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TopTV to 'rattle' DStv with Chinese investor

2013-04-18 14:03
TopTV DStv
Cape Town – StarTimes, a Chinese media group ready to bail out the struggling TopTV wants to take on MultiChoice's DStv by slashing pay-TV subscriptions, dramatically improve pay-TV content and "rattle" the South African pay-TV market.

On Digital Media (ODM) which runs the South African satellite pay-TV service TopTV and is looking to stave off liquidation, has published its Business Rescue Plan together with China's StarTimes media group.

StarTimes is planning a massive overhaul of "failed" TopTV if it gets the go-ahead to funnel millions into the beleaguered loss-making operation.

The Business Rescue Plan names StarTimes' interest in acquiring a stake in TopTV as the company's only and last chance to stave off liquidation. South African broadcasting regulations currently cap foreign ownership on licensed broadcasting entities at 20%.

StarTimes says in the TopTV Business Rescue Plan that it wants to "rattle" the pay-TV market "which is currently covered by two other digital television providers in Africa (one other in South Africa) – referring to MultiChoice.

Quality pay-TV programming at half the current cost

StarTimes say it wants to offer "pay-TV services at half their current costs and let ordinary South Africans pay less for good quality digital television".

Star Times wants to help make TopTV a "strong competitor in the pay-television environment currently monopolised by one player," says TopTV's Business Rescue Plan.

The financially distressed ODM is now hoping that China's StarTimes media group will be able to become the new equity partner the Woodmead company desperate needs for a major capital injection.

StarTimes plans to "implement a complete restructuring of TopTV's affairs and business and debt" if it gets the go-ahead to bail out TopTV and and wants to install its own CEO, and a CEO who have been a previous employee of StarTimes.

The Business Rescue Plan warns that job losses may occur and states that should StarTimes not be given the go-ahead, that "a liquidation of the company will be inevitable".

Tremendous potential to develop pay-TV in SA

StarTimes says its aim is to "give every South African family the opportunity to own digital television" and already run pay-TV packages with bouquets of up to 140 TV channels elsewhere on the African continent.

StarTimes group president ZinXing Ping says StarTimes has the aim of becoming "Africa's most influential digital TV operator".

"There are about 11 million households in South Africa with TV sets. About 4 million are subscribers to pay-TV. There exists a tremendous potential to develop the pay-TV base in South Africa".

StarTimes which already has over 7 million pay-TV subscribers in China already operates pay-TV services in 13 African countries with 23 000 employees and 2.3 million African pay-TV subscribers across the continent.

China's StarTimes is operational in African countries such as Nigeria (where it passed 1 million subscribers last year), Tanzania, Kenya, Rwanda, Uganda, Guinea, the Central African Republic (CAR) and Burundi and already has registered local companies in 16 African countries and is willing to inject new capital into TopTV.

A possible deal will give China and StarTimes a crucial foothold in South Africa's pay-TV market – the most advanced on the African continent which is dominated by MultiChoice's DStv service.

TopTV's 'goodwill' eroded

StarTimes says that as a digital technology provider it already owns a number of digital television invention patents and software copyrights. StarTimes has set-top box (STB) decoders which support standard definition (SD) and high definition (HD) television.

StarTimes says "the lack of scale and experience of management resulted in low quality and highly priced programmes" at TopTV.

"TopTV does not have any differentiation or competitive advantage," says StarTimes. "DStv is a very strong and powerful pay-TV operator in the South African - and even in the Pan-African - market.

"Compared with DStv, TopTV does not have an innovative business model or differentiated products and services and has no cost advantage due to its small size in the market."

StarTimes says that TopTV's "goodwill" in the market place has been eroded, but that StarTimes' "highly respected and influence and reputation" can help to restore TopTV's credibility and restore its operations.

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