Something Koos Bekker, the CEO of Naspers and Eben Greyling, the CEO of pay TV platforms at Naspers in South Africa will probably definitely agree with, is the keynote address of Time Warner chairman and CEO Jeff Bewkes yesterday in New York saying that the increase in sports rights costs are the main problem causing financial pressure on pay-TV operators.
Speaking at the 40th annual UBS Global Media and Communications Conference in New York, Jeff Bewkes said that its simply not in the pay-TV subscriber and consumer's interest for TV channels to be sold separately by pay-TV providers.
"I don't think it's desirable for consumers to break the bundle," he said, noting that it will end up costing subscribers to subscription television more if they pay for individual TV channels.
The graph below is for instance MultiChoice's programming costs. It's almost doubled over the course of the past 4 years to just over R6 billion. Programming costs on the costs associated with acquiring TV content such as series and movies and first-run window for territories - and yes - sports rights to major sporting events.
For MultiChoice programming costs have increase on average 16% per year for the last 4 years. Of course sports rights are a big chunk of that, which is what Jeff Bewkes is talking about. Might MultiChoice reach a point in the not-too-far-off or further future where it won't be willing to pay for certain specific sports rights anymore because its priced out due to a too steep escalation in broadcasting rights prices? Who knows.
The graph below is for instance MultiChoice's programming costs. It's almost doubled over the course of the past 4 years to just over R6 billion. Programming costs on the costs associated with acquiring TV content such as series and movies and first-run window for territories - and yes - sports rights to major sporting events.
For MultiChoice programming costs have increase on average 16% per year for the last 4 years. Of course sports rights are a big chunk of that, which is what Jeff Bewkes is talking about. Might MultiChoice reach a point in the not-too-far-off or further future where it won't be willing to pay for certain specific sports rights anymore because its priced out due to a too steep escalation in broadcasting rights prices? Who knows.
"The escalation of sports rights, I don't know what will happen with that. That may be an issue," said Jeff Bewkes talking about Time Warner and his view about the American pay-TV market. "Other than the concentrated viewing and cost of sports, the rest of the bundle is a better value than ever."
