THE DECISION by e.sat, one of the five newly licensed pay-TV channels, not to become an independent broadcast channel highlights what’s been obvious right from the start: the South African market isn’t big enough to sustain five additional pay-TV channels. There aren’t the viewers or the ad revenue. Most observers believe there’s room for two – but even that looks a trifle optimistic, given that a much bigger market, such as Britain, can really carry only one.
So e.sat, a sister company of free-to-air channel, will now become a supplier to MultiChoice, using its DStv platform to launch a 24-hour news service. Except that a 24-hour news service may also be difficult to make a profit from -and vastly costly to run – the decision is a sensible recognition of the realities of the TV marketplace.

But you have to ask what was going through the minds of the regulators when they belatedly awarded these new licences? Did they think they were serving the ends of the free market and SA’s Constitution by licensing too many players? The trouble with regulation is that it’s fundamentally opposed to the principles of the free market. If it had been left to the market to decide we’d probably have had only one new pay-TV station. But if you’re going to interfere in the process of freedom you have to do it responsibly. Handing out too many licences does no good to anyone.

Source: Finweek