A million decoders: The South African public broadcaster wants to start a SABC satellite TV service.

Thinus Ferreira

The South African public broadcaster which has no money to pay for the project itself, is looking for a company to manufacture a million decoders and start a SABC satellite TV service for it for free.

The technically insolvent SABC - struggling with falling TV ratings and declining viewership through audience erosion due to rival streaming and satellite TV - now wants to start its own SABC satellite TV service, or direct-to-home (DTH) service.

The SABC is looking for a company to bear 100% of the cost to set up its SABC satellite TV service, manufacture and distribute set-top boxes (STB), and to create and run a call centre for five years.

As part of the extremely ambitious requirements, the SABC wants 100 000 decoders of what is supposed to be a million eventually, pushed to market by the end of the year when the last of its analogue TV signals are switched off.

The SABC is envious of eMedia's Openview satellite TV service which has surpassed 3.42 million activated decoders by the end of March this year since e.tv launched Openview a decade ago in October 2013.

Openview helped to buffer e.tv against TV ratings erosion, gave e.tv another entry point into homes, allowed eMedia to launch its own multi-TV-channel offering and start a subscription bouquet as an additional revenue stream. 

The SABC wants its own 4K-resolution enabled STBs to carry its own existing collection of SABC TV channels, as well as its 19 SABC radio channels.

From SABC DTT to satellite TV

According to the public broadcaster, South Africa's severely botched, almost two decades-delayed process of switching from analogue broadcasting to digital terrestrial television (DTT) has severely damaged its once-entrenched market position.

SABC audience sizes keep diminishing which negatively impacts its advertising income as more and more SABC viewers are cut off and switch to other broadcasters when they can no longer get SABC signals.

eMedia has already said that South Africa's TV switchover from analogue to DTT technology is outdated, damaging the country's TV and broadcasting industry, and consumers have leapfrogged past it.

The SABC dabbled in its first satellite TV service almost thirty years ago when it launched its own AstraSat in 1996 a year after MultiChoice started DStv in 1995.

The SABC blew millions of rand on starting AstraSat which massively damaged the broadcaster financially when AstraSat launched with a bouquet of the SABC's TV channels and a few others like M-Net which packaged a special SuperSport "lite" channel for AstraSat that the SABC paid for similar to the sport sublicensing deals it does with SuperSport now.

Just a year and a half later in February 1998 the SABC was forced to cut its enormous losses and abruptly shuttered AstraSat to rather concentrate on its existing analogue broadcast network with distribution done by Sentech.

In a tender document, the SABC says it needs its own satellite TV service to combat the "devastating effect of analogue switch-off on viewers on 31 December" and that the creation of its own satellite service will enable the broadcaster to take control of its future broadcast destiny and to "position the SABC as a content aggregator, to add additional TV channels to the existing bouquet and to consolidate audiences through a single platform".

The SABC says DTT is severely limiting and doesn't allow it to grow its number of TV channels, nothing that its existing offering of six SABC TV channels are an extremely weak value offering since rivals easily offer 10 or more channels.

The SABC notes that the delays in rolling out DTT have eroded SABC viewership while competitors grew their ratings at the cost of the public broadcaster. 

The SABC says that it is in danger of losing another 1.7 million viewers by 31 December when Sentech cuts the last of its analogue transmissions countrywide.

Sentech already switched off 198 analogue signals from transmission towers across several provinces, cutting off millions of viewers who can no longer get SABC reception through the TV sets they used to receive it.

SABC satellite decoders

Now the SABC wants a satellite TV service again with a partner that will have to shoulder 100% of the operating costs - including establishing and running a call centre and the manufacture and distribution of decoders.

According to a new SABC tender for which applications closed on Monday at noon, the SABC prefers that whichever company takes on the multimillion-rand project, uses the IS20 satellite transponder which MultiChoice, as well as eMedia and Sentech, have already been using for their DStv and Openview satellite TV services.

By using the IS20-transponder, households with an existing satellite dish installation to watch DStv or Openview through those decoders, will be able to simply plug-and-play the SABC's service by connecting the SABC decoder to the existing satellite dish cable.

According to the SABC, the already existing network of installers and agents of DStv, Openview and Startimes SA's StarSat would then also be able to do installations of the SABC's STBs.

The successful bidder will have to carry the cost of satellite transponder uplinking and the full capital expenditure of a "turnkey-solution" for the SABC which will run into millions, "at no cost for the SABC".

Besides the first 100 000 decoders to be manufactured, the SABC eventually wants a million decoders in the market for its satellite TV project, with a 50/50-share between a basic type of decoder and a more luxury, hybrid type STB.

The basic SABC decoder will just work with a normal satellite TV dish mounted outside, while the more expensive hybrid STB - similar to eMedia's latest Openview OV512 decoder - must offer built-in Wi-Fi 802.11 functionality and be able to connect to the internet.

This more expensive SABC decoder will have to offer the broadcaster's SABC+ streaming service and allow viewers to record, download and store content and programmes, similar to MultiChoice's DStv Explora decoders.

By the end of September, the SABC wants to see a manufactured prototype decoder which the successful bidder must "demo" to the broadcaster in a presentation, before mass production starts - preferably somewhere in South Africa according to the SANS-1719 requirements.

The SABC says it projects to have a million users of its own SABC satellite TV service after half a decade.

It's unclear how the SABC expects the successful bidder to make money from the project or recoup its massive investment, although the SABC says it expects the partner to make a "profit-sharing" proposal.

