{"id":39733,"date":"2011-12-12T16:24:15","date_gmt":"2011-12-12T14:24:15","guid":{"rendered":"http:\/\/mybroadband.co.za\/news\/?p=39733"},"modified":"2011-12-18T01:23:46","modified_gmt":"2011-12-17T23:23:46","slug":"toptv%e2%80%99s-next-challenge","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/broadcasting\/39733-toptv%e2%80%99s-next-challenge.html","title":{"rendered":"TopTV\u2019s next challenge"},"content":{"rendered":"

For TopTV<\/a>, the feisty competitor to MultiChoice<\/a>, 2011 has been a good year. But this may change. While it was lauded as one of the fastest growing TV platforms in emerging markets last year, take up of the pay-tv provider\u2019s services has slowed.<\/p>\n

This is forcing the company to sharpen its pencil as it heads into the new year.<\/p>\n

In the 18 months since its launch in 2010 TopTV picked up 360\u00a0000 subscribers. It needs 400\u00a0000 subscribers to break even, a target that Vino Govender<\/a> CEO of holding company On Digital Media (ODM)<\/a> believes can be met in a year.<\/p>\n

TopTV targets consumers in the LSM\u2019s five to eight. Its entry level offering is R99 and premium offering is R269, a far cry from DStv\u2019s premium bouquet of R590.<\/p>\n

The challenge the pay-tv company faces, he says, is not simply expanding the subscriber base, it is retaining those customers once they have signed on. \u201cIn the LSM groups that we target there is a high churn rate. We are about 100\u00a0000 subscribers away from our break-even point.\u201d<\/p>\n

To attract new customers TopTV is launching new products, such as its Playboy bouquet. It also plans to enhance its current sports offering which includes football channel Setanta Africa, SABC<\/a> sport and Euro Sport. The new sports channel was due to be introduced this year, but has been delayed. ODM is also working on enhancing its backend to improve customer service. The introduction of PVR (personal video recorder) is a priority. \u201cWhen you start offering adult entertainment you need to offer a PVR service,\u201d says Govender.<\/p>\n

But PVR and high definition TV are unlikely to be available for another 12 months. \u201cWe are currently evaluating our options for implementing new technologies, and have issued a request for proposals.\u201d Video on demand, another proposed offering, is not on the radar yet. \u201cWe can only consider video on demand once we have made decisions around which technologies we should use,\u201d he says.<\/p>\n

ODM does not own its TV broadcast platform. Instead its technology requirements are provided by SES, the European satellite operator and pay-TV service provider. It built the TopTV broadcast platform and manages the content scheduling and the broadcast signals. This is not an unusual decision for a pay-TV start-up, says St\u00e9phane Goebel<\/a> the VP for global sales at SES Platform Services, a subsidiary company. \u201cThis frees the company to focus on acquiring and licensing content and building a subscriber base.\u201d<\/p>\n

SES holds a 20% stake in TopTV, along with the IDC, the National Empowerment Fund and the Development Bank of SA. \u201cWe do not usually invest in our customers,\u201d says Goebel, \u201cbut our objective is to grow pay-TV in Africa. With our experience we can give companies like TopTV a leg up.\u201d<\/p>\n

Initial funding for TopTV was R1bn, however a new round of fund-raising is about to begin. Govender did not indicate which partners were likely to contribute to the next round of funding. Any pay-TV business from start up would require about R3bn to reach the breakeven point, says Govender. \u201cOur business plan suggested we would be fund raising as early as May this year.\u201d<\/p>\n

SES plans to exit its investment as soon as possible. Initially it was thought this would be via a listing, but a listing is not feasible yet, according to Govender.<\/p>\n

It is possible a new partner could come on board, or buy out SES, in the form of another pay-TV platform. \u201cSES has done what it needs to. Our satellite platforms work.\u201d<\/p>\n

A big brother could be a welcome addition.<\/p>\n

Multichoice has turned into a more formidable competitor than initially expected. In the same time that TopTV picked up 300\u00a0000 new customers, Multichoice acquired another 900\u00a0000 \u2013 mostly thanks to the soccer World Cup. \u201cWe knew they would react to our offering. But we did not expect them to provide a competitive offering so fast, nor did we expect them to allow for the cannibalisation of their higher tiered products.\u201d<\/p>\n

He smiles. \u201c\u201cThere is no book out there that says \u2018How to start pay-TV 101\u2019. We have spent time learning from foreign players. In many cases not having the knowledge has helped us to do things differently and more efficiently.\u201d<\/p>\n

What worries him is the economy. December usually sees high numbers of new consumers switching on their services, but this year may be different.\u00a0 \u201cThere are 8m households in debt. With disposable income as limited as it is, I don\u2019t anticipate a lot of growth this Christmas.\u201d<\/p>\n

The weakening rand is also an issue as many of the company\u2019s costs \u2013 content and satellite services – are dollar based.<\/p>\n

But what is gladdening his heart is the fact that the company has the critical mass to attract advertisers. \u201cWe are heading down the road of selling commercial air time. We expect to be cash-flow break even within six months.\u201d<\/p>\n

Source: Moneyweb<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A tough road ahead for SA\u2019s second pay-TV operator<\/p>\n","protected":false},"author":3293,"featured_media":25203,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[85,35,475,6461,7079,87,6457],"class_list":["post-39733","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-broadcasting","tag-dstv","tag-headline","tag-multichoice","tag-odm","tag-ses","tag-toptv","tag-vino-govender"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/39733"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/3293"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=39733"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/39733\/revisions"}],"predecessor-version":[{"id":40021,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/39733\/revisions\/40021"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/25203"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=39733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=39733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=39733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}