If South Africa's broadcasting
regulator impose limits on the quantity of exclusive content or on the duration
of these contracts that a TV channel or pay-TV operator can secure these for,
it will mean that viewers will be the ones losing out when one channel or
operator is prevented from bidding when rivals don’t have the money, interest
or willingness to secure these rights.
South Africa's broadcasting regulator, the
Independent Communications Authority of South Africa (Icasa) is once again
conducting an inquiry into South Africa’s pay-TV sector and is looking at, and
will consider, on how to possibly amend regulations.
Some of the suggestions put forth by Icasa in
a discussion document, have been to impose some form of artificial limits on
especially pay-TV operators – for instance MultiChoice running the DStv
satellite pay-TV service and the pay-TV broadcaster M-Net that are both part of
the Naspers stable – as well as operators like StarTimes Media SA and On
Digital Media running StarSat.
These suggestions include possibly limiting
the quantity of exclusive premium entertainment and sports content that might
be acquired, as well as possibly limiting the broadcast licensing period.
This could be for instance preventing one pay-TV operator from bidding and acquiring the rights to more than one season of the English Premier League (EPL), or from signing more than one Hollywood studio output deal for TV series like HBO for instance, or for how long such an output deal might be.
This could be for instance preventing one pay-TV operator from bidding and acquiring the rights to more than one season of the English Premier League (EPL), or from signing more than one Hollywood studio output deal for TV series like HBO for instance, or for how long such an output deal might be.
Imposed limits when it comes to content
exclusivity, especially around sports rights, were introduced by the British
broadcasting regulator, Ofcom, a few years back in the United Kingdom but
failed to have the desired effect.
Also worth keeping in mind is that limiting a
specific TV channel, lets say M-Net, or a pay-TV operator from acquiring
certain content exclusively, doesn’t mean that that content will become
available to South African and African viewers on for instance StarSat, the
SABC or e.tv.
International content rights for both general
entertainment as well as sports still comes with a specific price tag. If a
broadcaster isn't allowed to acquire it, it doesn't mean that a rival will have
the budget and money, the interest or the scheduling capacity to pick it up –
or the content might not be suited or aligned to that broadcaster’s audience
and viewership demographic.
If M-Net is for instance prevented from
acquiring the fantasy drama series Game of Thrones from HBO because it already
has Billions from Showtime, there’s no guarantee that another pay-TV channel
will have the money, international distributor relationship or willingness to
cough up what the rights costs to show the drama series.
‘Exclusivity the lifeblood of
pay-broadcasters’
TVwithThinus asked Brandon Foot, group general
counsel for MultiChoice, about exclusivity rights, especially as it pertains to
sports content licensing, and why it matters.
"Simply put, sports federations, their
principle source of revenue is from their broadcast rights – between 50% and
70% of their income is from the licensing of broadcast rights. On the other
side, what the public doesn’t sometimes understand, is why would you pay us for
the box and then on a monthly basis, when you can watch everything single
English Premier League game played for free on the SABC?"
"So, as a result of that, we have to differentiate ourselves, and exclusivity, in sport in particular, and also in general entertainment, has been accepted around the world by all regulators as being the lifeblood of pay-broadcasters,” said Brandon Foot.
"If you limit as far as sports rights are concerned, firstly you're going to kill us because that's how we differentiate ourselves. But more importantly, ultimately you'll ultimately kill the sports federations."
"The two federations that already made presentations at Icasa inquiry – The South African Rugby Union (Saru) and the Premier Soccer League (PSL) – made it very, very clear that they are best placed to decide what to do with their rights and that they self-regulate and that should there be anything else imposed or restrictions put on them, it would kill them and take them back to the Dark Ages," said Brandon Foot.
"So from a sports perspective it's absolutely crucial to have an element of exclusivity. The sports federations themselves realise that there has to be by the same token, wide distribution, and so a portion of their content needs to be on free-to-air (FTA), but sports federations are best placed to the call at any particular point in time as to what the blend should be between pay-TV exclusivity and FTA distribution."
"So, as a result of that, we have to differentiate ourselves, and exclusivity, in sport in particular, and also in general entertainment, has been accepted around the world by all regulators as being the lifeblood of pay-broadcasters,” said Brandon Foot.
"If you limit as far as sports rights are concerned, firstly you're going to kill us because that's how we differentiate ourselves. But more importantly, ultimately you'll ultimately kill the sports federations."
"The two federations that already made presentations at Icasa inquiry – The South African Rugby Union (Saru) and the Premier Soccer League (PSL) – made it very, very clear that they are best placed to decide what to do with their rights and that they self-regulate and that should there be anything else imposed or restrictions put on them, it would kill them and take them back to the Dark Ages," said Brandon Foot.
"So from a sports perspective it's absolutely crucial to have an element of exclusivity. The sports federations themselves realise that there has to be by the same token, wide distribution, and so a portion of their content needs to be on free-to-air (FTA), but sports federations are best placed to the call at any particular point in time as to what the blend should be between pay-TV exclusivity and FTA distribution."
‘Sports rights important’
TVwithThinus also asked Brandon Foot whether
live sports viewing is as important in South Africa and Africa as it is in
America, where live sports broadcasting, as well as so-called "event television" – for instance the season finale of a reality singing competition show – have
continued to keep viewers tuning in while linear TV ratings for other
programming have shown sharp declines the past half a decade.
"From a sports perspective we understand that
sport is important, there's no question about that. But what we have found is
that it is not must-have, if you compare it to some of the other general
entertainment. For example some of the soaps rate far more highly than sport
does."
"But we see it as part of a genre that a household would like to watch. The big thing about sports – I think of my household for example – I love to watch certain matches per week when my specific teams are playing and for me that's important. But generally speaking the rest of the family will focus on general entertainment, soaps, news and kids channels," said Brandon Foot.
"What we also see though is that a lot of the over-the-top (OTT) players [streaming services] are having a very close look and are in fact, they've already gone further and are buying sports rights. And a lot of those sports rights holders are now making sports content available directly to people's home without even the need of a third-party to broadcast it as such, like Formula One, NBA and NFL."