In June the SABC fired its COO and head of video entertainment, while its ad boss resigned, after they were found guilty of deliberately hiding an ad revenue profit-sharing agreement with Discover Digital which got a contract to run the broadcaster's SABC+ video streaming service.

SABC: Looking for a turnkey solution

The SABC confirmed to me that the broadcaster wants its own satellite TV service, done for the SABC as a complete turnkey solution.

"The SABC can confirm that the organisation is in pursuit of the development and implementation of a free-to-air (FTA) direct-to-home (DTH) solution as an additional platform strategy," Mmoni Seapolelo, SABC spokesperson said in response to questions.

"It must be noted that this is the implementation of the SABC's long-standing digital transformation strategy which includes building SABC-owned platforms and being present in multi-platforms with capabilities for multi-channels, as well as futureproofing the organisation."

She says "Like any other strategy journey, there are priorities as well as milestones and as such, the SABC has recently successfully implemented the OTT platform, SABC+. The next step is the implementation of the DTH platform."

"In terms of DTT, the SABC is already on the DTT platform. Therefore, the introduction of a DTH solution is another strategy in line with the SABC's mandate to provide universal access."

"The SABC is looking for a partner to collaborate with, in providing this solution. The SABC will provide content and the partner will provide other elements as covered in the turnkey solution".

An industry expert told me that a SABC satellite TV service "is a good idea which should have happened years ago since the SABC could have had a satellite TV service of its own now, with the market penetration and audience that Openview and e.tv currently have".

"It's a big risk however for whoever takes on this massive project - and for free. Perhaps the SABC should ask Elon Musk to do it - he has the satellites and he's got billions he can lose."

SABC warns: Will collapse if forced to pay billions in signal distribution costs to Sentech, says investing in old digital terrestrial broadcasting is 'throwing money into the wind', must abandon DTT to survive.

by Thinus Ferreira

South Africa's bloated and financially struggling public broadcaster on Tuesday told the country's parliament that it can no longer afford the prohibitive billions of rand in radio and TV signal distribution costs that the SABC is paying the parastatal Sentech, and that the SABC needs to abandon and move away from outdated digital terrestrial television (DTT) as soon as possible if it is to survive.

The SABC told parliament that if the broadcaster is forced to keep exorbitant signal distribution costs to Sentech that the SABC will collapse. It also said DTT is outdated technology and that the SABC needs to dump it as soon as possible if the broadcaster is to survive. 

The SABC told parliament that DTT) is outdated for South Africa and that investing any further money into it would be "throwing money into the wind". 

South Africa's long-delayed, chaotic and corruption-filled digital migration process has been fraught with problems, little progress and hundreds of millions of rands wasted. 

The SABC told parliament's portfolio committee on communications on Tuesday morning that its signal distribution costs paid to Sentech are the South African public broadcaster's second-largest expense after its massive salaries and wage bill.

"Over the past 5 years we've spent over R3.2 billion on paying Sentech, and if you continue like this, the SABC will not be sustainable," Ian Plaatjes, the SABC chief operations officer (COO) told parliament.

"If we digitise 100% and look over the next 5 years, we will be spending R3.5 billion on signal distribution to Sentech," he said.

"If we were to use private, third-party signal distribution suppliers outside of Sentech, we would actually be making a 94% saving. That is a huge amount to our bottom-line. That is about R400 million that we could utilise for content."

'We do not have a strategy to use third-party providers outside of Sentech as of yet," he said "but the price has to be right. It can’t be 100 times the price our competitors are paying out there." 

Ian Plaatjes explained how it costs the SABC much more per capita to get its radio and TV signals to rural and remote areas through using Sentech and how it makes no sense since the SABC has to pay much more to reach a SABC listener or viewer than what they pay in a SABC TV Licence fee.

"In Makhanda, compared to Johannesburg - if you look at the cost we pay to Sentech, and this is just analogue signal distribution, it's R9 million. If you look at Johannesburg it's R10 million."

"If you look at the cost per user - because there's only 27 000, the cost per viewer is R335, whereas in Johannesburg because the viewers are 7.8 million, the cost per viewer comes down to R1.30."

"Digital terrestrial television (DTT) for Makhanda if the SABC were to roll it out there would be R150 per viewer, whereas if we were to use a satellite direct-to-home (DTH) solution, it would come down to R1.60 per viewer. It's a no-brainer about which technology we would then choose."

"If we look at Johannesburg, and other metropolitan areas, the analogue is R1.30 but if we were to use a DTT solution, it comes down to only 70c per viewer. Logic tells you that for metropolitan areas we would use a DTT solution. So by no means are we saying that we must throw DTT out."

"When DTT was planned 15 years ago, it was the best technology at that point in time. But to throw any money at it now, would be throwing money into the wind," Ian Plaatjes says.

"The whole world is moving off of DTT and has a strategy for moving off DTT. The SABC certainly must do the same if we are to survive." 

"If we were to use a third-party signal distributor service provide outside of Sentech, it would be R80c per viewer."

"Fifteen years after we started deploying DTT we have not utilised that time very well and we have not rolled out the supporting set-top boxes that goes with the technology."

"There isn't one township that you will find in the area at one dwelling more than one satellite TV dish. That means that the argument of using DTT in high-density areas is no longer valid. When it comes to DTH there is 100% coverage in South Africa."

"What needs to happen in regards to the cost we'repaying to Sentech which is close to R1 billion per year has to be halved for the sustainability of the SABC," Ian Plaatjes says.

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