TopTV's mistakes laid bare

2013-04-19 11:24
Cape Town – China's StarTimes media group, which is looking to potentially bail out the beleaguered TopTV in South Africa, gives a brutal assessment of the myriad mistakes TopTV made in TopTV's new Business Rescue Plan.

StarTimes has harsh words for the TopTV management, saying it "implemented an unrealistic operation strategy and business development plan" and that while the "overall management incurred high remuneration, purchasing and operation cost", the pay-TV service suffered due to a lack of "previous experience in, and a deep understanding of, the pay-TV industry and a general lack of business management experience".

StarTimes says it has identified "operational deficiencies" in TopTV which includes "low quality programming, high costs, inappropriate packaging and a high churn rate".

It also says TopTV has a small subscriber base which impacts content cost, purchase cost, subscriber development cost and market competitiveness.

Low quality programmes

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

StarTimes says TopTV "failed to observe that television is an entertaining terminal enjoyed by the whole family" in terms of how it designed packages, and that this led to TopTV's "active user rate being extremely low" while its subscriber base stagnated.

"The subscriber either has to buy all the packages (in which case TopTV does not have any advantage over DStv in terms of price), or buy the basic package which offers limited programming.

"Because the other packages cannot be sold alone, TopTV subscribers can either not afford the whole bouquet or they feel the programmes on the limited, low-cost package is not an attractive option."

TopTV entered business rescue to stave off liquidation at the end of October 2012 after it was declared technically insolvent in June 2012.

StarTimes is willing to invest in TopTV but proposes a radical overhaul should a deal materialise.

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

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