Tuesday, November 30, 2010
You're reading it here first.
Today, On Digital Media's (ODM) TopTV has been in commercial operation for exactly 6 months.
The new pay TV operator in South Africa marks its first 6 full months since its commercial launch in May having passed a few important benchmarks: that of public perception as a viable (pay TV) business; a value proposition that's not only different enough but also proved to be enticing enough to get new subscribers to sign up; and a lot of goodwill from the larger TV industry not just for its offering but the promise of longterm, spin-off yields for local productions and TV content partnerships in the future.
Since its debut exactly 6 months ago TopTV has immediate shaken up the local pay TV environment, the TV biz, and has shown that some changes to the existing pay TV subscriber model (and bigger subsidization! - some might say by necessity) is indeed possible. While the start-up hasn't been without its mistakes, faults and certain shortcomings, TopTV's arrival and presence during the past half a year has heralded a few welcoming (and surprising!) changes for the better for South African television.
Here's 6 important ways that TopTV has changed the South African TV landscape in the past 6 months.
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Decoding decoder sale incentives.
When TopTV sold out, again sold out, and then rapidly sold thousands more TopTV decoders at the beginning of May, it was indeed part customer mob mentality good luck but two parts shrewd marketing strategy. ODM is obviously taking a huge knock somewhere on the overall balance sheet for its decoder availability and innovative retail distribution channels approach (Pep Stores insider sources who sat in the meetings tell me that that TopTV decoders in stores agreement don't come cheap!) and by the massive way its subsidizing TopTV decoders and installation cost. Just think: the price of a TopTV decoder that has now dropped to R299 with TopTV basically fully absorbing the decoder and installation cost. But its paying off and everyone noticed.
In the retail biz its called a ''loss leader'' – something highly desirable that quickly drives a massive uptake by consumers who could potentially become long term customers. The last time we time we saw it was when Pick n Pay sold the last Harry Potter book for way less than what it cost them (cost price) in essence making a ''loss'' but gaining feet coming into their stores.
Not only has TopTV signed up a lot of customers, exposed a lot of new people to pay TV, created a lot of free buzz for its inventive decoder sale model and rejuvenized satellite TV installation skills, but is actually changing the very nature of the pay television business in terms of customer expectations. It's doing it in two ways. First of all its changing the perception of customers. Potential pay TV subscribers will never again settle for paying full price for decoders or pay TV installations that's exorbitantly expensive or seems to be only marginally subsidized. And new entrants will simply have to do the same or better while existing competitors like MultiChoice also already caved by adopting the same bigger subsidized model . . . similar to what overseas pay TV subscribers have been enjoying for a long time already.
Hot show? Now there's more than one place to go.
With the start of M-Net in 1986 the SABC blatantly caputilated. The first window of everything slightly-buzzing would henceforth seemingly forever debut first on that pay TV channel where a blue ribbon came flying over Table mountain promising ''magic''. It took TopTV under 6 months to break M-Net's stranglehold on getting its first highly buzzed-about, immediately acclaimed (and clamored for) hot show. Let nobody tell you that M-Net would not dearly have liked to have the zombie awesomeness that is The Walking Dead on Fox FX (TopTV 110) first.
And in future there will definitely be more hot, premium shows starting on some TopTV channel first, merely because the platform exists. It's inevitable and its good for competition in South Africa since it makes the TV viewer and TV subscriber the winner.
More cool first-run and fast debuting shows after the American broadcast date is showing up on TV channels that's part of TopTV and is a welcome and refreshing change to M-Net that thought it could simply buy itself to premium first place. Now all the different TV channels on pay TV platforms will have to step up their game and throw more than just money and good personal relationships with content distributors in the mix.
If you look carefully you'll find a myriad of other quality gems spread out over various TopTV channels but like any worthy treasure you have to go on a bit of a treasure hunt through the schedules of your own. Have you realized that the The Wendy Williams talk show on BET (TopTV 190) is the same very latest episode going out in South Africa on the very same day as America. A big, little-known accomplishment. And since she talks about pop culture, its perfect and not dated at all. Cake Boss on Discovery Travel & Living (TopTV 453) shows up, secretly, very soon after it's been on Discovery (DStv 121) as to make the time lag difference negligible. A mixed diet of MSNBC (TopTV 410) and Fox News (TopTV 405) are as good as a mix of CNN International (DStv 401) and Sky News (DStv 402) for news junkies with lots of special actuality shows of their own.
