South African Government announces that it will tackle the monopoly on sports rights – Policy due by March 2014
The regulation of TV sports rights has happened in Europe and now looks set to happen in South Africa. Yunus Carrim, the new Minister for Communications has promised action by March 2014. This could be the beginning of a new era that will shake up broadcasting across the continent. Because if there is regulation in South Africa, it will only be a matter of time before it spreads to places like Kenya and Nigeria. Russell Southwood looks at the implications of this shift in regulation.
DStv was for a long time the only Pay TV operator in Sub-Saharan Africa. It invested before anyone else had the nerve to do so and as a result it has collected a number of exclusive content agreements. The most prominent of these agreements and the one that drives a significant part of the Pay TV business is sports rights in general and the UK’s football Premier League in particular.
Some challengers have wrestled these rights away from DStv but the high financial cost has usually bankrupted them. The death of GTV and HiTV can in large part be ascribed to the price they had to pay for the English Premier League rights.
Speaking at the launch of ANN7, a somewhat disastrous 24-hour news channel financed by South Africa’s Gupta family (see Broadcast News below), Carrim said: "We're working toward finalising a new policy on broadcasting and we'll have done so by the end of March 2014”.
"Currently premium content is locked up with one broadcaster – especially in terms of our country's major sport – rugby and soccer needless to say, and cricket. We need to ensure that this becomes more accessible to the widest range of citizens possible."
He has tasked ICASA, the South African communications regulator, with coming up with a policy on increased competition in the broadcast sector. South Africa is one of Africa’s largest broadcast markets but still has the smallest number of broadcasters relative to its size. Even the citizens of smaller Sub-Saharan countries have more choice from more broadcasters. However, anyone familiar with South Africa’s policy cycle and the glacial pace at which ICASA moves, will know that this may be delayed but is likely to be completed if the Minister stays in post.
Regulation of premium sports rights in Europe has meant that the English Premier League has had to offer more than one package of matches to Pay TV broadcasters. In the UK, Sky is compelled to offer a package of matches to its deadly rival BT. It dilutes but does not completely break the link with exclusivity that keeps rights prices so high. However, the regulation of sports rights has not seen the dire predictions of financial collapse come true and it has allowed for a greater level of competition.
Football relies on the high prices paid for rights to pay for expensive things like the talent, the players themselves. However, what the talent is paid is a function of what income there is in the market. A parallel can be drawn with Hollywood where recently there have been some stars who have acknowledged that they have been paid less because there is less revenue available.
As African broadcasters know, there are two categories of sports rights, those for Pay TV channels and those for Free To Air channels. The Free To Air broadcasters have struggled to pay the fees demanded by the EPL rights owner for them.
Instead of a healthy EPL Free To Air audience developing across Sub-Saharan Africa, into which Pan-Africa advertisers can invest with some degree of confidence, the availability of coverage has been spotty at best. This lack of effective Free To Air content has placed an even greater premium on the Pay TV rights. The opening up of different packages – at different prices – would therfore have a healthy market opening effect.
In May, long-time South African broadcast regulatory specialist Lara Kantor, now Regulatory Affairs Group Executive at e.tv, the free-to-air commercial broadcaster, told TechCentral, the IT website, that the issue is a "crucial area that needs to be addressed" as South Africa makes the switchover from analogue to digital terrestrial television.
But this is not a battlefield that is just about the English Premier League. In the medium to long term, the key skirmishes will be about local sports content and the development of local talent. There has already been an exchange of blows at this level in one African country and more are likely to come as the market gets more competitive.
DStv currently only has two competitors who are likely to give it a run for its money on a Sub-Saharan basis: Wananchi’s Zuku and the Chinese Star Times. The latter recently bought into South Africa, currently DStv’s cash cow and now has to turn Top TV into a challenger. Wananchi recently appointed former Supersports executive Gary Rathbone as Head of Sports and he has always said publicly – both in his former job and in his current one – that local sports are the wave of the future. Watch this space.
New video clip briefings this week:
The “What are TV White Spaces?” Briefing:
Kai Wulff on Google's TV White Spaces pilots and why they are important for developing countries
Other video clip briefings to keep you ahead of events:
Successful South African films:
Helen Kuun, Indigenous Media Distribution on her 2 hits of 2012 & 3 promising new releases in 2013
Impact of online viewing on cinema-going:
Helen Kuun on putting films on South Africa's iTunes and its impact on cinema-going
The Box Office and Critical Success of Otelo Burning:
Sara Blecher on how Otelo Burning came to be made and its reception in South Africa and elsewhere
Sara Blecher’s new film project:
Sara Blecher on her new film about a women entrepreneur in Joburg's African district, Yeoville
South African horror film from the townships:
Pascal Schmitz on South African horror film Blood Tokoloshe
For breaking news, follow us on Twitter: @BalancingActAfr