Must-watch: Inside SA’s ever-changing TV sector
Nowadays in SA the twists and turns in the media industry can be more gripping than the entertainment it provides. Will the new kid on the block win through? Which villain will be next to bite the dust?
Between a financially distressed public broadcaster and online streaming services making inroads, SA’s TV industry has been thrust into a state of flux.
MultiChoice is about to fly the Naspers coop at a time of uncertainty for global pay-TV operators, while eMedia Holdings’ free-to-air satellite TV platform, OpenView, is still trying to find its feet.
Mzwanele Manyi’s Afro Worldview, the TV channel previously known as ANN7‚ recently succumbed to its tainted past as public outrage against state capture grew.
The station, which was taken off air in August, was formerly owned by the Gupta family.
MultiChoice said in August it would replace Afro Worldview with Newzroom Afrika, a start-up owned by relatively unknown TV production entrepreneurs Thokozani Nkosi of Eclipse TV and Thabile Ngwato of Rapid Innovation. It is said to be launching early in 2019.
It will be tough for that channel to find its niche, "but it’s important it succeeds because diversity is always good", says Media Monitoring Africa director William Bird.
Meanwhile, for the sake of MultiChoice and other players in the industry, Bird says he’s concerned about the state of the SABC.
"If it ceases to function effectively, or just becomes a shell of itself, that would be really serious for competition issues," he says.
Public broadcasters feed the industry as a whole and are important breeding grounds for media professionals.
"Another reason is that if you have a functioning and effective public broadcaster, it forces commercial entities to still do quality news."
Khalik Sherrif, eMedia’s new CEO, agrees. "It’s terrible that the SABC is in the state it’s in now — when the public broadcaster is healthy, the industry is healthy, so everybody needs to support it," he says.
eMedia — which owns TV station e.tv, 24-hour news channel eNCA and OpenView — targets the same mass market that the SABC does. Both companies cater to those who don’t want to, or can’t, pay for TV services every month.
However, as more people ditch linear pay-TV services in favour of streaming platforms like Netflix and Amazon, MultiChoice is increasingly playing in the same arena — albeit at the top end of it.
The pay-TV giant, which Naspers plans to unbundle onto the JSE in the first half of 2019, is battling a weak domestic economy and is losing premium customers to Netflix. But it’s still growing subscriber numbers thanks to its cheaper, less profitable, packages.
In the six months to September, MultiChoice added 285,000 subscribers in SA, taking its base to 7.2-million households in the country. The changing customer mix meant average revenue per user each month fell 3.5% to R335.
However, Sherrif says eMedia doesn’t see MultiChoice as a direct competitor to OpenView, which counts about 1.5-million households as customers.
"We think we can be complementary," he says, adding that consumers will increasingly hold multiple subscriptions and will flip through different platforms and their channels to find what they’re looking for.
Even when internet access becomes ubiquitous and affordable, allowing streaming services to be more widely adopted, people will keep their TV sets, he predicts.
In Sherrif’s opinion, free-to-air "is the future of linear television".
He says: "We’ve put a lot of money into OpenView — we haven’t seen the light of day yet but we’re very positive that we will … There’s good traction and the imminent digital migration process feels as though it will be good for us." He says roughly 5.5-million of SA’s 14.5-million households do not have digital TV services, namely MultiChoice and OpenView.
The state has said in the past that when it switches off analogue signals, it will give vouchers to those households that can’t afford these services on their own.
"So there’s an opportunity around that," Sherrif says.
Bird, meanwhile, agrees with MultiChoice that streaming services need to be properly regulated.
MultiChoice has long argued that Netflix and its internet peers have an unfair advantage in that they don’t have to pay taxes, comply with BEE rules or invest in local content.
Broadcasters in other markets are having the same fight, and rightly so, says Bird.
To change with the times, MultiChoice plans to let customers ditch their satellite dishes and access its content solely via the internet — if they want to. Other operators, including Sky in the UK, have already gone that route.
MultiChoice Group CEO Calvo Mawela says he’s optimistic that the pay-TV market will "hold its own" in the face of new competition from video-on-demand platforms. Like Sherrif, he also believes that consumers will hold multiple subscriptions and most won’t discard satellite TV when they sign up to Netflix.
To give it an edge over foreign rivals, the group plans to invest more in local content, which remains the lifeblood of SA’s TV industry.
As an example, MultiChoice plans to co-produce a new series, based on a novel by Afrikaans crime writer Deon Meyer, with a major international producer.
For the time being, live sports are also a saving grace for MultiChoice. Its free-to-air competitors, including eMedia, don’t have the resources to bid for major sports leagues and events as they rely solely on advertising revenue.
But there’s a new threat on the horizon for pay-TV operators around the globe: Amazon, with its market value of $800bn, is gearing up to bid for sports rights, and that could encourage other technology giants to do the same.