African pay-TV hits 5 million subscribers

Technology & Convergence
The Department of Communications will hold a conference on 29 April 2010 to finalize the technology standard for TV decoders, which will be used to receive a digital broadcast signal. According to a report of a local media, Business Day, on 29 April 2010, the technology standard, which mainly applies to software, is one of the critical components of the planned move from an analogue broadcasting signal to digital. Failure to finalize the standard could derail the country’s introduction of a digital “platform” by 2015. The technology will address issues such as the return path, a system that will enable the decoders to be used to access the internet, enabling consumers to use government websites to apply online for items such as identity documents. However, there has been talk in the market that the government wants to ditch the digital video broadcasting-terrestrial (DVB-T) standard that was agreed upon with the International Telecommunications Union (ITU) more than four years ago. Local broadcasters and signal distributors are already running tests for the DVB-T standards. According to industry reports, the government plans to adopt the Japanese standard – the integrated services digital broadcasting terrestrial standard – in use in Brazil. Mamodupi Mohlala, director-general of the department, said on 28 April 2010 there was a perception in the industry that the government had signed a “secret agreement” with the Japanese to adopt their standard. “There is no secret agreement. We are holding a colloquium to hear all sides from the Japanese, Europe, Brazilian and local industries on the standards that will be suitable for the country’s needs. We will pit all technologies against each other and understand the benefits and implications of each,” she said. Due to the upcoming Soccer World Cup, one of the most-acclaimed sports events in the world, the African continent attracts the attention of the world like never before. In addition to the sport's event, focus falls also on every aspect of lifestyle, culture (i.e. music) and history. On the broadcast front, one can recently observe a significant and continuous growth of the Pay TV market, with new entrants bringing more competitive services to market, writes Sylvain Beletre. The latest report from Balancing Act, titled “African Pay TV: A growing competitive market”, was released at the start of May 2010. The 23-page report, which includes 7 quantitative tables, looks at the continued growth of the pay-TV market in Africa despite the closure of continental player GTV in February 2009. The briefing paper reviews the variety of Anglophone, Francophone and Lusophone markets on the African continent to see who has market shares where and why. The report closes with strategic recommendations and best practices for success. Russell Southwood, CEO of Balancing Act and author of the report explains that overall, the African continent is about to reach the 5 million pay TV subscribers bar. There are a number of recent changes which explain why the African Pay TV is a growing competitive market. • On the technology front, the lower cost of digital equipment has motivated new players to produce more affordable content. • Satellite competition has become more intense, which means that costs will continue to drop. They have the ability to broadcast a TV signal across the whole continent in a simple way using for example DTH. On top, content providers, broadcasters and satellite operators have started to offer other broadcasters the opportunity to re-use their content flow in other territories for a fraction of the cost. • Pretty soon, the arrival of fibre cables along African coasts will lower current prices and enable Telcos and TV broadcast players to package attractive triple play offers. • Lastly, prices paid for TV content by broadcasters across Africa are sometimes up to 10 times cheaper than in other regions. • Recently, cheaper TV bouquets have already come to the market. With the launch of On Digital Media's TopTV days away, competition in the pay-TV market in South Africa is set to become more intense as it takes on DStv in its largest market. But below the radar there are several regional challengers squaring up to them in key sub-Saharan markets. However, the most important entry barriers remain prices, content quality, competition, regulation and technology / audience tracking. The report provides detailed description of key players and subscriber numbers by African regions. A best practice section reviews the content rights issues in Africa, as well as smart technical features to deliver that content. Anyone seeking to challenge the “big two” Pay TV players in Africa – DStv and Canal Plus – will be able to use the “Strategies for challengers” section from the report. As with most reductions in price, the number of pay TV users should begin to increase. There are still plenty of pay TV opportunities for serious and professional investors in several African countries. Hampered by insufficient competition, content and infrastructure except in selected locations, the African pay-TV market is currently dominated by a small number of players. In the longer term, growth will accelerate significantly as prices go down, regulatory opens and rising incomes enable new pay-TV entrants to take market shares. Over the next few years, Balancing Act expect these positive changes in the market environment to improve pay-TV subscription adoption rates in the region, leading to one of the world’s highest growth rate over the next five years. “It took us several hundreds of hours to check operators in the 54 countries, interview key players and aggregate data, and about twelve days for me to write and review the report. Unfortunately, it has been a tough job for us since several players do not want to release basic performance data” stated Author Russell Southwood, adding that “this paper should save a lot of time and money to busy researchers and commercial players in the broadcast industry”. The paper is priced at US$250 for a limited time only. Balancing Act plans on updating the report next year, and welcomes contributions for relevant parties. To order, contact: or order online at