E.tv launched its Openview HD free satellite service last month, presenting a strong challenge to MultiChoice and the SABC.
On Monday, Sentech, the state signal distributor, launched Free-vision, which is located on Intelsat 20, the same platform used by DStv. Sentech said South Africans would not need to install a second satellite dish or change the position of their existing satellite dish when joining Freevision.
MultiChoice sees the pay-TV market as its own special niche, with the SABC now on its side.
“When e.tv announced Openview HD we said we would reserve our rights. We don’t believe that e.tv should be doing this,” SABC spokesman Kaizer Kganyago said.
Media Monitoring Africa director William Bird said it did seem that e.tv had found a loophole in its terrestrial broadcasting licence, and it was good that the broadcaster had gone ahead as it presented a serious challenge to MultiChoice’s dominance.
Mr Bird, who has had sight of the MultiChoice-SABC contract, said he believed it was bad for the SABC and the country. “This is a devastating development for a new democracy such as ours, because it all but gives a commercial broadcaster total control over a public broadcaster, which is unheard of.”
Mr Bird said MultiChoice had the brains, brawn and influence to beat e.tv at the pay-TV game.
In July, MultiChoice and the SABC signed the contract under which MultiChoice will pay the SABC R553m over a five-year period to broadcast its recently launched 24-hour news channel.
The SABC will have to launch a 24-hour entertainment channel, as well as give MultiChoice exclusive access to the SABC’s archives. The contract also secures MultiChoice the rights to broadcast events of national importance, including funerals of presidents.
The SABC has also surrendered its rights to demand access control for the set-top boxes, or decoders, that will be necessary for the public to buy once the terrestrial broadcasting system migrates from the 38-year-old analogue system.
The government has already made plans to subsidise these decoders so they would cost about R700 to ensure that poor people will be able to afford them.
Mr Bird said the contract, while great for MultiChoice, is potentially devastating for the SABC in financial terms. “MultiChoice will pay the SABC about R100m per year for their channels, but it will cost the SABC far more than that to run them. I predict that within a year’s time we will have another SABC governance and financial crisis, and everybody will be wondering why.”
Former SABC board member Suzanne Vos praised e.tv’s initiative to launch Openview HD, saying it made sense for the lower-income market segments, but that it raised the question if it was sustainable without a premium sports offering.
This article was published by Business Day Online.