Friday, August 13, 2010

TV Crossroads

By Howard Thomas

Rough times

The broadcast industry has been given a reprieve. Thanks to some suspicious shenanigans, the digital terrestrial broadcast technology option adopted years ago is being “reconsidered”. The idea is to replace it with a “better technology” invented by Japan, and used by only one other country in the world, Brazil.

Of course, we have to harmonise with 14 other countries in the region, and you can expect many of the countries to be bloody-minded and oppose South Africa’s proposals just because they come from South Africa.

However, we can’t mess around for ever as the ITU is not supporting analogue after 2015.

But the reprieve is welcome. Multichoice faces its first competition ever, the SABC can only recover by 3rd quarter 2011, and the local content industry is in flutters. They could all do with a little time to adapt.


Multichoice has expected competition for some time, even the current new arrivals are two years late thanks to ICASA dithering around as usual. But Multichoice needn’t worry. It is two steps ahead of TopTV, and about a hundred in front of the Super5 (née Telkom).

Firstly TopTV can boast all they like about getting 70 000 subscribers on the first weekend. The point is, - what tiers have these people logged onto? If they are lower end, then the profits are low, and breakeven lurks even further away. They have nice bouquets, and with lots of gospel and religion, they will attract the 4-6 market.

Multichoice has however the advantage in local and African content. Viewership for the Africa Magic channels is good, and Mzansi I reckon will be a hit. I’ve seen one Kuli Roberts show, but I reckon that’s the format that suits Pay TV – exclusive and ever so slightly outrageous.

They have also called for proposals for more local product, and the prices they are offering is right at the bottom end. But don’t forget that M-Net was one of the first to trumpet “Fit for Purpose”, the strategy that says you only spend on production what it is worth in terms of revenue and shelf life. I also remember M-Net’s now retired Carl Fischer saying years ago, “Quality comes out of quantity”

TopTV has a long way to go. There is no way it can afford local content at this stage. It has years to go before breakeven, and the reported shambles in installation and service was bad publicity from the start.


Why so long to recovery? The SABC cannot exist with its bloated staff, and face the prospect of having to fill extra channels that will command little revenue. There is talk of trimming seven hundred. Management from Minister down to executives are at each other’s throats.

How long will it take a really rough labour consultant to do the hatchet work? You have three options: early retirement (not many of those, just a handful of whites); voluntary retrenchment with say a 3 month package. The unemployable will hardly fall for that, and there are not many media jobs going. Finally there is retrenchment. Already the unemployable have put their backs to the wall, dug in their heels, and have claws out. So, that’ll take nine months alone.

The SABC also has to fix its ad revenue strategy, which is years behind the times. Until then, it’s only alternative is to discount.

Local independent production.

There used to be about 100 production companies ranging from the giants to the one man bands. There were about 20 giants, and 80 rats and mice (or boutiques as they call themselves). Even the little guys were kept alive on alone contract a year from the SABC. That’s over now.

The SABC cannot charge prices in excess of the new market levels set by M-Net, unless they only commission short runs and one-offs. I personally know of six who have closed shops and either install security gates, or you’ll find them behind their flea market stall.

So it will be back to the 20 giants who can at least run sausage machine production lines.

Who wins?

The ad agencies and producer who sell advertiser funded programmes, that’s who. Hate them as you will, they are with us to stay.

Howard Thomas has been working in entertainment and media for 40 years. His experience with TV started from the beginning in South Africa, and he is now a media business consultant, trainer and specialist in audience psychology.