The recent awarding by the Independent Communications Authority of SA (ICASA) of five pay-TV licences for South Africa has ended the long term monopoly on such a service that has been held by Multichoice.
Multichoice, naturally enough, was one of the five to be awarded with a licence, alongside its most likely serious rival, Telkom Media.
Telkom, which owns 60% of Telkom Media, has invested a whopping R7.5 billion in the business, which in itself makes the company the strongest contender of the remaining subscription-broadcasting applicants.
With a comprehensive fibre network available to it to give it the ability to deliver content to homes effectively and cheaply, coupled with its substantial war-chest to get its subscription broadcasting, video-on-demand and television-via-broadband services up and running, there is no doubt that Telkom Media is positioning itself as a major player in the local pay-TV market.
The organisation has also hired former SABC and e.tv news head, Jimi Matthews, to oversee its new, 24-hour news channel ad plans to offer a 15-channel bouquet that will include sports, movies, music and educational channels, all for less than R100.
The third licensee is E-Sat, a sister company to e.tv, which has proposed a 21-channel pay-TV package based on movies, sport and a 24-hour news channel.
ODM, the fourth licensee, has proposed a 40- to 50-channel service that would range in price between R149 and R369 for a full offering, but - uniquely - has also proposed a system where users would only pay for what they want, thereby allowing subscribers to create their own bundles.
The final licence has been awarded to niche broadcaster Walking on Water, aims to offer a wide range of programmes based on Christian lifestyle principles, delivering its content via satellite.
Taking pay-TV to the rest of Africa
Another local company is playing in this market space, albeit by taking its broadcasting service to the rest of sub-Saharan Africa, rather than getting involved in a head-to-head battle with Multichoice on its home turf.
Gateway Broadcasting Services (GBS), a subsidiary of Gateway Communications, launched just three months ago and is already available in Kenya, Uganda, Tanzania, Botswana, Rwanda and Mauritius, and has further launches planned for Angola, Burundi, Ethiopia, Ghana, Malawi, Namibia, Rwanda, Zambia and Zimbabwe over the next few months.
According to a spokesman, further expansion that will see coverage extended to Mozambique, Sierra Leone, Gambia and Francophone countries is planned by the end of the year, with the entire sub-Saharan region serviced by mid 2008.
Julian McIntyre, MD of GBS says: "The continent currently represents the least penetrated pay-TV market in the world, and there is huge appetite for the premium news, sport and entertainment that pay-TV offers. Monopoly pricing and programming with no relevance to viewers' lives has put pay-TV out of reach of most television-owning households. GTV (The television service provided by GBS) is committed to providing African viewers with the service they want at a price they can afford."
He says that prior to launching, GBS asked consumers what they want from their TVs. "Overwhelmingly, live English football was the answer - and high subscription prices was the complaint. We listened and our service will now give consumers Barclays Premier League football for far less cost."
"We have invested heavily in crashing through the monopoly that has existed before with a better, more accessible choice. In addition to this investment, the GTV team has the vision, courage and resolve required to achieve the fastest ever rollout of a new service."
The pioneer's progress
MultiChoice dismisses claims of being a monopoly by stating that it pioneered digital satellite television in Africa by having the courage to take a risk and set up from scratch - providing both content provision and subscriber management services - initially with only 2344 subscribers. Today the company has over one million customers.
"We have come a long way and it has been an exciting but challenging journey. We initially launched with just a handful of channels, although today MultiChoice broadcasts over 50 video and 60 audio channels on a 24-hours a day basis via our numerous bouquets," says MultiChoice South Africa CEO, Nolo Letele.
"We have close to 700 employees just in South Africa and have created employment for many others in, for example, the previously nonexistent decoder manufacturing industry."
MultiChoice claims that it strives to remain a committed African player on the African continent that is able to adapt to and respect local cultures and customs while helping the local market through the transference of a variety of skills.
"We think globally but operate locally, always while trying to be a good corporate citizen who engages in corporate social investment programmes and embraces the principles of the New Partnership for Africa's Development (NEPAD)," he says.
The future is bright
According to a report on ITWeb, ICASA has already claimed that it could license more commercial and public broadcasters if the existing applicants can demonstrate the market's viability.
This goes against the views of certain analysts, who feel that the regulator may already have licensed too many pay-TV broadcasters.
Brian Neilson, a director of BMI-TechKnowledge, says the company's research indicates that the local market is unlikely to sustain more than two major players, with the business case for a third or fourth player to invest to the same extent as Multichoice and Telkom Media being 'dubious'.
However, of an estimated seven million households with TV sets, only 1.4 million of these are MultiChoice subscribers, so there is definitely room for growth, and with new platforms and delivery channels - such as mobile TV, IPTV and video on demand - becoming available, this could well increase in the near future.
Telkom Media aims to provide IPTV, which targets the defined market of households that have Internet access, while Multichoice is planning a similar service "to enhance the experience of its premium subscribers".
"The launch of the DStv Broadband platform is purely to give premium subscribers another choice to view our content on an alternative platform," says Letele.
With competition in the subscription broadcasting arena hotting up across the African continent, and with local organisations the key players in this scene, the future for these businesses, as well as the local arts and entertainment scene they will help to support, certainly looks bright.
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