you cancel your DSTV subscription, it’s not going to work.

    Same with the telecoms industry. Look at Neotel. Entered the market with lots of fanfare, but their prices are way too high and their services are too limited to make Telkom subscribers switch. There’s still no viable competition in the fixed-line space.

    It’ll be interesting to see if ODM and Super 5 will duplicate content and channels form DSTV becuase THEN the pay-TV arena will get a lot more interesting.

  2. One thing that needs to be made clear is that each pay-TV service will have their own smart card, set-top box (decoder) and satellite LNB. There will be no sharing of services. So , if you want to subscribe to all 3 you will need 3 X set-top boxes, smartcards and satellite dishes. It’s going to have to be a compelling proposition for anyone to switch from Multichoice.
    With respect to content – anything that Multichoice is showing now has been tied up for 3-5 years in terms of their content agreements with the likes of Discovery, BBC, NatGeo etc. The new entrants will not be able to use DSTV content unless they sign reseller type agreements – and that isn’t competition.
    Lastly – Multichoice has several hundred staff to manage their services. ODM and Super5Media have less than 40 each. How do they expect to compete in terms of service levels – or will everything be outsourced?

  3. I would love for DSTV to have a bit of competition, but 1 or 2 points: DSTV, you got to give the people to right to choose which channels they can view, I don’t watch most of the channels you provide but I’m forced to pay extra money every month in order to view the channels that I actually do want. For this reason, I’ll look into the others and if any of them over comedy central, I’m switching for sure. But the last point I want to make, I know its not legal, but you can get a unlimited broadband for less than R500 a month, hook it up to a torrent side and just download whatever you want, comedy central included.