Struggling pay-TV broadcaster On Digital Media (ODM), which owns StarSat, says it has paid off R45 million in debt and has now entered the final leg of its business rescue process, which it entered into in April 2013.
In a letter to shareholders this week, ODM's lawyers - Bowman Gilfillan - write that "the early payment of the distribution amount was made possible by the early provision of funds for this purpose, by StarTimes".
Chinese-based media group StarTimes took a 20% equity stake in ODM at the time when the local broadcaster was entering business rescue.
The R45 million amount paid to creditors is equivalent to a payment of about 15c on the rand of claims made to the company's business rescue practitioner, as at 30 November 2013, and "is 50% more than was originally contemplated at the time of the adoption of the BR [business rescue] plan", says Bowman Gilfillan.
Interim CEO Eddie Mbalo this morning stated the business rescue process is almost at an end and is bullish about the state of the company's StarSat platform, which has struggled to compete in a market dominated by MultiChoice's DStv brand.
"We haven't lost the big numbers [of subscribers], as one would have expected from a company in business rescue," he says. However, he would not be drawn on StarSat's latest subscriber numbers or market share, saying the information is competitively sensitive.
Mbalo explains that because the company has been in business rescue, it has not been actively trying to attract clients, but expects things to kick into high gear once this process is concluded. "A new board and new structure, together with the new shareholders, will devise a new strategy for the business," he says, adding that the provision of premium content would likely be on the cards.
It's not about porn
Mbalo also rejects industry pundits' long-held belief that the broadcaster was forced to offer adult content as a means to survive in SA's uncompetitive pay-TV landscape. StarSat offers three pornography channels - Playboy TV, Desire TV and Private Spice - which started airing in November as a standalone sex TV package, at a subscription fee of R159 per month.
"It's far from the truth to say that we are doing this as a means to save the business. We are fighting for the principle that South African should have the right to watch whatever they want in their homes.
"In this, I think we have succeeded."
Mbalo would also not be drawn on subscriber numbers for the broadcaster's adult offerings, but says the uptake has been muted as the company has not actively promoted and marketed the channels.
Meanwhile, the Western Cape High Court recently reserved judgement on whether the Independent Communications Authority of SA's (ICASA's) decision, to license three porn pay channels, should be reviewed. The Justice Alliance of SA (JASA) argued that ODM had not been truthful with ICASA about the nature of the content in StarSat's adult offering, thus claiming the regulator's decision to allow the content to be aired had been flawed.
ODM's legal team hit back, saying it is not a crime to distribute pornography on a secure channel, and that it was within the ambit of the Broadcasting Complaints Commission of SA to deal with content-related complaints, and not that of ICASA.
JASA filed papers in the High Court in November last year, challenging ICASA's decision, in April last year, to allow StarSat to broadcast pornography channels on TV after 8pm.
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