Platco will not be making money from advertising, but from charging free-to-air channels for carriage on its subscription-free OpenView HD satellite TV platform.
Nonge said that OpenView HD will be a very low cost setup and that the channels themselves make money from advertising while Platco just charges them for carriage.
They will be able to keep their costs down because they decided to go with a horizontal model, which Nonge said is somewhat different to other satellite operators.
Platco won’t interact directly with the platform’s viewers at all, he explained, as their distributors will source and sell decoders (also called set-top boxes) and deal with warranties, installers, and customers.
“To manage a subscriber on pay TV costs a lot of money,” Nonge said. “Hundreds of millions. That’s the key difference in our business model.”
Set-top boxes will be co-branded by Platco and the distributors and must conform to a minimum specification that Platco sets.
The minimum specification includes support for high definition (HD), but not personal video recording.
Nonge said distributors pay a small royalty fee for the box, but at R1/box, he explained it’s not instrumental to their business model.