Forward with fragmentation
SABC1 can continue to dance its butt off. The writing is on the wall for you big guy. With your lazy, non-caring, unresponsive, too-big-to-fail attitude, South Africa's biggest TV channel in sheer viewership is having its hiherto viewership loyalty and viewership slowing eroding and chipped away by major channel fragmentation – and TopTV just added 55 or so new reasons. More and more viewers are discovering more and more choice when it comes to television.
And even five minutes spend on another channel from where you used to flick to with your remote, is enough of an incentive for advertisers to follow you and advertise elsewhere.
More TV channels means harder work for individual broadcasters and individual TV channels and indeed, a lot of them are working a lot harder to be heard and to try and tell viewers about their line-ups, great shows and schedules to entice viewers to tune in.
One day, in the not so distant future, SABC1 will be just another channel, when like in Back to the Future II, Marty gets home and turns on various channels at once. The splintering of the available TV audience at any given moment in South Africa didn't start with TopTV, but its addition over the past half a year has certainly given the audience fragmentation process new impetus and hastened the speed of a true channel multiverse.
Talk back to television
TV viewers are no longer willing to just sit and take it. A massive amount of viewers are fast being trained – albeit Pavlovian style (but who cares, it's all good) – that they have power, can complain, that things then happen and can change for the better. Say hello to the TV prosumer - compliments of TopTV. TopTV is galvanizing a brand-new set of TV viewers to be vocal about what they want, and what they don't like. That is good for television as a whole in South Africa.
From channels to schedules, from shows and no-shows, from repeats to installation issues, new pay TV subscribers in their thousands are realizing that if they pay for something, they can demand lots of things. And they do.
Their vocal visciousness and perfunctory praise from social media to call centre interaction and through many other means, are creating and shaping a new, much better informed, quicker responding, higher quality demanding TV vox populi. Interactive television isn't just about technology. It's about viewers speaking up for what they want and what they want to see. The couch potato in South Africa is fast finding its voice.
Driving digital television (and awareness)
You wouldn't have guessed it but a lot more very ordinary South African TV viewers are clued up about and know (although they can't afford it) satellite television, and (gasp!) digital television. A lot of them know a lot more than what even pilot study researchers expected about South Africa's coming switchover to digital terrestrial television (DTT) broadcasts.
In an interesting, although indirect way, TopTV with its massive roll-out of its own highly subsidized TopTV decoders and satellite dishes are aiding the awareness, the process of, and in an incremental way the switch-over to what digital television actually entails.
More consumers from more lower level income bracket levels are becoming familiar with not just new terms but the actual hardware of a satellite dish, a set top box (STB), a remote control, as well as intangible digital television concepts such as an on-screen, electronic programme guide (EPG). Where the South African government is lagging far behind, TopTV as a commercial pay TV service is already making big inroads in preparing the road, unintentionally, for the eventual digital migration of the ordinary TV viewer in South Africa.
A stronger, more robust and expanding local TV industry
Those TopTV channel promos come from somewhere. So does the new local shows on ASTV (TopTV 177) after it got added and the channel gained more security and a much wider footprint after being included on the TopTV platform.
Technicians, engineers, upskilled satellite installers, even call centre operators versed in specific technical pay TV enquiries – as well as a lot more, and varied, skilled people are and will be employed in the overarching television business in South Africa because of the new entrant. More people are working in television today than a year ago because of the commercial existence of TopTV. And it will continue to grow.
TopTV's presence counters some of the impact of an industry battered by the shenanigans at the beleaguered public broadcaster and the sluggish economy that’s affecting the TV biz and is especially hard on local TV producers. Once TopTV starts commissioning local programming in earnest (besides its initial outset, upstart, local production requirements up til now), it will have a longterm positive impact on the wider production industry. For now, its nascent steps – the primary one which would be the signing of ASTV and the platform support TopTV is giving it both in skills, money and technology – is hopefully, most probably, an indicator of the shape of things to come.
ALSO READ: TopTV as a Model T: Why start-up TopTV is turning into a game-changer in the South African pay TV market.