Free satellite TV business model explained

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.

This is according to Maxwell Nonge, managing director at Platco Digital, a sister company to E-tv that has said it will launch OpenView HD during October 2013.

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.”

Ellies, Space TV, Switch Digital, and ABT are the initial four distributors Platco said it has partnered with for the launch of OpenView HD.

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.

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Free satellite TV business model explained