Pay-TV service provider StarSat has taken its fight to broadcast adult content to the Supreme Court of Appeal, after the Western Cape High Court last year ruled the country's communications regulator had erred in allowing the broadcaster to air hardcore porn channels.
The broadcaster submitted its appeal to the Supreme Court last week, following judge Lee Bozalek's decision in November to effectively cut off a much-needed revenue stream for the broadcaster's parent company - On Digital Media (ODM) - which has been in business rescue since last April.
In the meantime, StarSat (previously known as TopTV until an investment by Chinese StarTimes) has resumed airing its standalone porn offering on a provisional basis, while its appeal is being considered, says ODM executive consultant and former interim CEO Eddie Mbalo.
Mbalo also notes ODM is still languishing in the final stages of the business rescue process, as it waits for the Independent Communications Authority of SA (ICASA) to transfer its electronic communications network services licence to StarTimes. This application was submitted in mid-November and is the only outstanding condition of the business rescue process that needs to be fulfilled.
Mbalo says it is impossible to put a timeline to this process, but admits the wait has affected ODM's business. "Until this process is concluded, we cannot capitalise the business. StarTimes has taken a risk and paid some of the costs incurred by ODM, but for all shareholders to start investing in the business, we have to conclude the business rescue."
Established in 2010, ODM had its nose bloodied when it tried to enter the local pay-TV space that is 95%-dominated by the DStv brand. The newcomer ran aground almost immediately after starting operations, with an offering dubbed TopTV. Chinese-based media group StarTimes took a 20% equity stake in ODM at the start of the business rescue process, renaming the pay-TV service StarSat.
'Not up to ICASA'
Mbalo explains the company chose to rather appeal the High Court ruling than to resubmit an application to ICASA, as it does not believe the regulator has the competence to rule on the type of content it should be allowed to broadcast.
"We do not believe ICASA should act as a censor and make decisions on R-rated content. Classification should be done by the Film and Publications Board. That's why we believe the Supreme Court will reach a different finding."
In order to bulk up its revenue stream, the broadcaster applied to ICASA for a licence to broadcast adult content on TV, which was granted in April 2013. In November of that year, StarSat unveiled three dedicated adult channels - Playboy TV, Desire TV and Private Spice - which started airing as a standalone StarSat sex TV package, at a subscription fee of R159 per month.
However, the Western Cape High Court ruled the matter be remitted back to ICASA for reconsideration. This comes after ICASA's decision to issue the licence was challenged by non-profit organisation the Justice Alliance of SA (Jasa), and supported by Cause for Justice and Doctors for Life.
In earlier court proceedings, the regulator conceded it had failed to appoint experts to study StarSat's porn plan, as Jasa argued the proposed adult content - as presented to ICASA - differed substantially to what was ultimately aired by the broadcaster. It was also found that ODM had failed to register with the Film and Publications Board as a purveyor of adult content.
Industry observers have long speculated that StarSat was forced to fall back on an adult package to lure subscribers, as it struggles to survive in the local pay-TV space. However, Mbalo is adamant the decision was driven by ODM's belief that South Africans should be free to choose what they wish to view.
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