Saturday, November 5, 2011
OPINION. South Africa's pay TV in peril: Why the Consumer Commission will break the pay TV industry if they force 'unbundling' of channels.
In my view as a professional journalist and TV critic, independent, unbeholden to any interests, and having covered television and the TV industry for the past 13 years in South Africa, the utter foolishness of the National Consumer Commission is going to break South Africa's pay TV industry.
I believe that the National Consumer Commission's ill-conceived attempt to force impractical, onerous and simply wrong rules on a vibrant sector will cause big damage - something which will leave the TV viewer and the average South African consumer not better, but worse off.
The misguided and shortsighted National Consumer Commission that is clearly out of its depth on the issue and has no idea of how the product works, is now victimising MultiChoice and On Digital Media (ODM) and has ordered South Africa's pay TV operators to so-called ''unbundle'' their TV channels. The Commission wants them to re-structure their bouquets and allow subscribers to pick individual TV channels. If enforced, the ramifications will be complex.
Taken on surface value it's a beautiful fantasy. In reality the pay TV model is an intricate and delicate eco-system of interdependent parts. A TV channel is not like a single song on iTunes you can just order or buy at whim, leaving the rest of the album you don't like. A TV channel is a dynamic continuous stream, itself populated by many bits of content, and that again is supplied or built by various production companies. Meanwhile pay TV operators like MultiChoice and TopTV have to intricately balance premium TV content as value propositions - the challenge being to bring TV channels to viewers by striking deals with content providers where the effort and the cost of doing that, outweighs the cost.
South Africa's pay TV operators have objected to the order by the National Consumer Commission. The National Consumer Commission seems clueless and oblivious to the fact that companies like MultiChoice, TopTV and M-Net are businesses. Their aim is to make money. If they could have made more money selling separate TV channels instead of selling bouquets of channels, would they not have done so long ago? Why they haven't is because it makes no commercial sense for them.
ALSO READ: Opinion: South Africa's National Consumer Commission seems clueless about why ordering pay TV operators to sell TV channels separately is a bad move.
If the misguided Commission really wants to meddle with television, rather investigate the value (or lack thereof) that viewers derive from the money paid in SABC TV licenses; why there's so much secret product placement on South African television, and why there's so much advertiser-funded production (AFPs) - programmes that viewers are not explicitly told are actually completely sponsor-funded shows.
Or maybe the Commission wants to explore the deregulation of the fuel industry so that petrol don't cost the same everywhere. Or allow alcohol to be bought after 17:00 on a Saturday, or address the rest of the actually really silly rules handicapping South African consumers. Nothing is wrong with South Africa's pay TV industry except their subpar customer service levels and the National Consumer Commission should leave these companies alone when it comes to how they sell television and run their businesses. The unneccesary tampering is not serving consumers.
A gym subscription gives you access to a set of equipment and exercises whether you use it or not - whether you use a piece of equipment daily, once a month, once a year, or never. Would the National Consumer Commission order gyms who sells gym subscriptions to suddenly ''break up'' and ''unbundle'' their equipment and make subscribers pay per use of individual piece of exercise equipment? Or create individual billing for thousands of gym users all using their own matrix of gym services? No. Because it's not practically do-able. But that is what South Africa's pay TV operators are now ordered to do by the daft National Consumer Commission.
In the case of ordering South Africa's pay TV operators to change the way they're selling TV channels, the out of touch National Consumer Commission has made a very big mistake. The Commission has clearly rushed into something that it doesn't understand or bothered to grasp the legio complexities of. The Consumer Commission will break South Africa's pay television business if it insists on so-called channel ''unbundling''.
The right thing to do for the National Consumer Commission would be to step back, back-off and to leave pay TV operators to free market forces under the regulation of the Independent Communications Authority of South Africa (Icasa) - the regulator which they already fall under, and which has a prescribed code for pay television and strict licensing regulations governing the sector.
The Commission needs to stop intefering in issues – worsened by having not done any homework – that is actually going to cost the South African consumer and pay TV subscriber more in the long run.
How will it be better for the consumer and TV viewer in South Africa if overseas investors, channel suppliers and distributors become scared or no longer want to bring their product here because our pay TV model is forced by silly rules to operate differently than the rest of the world?
How will it be better for the consumer if there is less choice because less popular, separate TV channels serving a niche but loyal audience are simply not available? That is what will happen because pay TV operators will refuse to carry them because of a lack of enough subscribers to make it viable (ironically it's the news and education channels that will get culled first)? The price of the remaining channels (from what will be a limited choice ) will incrementally be much more, making pay television in South Africa truly the preserve of the super rich. Is that what we want?
Like outcome-based education that miserably failed but was touted as being better without full awareness of all the facts although the facts existed, once again someone, uninformed as to the real facts and the real implications, are forcing a system in South Africa to change that already works the best it can. And that change is not going to be for the better of the average consumer.
on 4:57:00 PM