- August 24, 2012
- Posted by: admin
- Category: Media & Broadcasting
Existing and aspirant broadcasters went before the regulator this week to secure a slice of the digital television pie.
The fight for what SA consumers’ television future will look like is hotting up. The broadcasting regulator’s new draft regulations for digital terrestrial television, the migration to which is already years behind schedule, came under fire this week at public hearings and could result in further delays.
Nigeria, Namibia, Botswana, Kenya, Uganda, Zambia and Mauritius have already launched their terrestrial digital television services already, but SA is falling further and further behind the due date because of dithering by the government and the regulator.
Last month, the Independent Communications Authority of South Africa (Icasa) published the draft regulations, which introduced several new issues that were hotly debated this week. Icasa was hoping public hearings would not be necessary because they would delay the process further, but broadcasters were having none of it.
A key issue was the regulator’s proposed creation of a third multiplex on which new subscription and free-to-air broadcasters will be licensed. Others were the idea of introducing open windows, such as the “Open Time” M-Net enjoyed for 20 years, to expose consumers to the new subscription players. Icasa shut down M-Net’s Open Time in 2005.
The necessity for broadcasting channels for bandwidth-hungry high-definition television, instead of standard-definition television, was also discussed.
Several new players appeared before Icasa this week, hoping to enter the market through the third multiplex. They included Kagiso Media and Siyaya Television. But Icasa councillor William Currie pointed out that the hearings were not a licensing process and new entrants would have to wait to make their case to enter the market.
There are two important dates when a country switches from analogue television to digital. The first is when digital television signals are launched and the second is when the analogue television signal is turned off. Between them is the dual-illumination period during which digital and analogue signals run side by side and analogue television households must be converted to digital set-top boxes.
Established broadcasters have to carry the cost of distributing both signals during this period and spend money on marketing to encourage their audiences to switch to digital. But new entrants only have to carry the cost of a digital channel and their marketing will only be aimed at attracting an audience. This is why existing broadcasters such as e.tv and the SABC are calling for Icasa to suspend the introduction of new entrants until the end of the dual-illumination period.
Kagiso Media said at the hearings that the existing broadcasters were established with very little competition and they were exaggerating the cost of the dual-illumination period. It described their arguments as “spurious”.
“As a black-owned media company, Kagiso Media is a firm believer that digital terrestrial television is the ideal opportunity to increase the levels of black ownership in the commercial television sector,” it said.
For the past 12 to 15 years of broadcasting, the incumbents had become entrenched by operating in a “benign environment” without major competition, Kagiso Media said.
“Content libraries have been built, the value chain has been established, sports rights have been taken up. You [Icasa] need to start to tilt a very unbalanced landscape slightly.”
E.tv had to postpone its presentation to the regulator this week because its top executives were launching an international news channel, but its submission states the station’s opinion of the draft regulations, which it will present to the hearings on 6 September.
“Incumbent free-to-air broadcasters are carrying the burden of the digital migration process and their existing business will inevitably be prejudiced during the dual-illumination period. Introducing competition during the dual-illumination period is contrary to the consistent policy position [over the past 10 years] that no new entrants should be licensed before analogue switch-off.”
E.tv states that the incumbent broadcasters should be compensated for the costs they will have to incur to migrate and also be protected from market fragmentation during the process.
It claims that digital terrestrial television delays have allowed MultiChoice’s DStv to become an increasing threat to free-to-air broadcasters.
“Four years ago, 13% of SA TV households had pay TV. In 2012 that figure has grown to 25%,” it says in its submission. “E.tv’s market analysis and forecasts, in respect of which no contrary evidence has been presented by the authority or other stakeholders, indicate that DStv will hold more than 50% of total SA households in five years’ time.
“This is inevitable unless pro-competitive measures are taken to impose pro-competitive conditions on DStv and digital terrestrial television is established as a viable and compelling free-to-air alternative platform.
“The introduction of new free-to-air players in the terrestrial market during the dual-illumination period will simply serve to weaken the terrestrial incumbents financially by fragmenting the already shrinking free-to-air advertising pool, thereby even further strengthening the DStv monopoly.”
At the hearings on Tuesday, M-Net said that it did not feel “strongly for or against” new competition — “it is the way the free market works”.
But it is in a position of power after years of having a monopoly.
M-Net’s Karen Willenberg said Icasa had not been awarded enough capacity on multiplex two to allow it to migrate its two terrestrial television channels to high definition, although the need for it was hotly debated. One stakeholder listening in on the hearing said under his breath that M-Net was playing games with the high-definition issue.
E.tv’s submission addresses the issue of high-definition too and claims it is not possible to roll out high-definition television with the current multiplex allocation.
“E.tv could not afford to use its 50% capacity to launch only one high-definition channel if its audience and advertising are going to be fragmented by the introduction of multiple channels by a new competitor, because the costs versus benefits of doing so will make the channel unviable.
“Yet, if the digital terrestrial television platform does not have high-definition channels, it will further weaken its position against the DStv platform. DStv is launching more high-definition channels on its platform and using these to drive further subscriptions,” e.tv states. “The digital terrestrial television platform will be unable to compete in this regard and, if configured in the manner proposed in the draft regulations, it will become poor man’s television both in quantity and quality.”
But TopTV argued against the use of high-definition television during the dual-illumination period and said standard-definition wide-screen television was more than adequate.
Kagiso Media was the main proponent of open windows for new subscription broadcasters, saying M-Net’s Open Time had been “wildly successful”. It proposed a four-year, two-hours-a-day open window.
“If digital terrestrial television is not a success it will be a disaster and we believe the use of open windows is a way of avoiding this,” Kagiso said.
But the Icasa panel said this was a new issue that had not been included in the current draft regulations. If it was to be introduced, it would lead to significant further delays. – (c) 2012 Mail & Guardian
Source: Tech Central – Lloyd Gedye.