The US dollar-based pricing of set-top boxes (STB) has proven to be a major inhibiting factor for the uptake of OpenView HD (OVHD), etv sister Platco Digital's free-to-air satellite TV platform. However, the company has a plan to lower costs.
Platco Digital MD Maxwell Nonge says the platform, which went live in mid-October last year, currently has on board more than 40 000 active subscribers. While that is 160 000 short of the target OVHD has set itself for March next year, Nonge is confident the changes Platco has up its sleeve - to be announced in the next two months - will accelerate adoption significantly.
"Our biggest challenge has been pricing. When we planned the service, the price was supposed to be just under R1 200 for the STB and installation, but now it is around R1 700. The problem is, our target market (living standards measurement four to seven) does not have that type of disposable income. Currently, the rand is trading at R10.65 against the US currency.
"We have seen a lot of interest in OVHD, receiving staggering amounts of entries when we launch competitions, but it is just too expensive. We are trying hard to lower prices and have a couple of retailers running specials at the moment."
The real game-changer, says Nonge, is in testing phase and will be revealed by October. While he cannot reveal details just yet, he says the combination of a couple of new additions to the service is likely to bring the STB price down meaningfully.
Mounting challenges
While pricing is the main bane for what was intended as a service that would allow all South Africans to have access to satellite TV - rather than the privileged few - other secondary challenges have already been overcome, says Nonge.
OVHD has shifted its focus to include independent retailers, as well as the original mainstream pool - a factor Nonge says has yielded results. "We have started dealing directly with smaller, localised retailers and have seen a big improvement in subscriber numbers - 100 STBs in four weeks. The benefit of the smaller retail outfits is that they offer their customers finance options."
Another significant challenge OVHD had at launch was the fact that it was not yet a trusted, recognised brand. Nonge says the company has started including etv's name in its marketing - something it avoided at first. "For about the last three months, we have been advertising OVHD as 'powered by etv' - a brand people feel comfortable with. At first, we thought content providers would not want another brand to overshadow them, but we were wrong - it turns out they are happy for us to leverage the brand."
Lastly, says Nonge, the delays in digital terrestrial TV (DTTV) are negatively impacting OVHD. "If DTTV could just get off the ground so people can start shifting their mind-sets to digital, it would change the situation a lot."
OVHD is optimistic, however, that it can achieve its 200 000 target. "If we don't lose time or run into any delays, we will achieve our [subscriber] target. We have 40 000 subscribers. From what I am told, M-Net had 10 000 in the first year of launch - so it is possible."
Meanwhile, pay-TV hopeful Siyaya TV started making noise last week, with Sunday reports indicating it would launch some of its offerings before the end of this year, using direct-to-home satellite broadcasting.
Siyaya was one of five new players that received conditional pay-TV licences from the Independent Communications Authority of SA in April, following an unsuccessful earlier attempt to open up competition in the space.
The latter endeavour saw one player - StarSat (formerly TopTV) - sticking it out, but the pay-TV provider has gone quiet since it underwent a business rescue process and fought for its right to air pornography.
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