South Africa: Huge Pay-TV Potential - Telkom Media

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Pay-TV applicant Telkom Media says that its own market research shows a high level of willingness to pay for subscription television services amongst South African consumers. Telkom Media's initial concept testing indicates that the market potential for satellite subscriptions could be as high as 2.3 million by 2012 - more than double the current number of households with access to pay-TV.

Telkom Media publicly presented its application for a broadcasting licence to ICASA on Tuesday, 12 June 2007. Telkom Media CEO Mandla Ncgobo says the favourable economic climate in South Africa creates the ideal environment for the launch of pay-TV. "The reason we don't have a higher uptake of satellite television services is that the 'middle market' is not addressed by the incumbent satellite player, DStv, which focuses on high-end consumers. More flexibility in the structure of packages will pave the way for greater affordability, allowing us to offer bouquets of channels that start at approximately R100 a month."

Shareholders in Telkom Media include Telkom, Anant Singh's Videovision Entertainment, MSG Afrika Media and WDB Investment Holdings. According to Telkom Media, this shareholding - as well as the recruitment of a number of industry experts - combines a wealth of electronic media expertise and supports its empowerment policy.

Telkom Media is currently 41.5% black owned and pledges to ensure that for the duration of the licence period, its BEE shareholding will be maintained at a minimum of 40%. As evidence of their commitment to BEE, the shareholders have pledged to either retain their shareholding for five years or to dispose of such shares only to similarly qualified BEE groups.

Telkom Media will broadcast predominantly in English, but says Ngcobo, "in order to accommodate the diverse South African market, interviewees in news and current affairs programmes will be interviewed in the official language of their choice and live news events will be broadcast in the language of the event.

"Local sport and local content is also important in terms of driving penetration of the target market, and budgets have been made available to ensure provision of sports coverage, local news, local music and a broad range of local content across other key genres. Telkom Media's entry into the market will provide a stimulus to the local TV production sector, and we aim to establish meaningful relationships with independent producers. In addition, special accommodation will also be made for people with disabilities. Telkom Media will provide for multilingual closed captioning or sub-titling, and be accessible to the hard-of-hearing and sight disabled people. Availability will be clearly identified in its programming guides and in any programme schedule material provided to the public."

Recent appointments to Telkom Media include Connie Molusi as chairperson, Lourens Van Niekerk as CFO, Jimi Matthews as head of news, Hannelie Bekker as head of general entertainment, Clare O'Neil as head of advertising sales, and Setumo Mohapi as chief technical officer.

(Biz-Community (Cape Town), 19 November 2007)