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Greed grounds ABN, TV Africa

Webs unplugged by ad loss as locals stuff pockets

JOHANNESBURG — The recent insolvencies of the African Broadcasting Network and rival TV Africa have sounded the death knell for a brave dream to transform the broadcasting landscape on the continent.

Control of ABN was handed over to insolvency administrator Kallis & Co. by a U.K. court in December, while Africa Media Group — backed by the ZM Africa Investment Fund, AIG Africa Infrastructure Fund and the Intl. Finance Corp., the private sector arm of the World Bank — pulled the plug on debt-ridden TV Africa in October.

Both started just a few years earlier: TV Africa launched in mid-2000 while British entrepreneur James Pockney and African media consultant George Twumasi bowed ABN in January 2001.

The pioneering pan-African networks used a barter distribution system. Essentially, they distributed programming via satellite from their bases in Johannesburg to terrestrial channels across Africa in exchange for commercial airtime.

Local broadcasters got quality programming, which they would otherwise not be able to afford, while the networks gained good-looking viewing figures, which they used to attract more advertisers.

Both networks believed they could use the “made for Africa” system to contribute to the development of the continent by providing top-class entertainment and educational shows to viewers tired of the limited fare.

A win-win system for all, as TV Africa chairman David Kelly once described the system.

So why did it turn into lose-lose?

Initially, both TV Africa and ABN grew rapidly across sub-Saharan Africa, quickly signing up broadcast partners and drawing advertisers excited at the prospect of a pan-African reach.

TV Africa staked its claim as a major player by winning the terrestrial rights for sub-Saharan Africa, excluding South Africa, for the 2002 Soccer World Cup, extending its presence to 45 partners in 30 countries.

But by mid-2003 the wheels started coming off. Too-rapid expansion, lack of controls on the ground and insufficient funds for infrastructure investments have all been blamed, but ultimately both channels were sabotaged by corruption and greed.

ABN and TV Africa’s pre-sold ad spots were illegally dumped and filled with advertising sold by the local broadcasters for their own coffers. Major advertisers pulled out as screenings of their ads could not be guaranteed, and thus the networks lost their major source of income.

The tragedy, say analysts, is that potential investors will be even more wary now of the African industry, ensuring that its growth remains limited.

“The only clear signal received from the collapse of the networks is that investors should not put their money into Africa, that it is as corrupt as everyone has always said it is,” says one disappointed former TV Africa boss.

But ABN is not quite ready to throw in the towel. The administrators hope something can be salvaged from the wreckage of “a good idea” and that they will try to manage it as a going concern.

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