The struggling pay-TV operator which is just over two years into its commercial operations since May 2010 has entered "business rescue" similar to 1time airline which has now entered into liquidation.
TopTV indicated last week that in six months' time - which would make it May 2013 - parent company On Digital Media (ODM) might actually no longer be able to meet the payment obligations due. TopTV is therefore looking for a South African equity partner who can funnel cash into the operation to keep it going and to help it meet its financial obligations.
Besides who a suitable equity partner for TopTV would be, there is an even more vexing question. The one of why. Why would someone invest millions in a pay-TV player - a sector in which initial returns on investments are very low, in which the capital expenditure is extremely high and in which the running costs due to constant broadcasting and licensing rights fees are massive in order to maintain a minimum standard of broadcasting operations?
Is investing in South Africa's second pay-TV operation not just an attractive opportunity, but a wise one? Is there an appetite to want to bite into a chunk of the TopTV apple?
ODM;s current equity partners include the National Empowerment Fund, SES, the Industrial Development Corporation (IDC) and the Development Bank of South Africa. They've already poured massive millions into the pay-TV operation. But more is needed.
So, who could these possible equity partners be? Who would invest money into ODM and its TopTV service? The most likely choices would be current broadcasters or media conglomerates who wants a foothold in pay television in South Africa, telecoms with similar aspirations, or cash flush capital investment firms who believe that TopTV can do more and be more than the neverending repeats the past two years of Relic Hunter on the Top Crime channel.
MultiChoice can't and won't - the continenal pay-TV platform already operates its DStv service successfully. M-Net as its sister won't either. The SABC can't - it's the public broadcaster. Which leaves e.tv. Might e.tv which has its e.Sat pay-TV license be interested in pumping millions into TopTV? Not very likely. Would Avusa, which has bigger pay-TV aspirations than merely being a TV content provider of TV channels, consider TopTV a new entry-point?
Which brings us to the telecoms. MTN is too small and has too many troubles. Telkom has even more executive management tumult and massive problems of its own. It won't either. And Telkom will also be mindful of the unmitigated disaster of its Telkom Media pay-TV venture which morphed into Super 5 Media and never managed to launch a pay-TV service despite gazillions invested and completely wasted. Cell C is just too small. Vodacom might - it would give the cell giant a foothold and share into the pay-TV market. But the hurdles and the cost (and not just in a monetary sense) might be simply too high.
Are their investment firms flush with cash who could be interested? There definitely are. Would they want to invest? Who knows. They would want a return or some likelihood of guarantees on their investments, and one cannot help but wonder what kind of guarantee(s) TopTV would or could provide at this stage of the game.
TopTV needs money. And lots of it. That's currently the bottom-line. An influx of expertise in broadcasting would also help. Would-be investors might be reluctant to dip into pay-TV pool but would also be in a position where they have more power than what is usual to possibly dictate (better than usual) terms.
The pay-TV broadcaster M-Net is currently holding nationwide auditions for a new South African version of the TV game show, Million Rand Money Drop. Since it's the season, there may just be one or two daredevils out there who might contemplate dropping a few of their millions into TopTV.
