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SA’S MEDIA TITANS BRAWL OVER DIGITAL TV

As SA approaches a June 2015 deadline to migrate to digital television broadcasting, a fight is raging over the control system SA should adopt, threatening progress yet again.

The move to digital is under a directive from the International Telecommunications Union, the global regulator, which will stop protecting analogue broadcasting in countries that do not meet the deadline to migrate to digital.

Digital is expected to free up spectrum for broadband services, improve picture quality and provide space for additional channels.

The new broadcasting platform, dubbed digital terrestrial television (DTT), could increase competition in the market as it allows for more channels to share the airwaves. If handled properly, it could revolutionise broadcasting in SA. But progress in SA has been slow. The process started seven years ago and now the fight centres on whether or not a set-top box, which will be needed for use with older TV sets to receive the digital signal, should include encryption technology.

Previously, progress was hampered by a proposal to change the digital broadcasting system to the one used by the Brazilians and Japanese but SA is sticking with the European version.

The main players in SA’s television broadcasting scene, public broadcaster the SABC, Naspers-owned pay-TV monopoly MultiChoice and free-to-air broadcaster e.tv, owned by listed houses Remgro and Hosken Consolidated Investments (HCI) through stakes in Sabido Investments, are vying to influence and control the new technology.

Government will foot the bill, estimated at R3bn, to purchase set-top boxes for poorer households that cannot afford the estimated R400/box cost.

The SABC and MultiChoice say the boxes should not be encrypted but e.tv wants encryption, sparking claims that it plans to use the boxes as a platform in future to offer its own pay-TV service.

Critics say e.tv is trying to gain from the state’s subsidy of the boxes as encryption will allow broadcasters to communicate directly with targeted TV viewers, enabling them to sell content, thus defeating the purpose of opening up the airwaves to free-to-air broadcasts.

When asked what technology government favoured, communications department spokesman Siyabulela Qoza said communications minister Yunus Carrim had undertaken a process to “encourage consensus”. An “outcome” has emerged from the process, he says, and Carrim will discuss it with cabinet before making it public.

“Government is working towards meeting the 2015 deadline. All our efforts are directed at meeting this deadline,” Qoza says.

The Universal Service & Access Agency of SA has completed the qualifying criteria for households while distribution systems are being finalised with the Post Office.

Though the department is being vague, it is expected that deals cut between the SABC and MultiChoice – worth more than R1,2bn over five years – will influence the decision. The two are opposed to encryption.

MultiChoice will pay the SABC R700m for the right to broadcast two of its new channels on its DStv platform. A 24-hour news channel went on air in August and an entertainment channel is expected to start before the end of the year. In addition to the contract fee, the SABC will be entitled to keep all the advertising revenue from the channels.

“What the deal did is give us the ability to cover the cost of starting the channels and immediately put them on a sustainable funding base,” SABC chief operating officer Hlaudi Motsoeneng says. Government had promised R10m/year for the channels, which was inadequate, says Motsoeneng. “MultiChoice offered us the funds and a broadcast platform.”

In return for the cash, MultiChoice got the SABC to agree to not allow any of its channels to be encrypted during the five-year deal term.

“What we said to MultiChoice is that our channels cannot be switched off to any viewer, whether they paid subscription fees or not,” says Motsoeneng.

In addition, MultiChoice has set aside a further R500m to buy content from the SABC in the same period, he says. That could include licensing MultiChoice to broadcast SABC content beyond SA, such as popular soapie Generations.

The SABC’s mandate is to provide news and information to the entire nation, regardless of the viewer’s ability to pay a subscription fee.

MultiChoice can – through its existing encryption technology – switch off viewers who have not paid subscriptions to its own channels but leave open access to the SABC’s channels. “Not even those who do not pay for their TV licences can be switched off,” says Motsoeneng.

MultiChoice, which has benefited from being a monopoly in pay-TV, has accused e.tv of wanting to use set-top boxes in future as a platform for pay-tv, a claim e.tv denies.

SABC CEO Lulama Mokhobo says the broadcaster will implement policy decided by government but makes clear its bias: both she and Motsoeneng repeatedly refer to MultiChoice as a “long-term paying partner” while e.tv is consistently branded “a competitor”.

But she is adamant that there can be no barriers to viewing the SABC. “As long as viewers have access to technology to receive TV, they see the SABC,” she says.

E.tv is unfazed by the tie-up and recently unveiled a new satellite service called OpenView HD, which offers 15 channels, including the SABC’s.

That pits it against MultiChoice, while it continues to compete with the SABC on free-to-air TV.

Users of OpenView, however, need only to make a one-off upfront payment of R1599 for a decoder as there are no subscriptions. In contrast, MultiChoice offers a monthly subscription model in different packages, and has been SA’s only pay-TV operation since 1986, until the short-lived emergence of TopTV in 2010.

A row is brewing with the SABC, which says it does not have a contract with e.tv for broadcast on OpenView.

“OpenView’s intentions are commercial, and they will derive a benefit by having our channels there,” says Motsoeneng. “E.tv must make a contract with us if it wants to use our channels.”

But e.tv says there is an agreement between OpenView and the SABC on carrying SABC1, SABC2 and SABC3. “OpenView HD has been carrying the channels for the past few weeks and will continue to do so,” says Bronwyn Keene-Young, COO of Sabido Investments, the owner of e.tv. She says OpenView is fully subsidising the cost of the SABC’s carriage on the platform, but gives no further details.

The SABC’s 1, 2 and 3 channels are attractive to broadcasters as they are accessible to the widest possible SA market and are the oldest TV brands. Its popular soapies, the long-running Generations, Isidingo and 7de Laan, have millions of dedicated viewers and attract billions in advertising money.

Though the recent deal with MultiChoice raised eyebrows, Motsoeneng says they have a long relationship. For instance, there has been co-operation between the SABC and SuperSport on broadcasting soccer matches, in particular those featuring Bafana Bafana.

Before the emergence of e.tv in 1998, MultiChoice’s M-Net was available on the SABC on a limited daily time slot. Their new agreement means that possibility is again open to the SABC. “We can go to MultiChoice and request a channel of theirs be flighted on our platforms,” says Mokhobo.

That would be a channel offering content of national importance, and not to be viewed solely by the paying audience of MultiChoice. “We are still in discussions about having rugby matches flighted on the SABC.”

This further isolates e.tv.

Source: Financial Mail – Sikonathi Mantshantsha