- December 28, 2004
- Posted by: admin
- Category: Media & Broadcasting
Over the past six years, South Africa’s first free-to-air television station, e.tv, has evolved into a big success story. But the station started on shaky ground, CEO Marcel Golding tells Jeremy Lawrence.
As chairman of Hosken Consolidated Investments (HCI), the largest shareholder in e.tv, Marcel GoldLing was merely the man behind the scenes when the broadcasting licence was issued. Cracks in the initial business plan started to show six months after the launch of the station, he says, as it became clear “there was a high level of haemorrhaging in the company “.
“We were burning close to a million rand a day. We had a business plan that said we would require about R6OO-million to get the station off the ground over a five-year period. We realised that the capital requirements were not adequate and that the incumbent management had lost the plot, so to speak”.
In an attempt to save its substantial investment, HCI placed Golding at the head of the beleaguered station as chief executive officer. The decision proved the right one as e.tv became profitable for the first time earlier this year.
HCI, which has a 66% stake in e.tv, recorded a headline profit of R2,9 million in June this year compared to a loss of R98, 3 million the previous year. It said e.tv had contributed R21 million to its bottom line for the period ended March.
“I wasn’t a television executive, I had no experience. I sat down and worked out a model of what this business was about.”
“ The philosophy of the company at the time when I stepped in was like: “If you don’t know where you’re going then any road will do.”
“There wasn’t a common vision, a common purpose and a common strategy. So I appointed Quraysh Patel first, as my principal adviser.”
Golding does not mince his words in sketching the dire circumstances of the station when he became actively involved.
“We were getting demands from the employees, we were faced with a liquidation”.
A three pronged business plan dubbed “The Golding Triangle”, because of how often he kept repeating it was developed to try to turn things around. This new business plan, according to Golding, focused on programming, audiences and revenue.
“We had very low audiences and very low revenue and lots of problems. Firstly, what we had to get right was our programming. There was no concept of proper scheduling in our strategy.” “Once we got our programming right we’d be able to deliver the audiences. Once you deliver the audience on that base you can build the revenue. This took a year to sort out.”
By the very nature of its size, the television industry in this country is extremely competitive, and e.tv’s biggest challenge has been trying to stay one step ahead of the competition .
“You have to appreciate one or two important facts: e.tv operates in a very unlevel playing field. In this sense, the other television stations, whether they are free-to-air or whether they are paid for, have multiple sources of revenue.
“In the case of M-Net, there are subscription fees, the open window and it has advertising. “The SABC has three channels. SABC also has three sources of revenue. They have licence fees that we don’t get a cent of. They have advertising, and they have government as the lender of last resort, and they have radio stations that they can advertise on.”
It was within this context that the station approached revamping its programming and generating income.
“ We came up with a movie strategy. We showed more movies than everyone else.” Golding says simply.
Those that may have something to say about the choice of e.tv’s movie strategy will do well to remember that, even though some titles may have been questionable, soon the SABC latched on to the idea and modified its programming in a similar way.
Movies aside, though, from news to pure entertainment, e.tv has continued to come up with innovative ideas, most recently tapping into South Africans’ thirst for wrestling.
With its already popular broadcasts of the American World Wrestling Federation, e.tv and most specifically, as Golding offers, Quraysh Patel, started the African Wrestling Federation (AWF).
This locally produced series of wrestling shows, which tour the country and are also broadcast on the station, may not be everyone’s cup of tea, but it is earning its keep. The station’s investment in AWF has been an impressive decision.
Not only does AWF represent part of the stations local content component and boasts huge viewership figures, it has also proved to be a worthwhile financial investment for the station. “We have to develop new concepts and AWF is just one of those concepts. We have to keep our point of difference,: Golding explains.
Another strong point of contention has been the battle of the evening news.
The station decided to extend its news bulletin to one hour, starting at 7pm, and about a year ago SABC3 moved its news bulletin to the same time.
Although viewership figures have indicated that SABC3 still leads. Golding again believes it is one of the subtle changes the station employs that define it.
“They (SABC3) were doing well at 8pm and we are doing well at 7pm. You are serving different markets. If you miss the 7 o’clock news, you can still catch the 8 o’clock news. The consumer was being served best. I think they didn’t like our pay-off line: “Catch the news at seven be cause by eight it’s history,’ he jokes.
When it comes to e’tv s success, Golding continually points to Patel’s invaluable contribution. This reinforces his strong belief that his staff have made and continue to make the station a success. Patel, however, has been the centre of some speculation recently over his absence. This is something that Golding cites as a reason for e.tv not “blowing its own trumpet” in the media and rather choosing not to make public statements in the media.
“Quraysh has been working flat out for four years and now he is taking a break. It does get to me when we get these rumours going around about him being fired or forced to take leave.”
“In television there is a perception that it’s a very glamorous business and people have a great pretence about their self-importance. There are lots of airs and graces. What we tried to do was to demystify television (for the employees). We’re very different. We don’t have a legal department like the SABC, a programming department where you have five or six different programme buyers. We’ve merged a lot of those things into one – multiskilling people,” says the man who up until a year ago was still doing all the programme buying for the station.
He believes that the biggest investment the station has made has been in its people.
“Probably 90% of the staff are new, young. Eighty percent are black. When I took over the company we developed a new culture. It’s a culture of strong commercialism, a strong culture of discipline, a strong culture of entrepreneurialism, a culture of going beyond the call of duty.
“What we had to realise was that we were in an exceptionally fortunate position in that we were given a licence in a democratic country, and we had huge responsibility to exercise this franchise in a very thoughtful manner and with great care.
“We had the opportunity to develop new talent, and build new people with a vision of contributing constructively to democracy.
“Many people who went to the SABC were poached from us – we trained them and they were poached – but that is how it is. We can’t compete on a salary basis, but we can compete on a work environment.
With the station now on its feet, Golding is also looking to the future and new prospects for himself and HCI’s investments. “About 70% of my time is now devoted to HCI. Some of the plans we had up to now have been to expand e.tv as a business in television. In so far as this side of the business is concerned, I’d say it could run itself. People like Quraysh and myself will focus on other things that will enhance e.tv as a business.”
Golding says he also has dreams for Africa, using media to help in the continent’s development and getting involved with the Nepad (New Partnership for Africa’s Development) concept.
“We believe that one can’t sensibly reconstruct Africa unless there is constant information going to the people. And the way information can be communicated is via television.”
In addition to the success of e.tv, HCI has also acquired interests in other forms of media, in particular the popular youth radio station Yfm. In May the station hit the headlines when it was reported that the founding chief executive officer, Dirk Hartford had resigned amid industry speculation that HCI was taking a stronger interest in its investment.
“We believe the business has a lot of potential, but you need to pay attention to it.” says Golding. Part of this plan will also mean using the television and radio stations to promote each other. “To be honest we’ve kept a very low profile,” says Golding.
“But the idea now is to get a better synergy between the two businesses…. and already things have improved in terms of efficiencies. Again it’s just bringing the discipline that we developed in e.tv over time. Not that it was undisciplined, it was just different. We’re trying to make it a much more efficient business.”
Source: The Star – Jeremy Lawrence