Kwese’s big plans for a free HD sports channel in South Africa

Kwese Free TV plans to launch five free-to-air TV channels in South Africa, one of which will be a high-definition sports channel.

ICASA awarded Kwese with a licence to broadcast on 18 March, along with a radio frequency spectrum licence.

Zolile Ntukwana, the group executive for regulatory affairs at Econet Group, told MyBroadband about its plans after ICASA’s announcement.

Econet, which also owns Liquid Telecom, holds a 20% stake in Kwese Free TV. Royal Bafokeng Metix, which is part of Royal Bafokeng Holdings, owns a 45% stake in the new broadcaster. The remaining 35% is owned by Mosong Capital.

Ntukwana said that this makes Kwese Free TV a majority South African black-owned broadcaster.

An executive team for Kwese Free TV has not been appointed yet, but Ntukwana said that between the three shareholders there is a pool of management candidates to draw from.

One free HD channel

ICASA awarded Kwese Free TV with 55% of the capacity in “MUX 3”. MUX 3 is a range of frequencies for digital terrestrial television in South Africa.

Ntukwana explained that the capacity they applied for could be used to launch 11 standard definition (SD) channels, or one HD channel and four SD channels.

They elected to apply for a total of five channels in South Africa to provide a compelling service that offers a sports channel similar in quality to SuperSport.

The other four channels will be general entertainment channels, Ntukwana said.

Sports rights

Econet operates Kwese in 18 countries in Africa, excluding South Africa, and holds the pan-African free-to-air rights for several sporting events.

Kwese Free TV will therefore not have to bid for sports rights from scratch, and will leverage Econet’s existing sports rights for its HD sports channel.

“The South African shareholders of Kwese Free TV will be getting the benefits of the rights bought by Econet outside of South Africa,” Ntukwana said.

In the longer term, this will also allow the costs of acquiring content for the channels to be spread over the 19 regions where Kwese broadcasts.

While the goal is to provide a compelling free-to-air sports channel for South Africa, Ntukwana said it is important for people to understand that they will not be competing directly with SuperSport.

Sports rights-holders decide which broadcasters they will be providing their content to, and they dictate the terms.

Last year, for example, Kwese obtained the free-to-air package for the FIFA World Cup. The package included half of the tournament’s matches, 32 live matches in total, including the final.

Kwese then sub-licensed its rights to broadcast the FIFA World Cup to several public broadcasters around the continent.

“FIFA wants to provide this licence to broadcasters with the widest reach,” Ntukwana said.

Another example is the English Premier League, which sets aside 20% of its 380 games as free-to-air rights – usually with at least one live game on Saturday and Sunday.

These are usually the earlier games, but the 20% also includes a few big matches as the Premier League sees free-to-air as a marketing ploy for its paid-for packages.

Ntukwana cautioned that while Econet does have the free-to-air rights to broadcast the Premier League, this doesn’t guarantee it will have them when it launches Kwese Free TV in South Africa.

The current Premier League broadcasting rights expire at the end of August and will be up for renegotiation.

“What we currently have may not be what is eventually available,” he said.

Sports rights that favour free-to-air

Ntukwana added that while there are rights-holders like the English Premier League – which prefers to sell to pay TV operators – there are others which prefer to sell their rights to free-to-air players.

Two examples are FIFA and the Olympics. “Their motto is to bring the spirit of the sport to the world,” said Ntukwana.

Ntukwana said Econet is also in talks for broadcasting rights to the UEFA Champions League.

Sustainability

This plan raises the question of sustainability, however.

Etv posted a R1.6 billion loss last year, raising questions about how Kwese Free TV aims to be sustainable without the government subsidy that the SABC receives.

Ntukwana said Kwese has a very different approach in mind, as it works with companies that want to place advertisements throughout the African continent – not just South African advertisers.

He highlighted Total as an example of a company that buys advertising on a pan-African scale.

“We are excited to bring diversity and [great] content to the South African public,” concluded Ntukwana.

“We’re nervous, but looking forward to it.”

Now read: DStv vs ICASA – The big SuperSport problem

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Kwese’s big plans for a free HD sports channel in South Africa