Paybox forced to close its window

Dispatch

JOHANNESBURG — Free-to-air commercial broadcasters have welcomed regulator Icasa’s decision last week to close paybox M-Net’s daily two-hour free-to-air window — but M-Net says the move would cost $9 million a year in lost advertising revenue, which could force it to cancel its popular local soap “Egoli.”

The Independent Communications Authority of South Africa ruled M-Net’s open-time window, during which nonsubscribers can receive its programming, must be shut from April 1, 2007, to level the broadcasting playing field ahead of the entry of new players to the pay TV market.

Outgoing Icasa chairman Mandla Langa says the ruling — made after more than a year of representations from M-Net and its rivals — would differentiate between subscription commercial broadcasters and free-to-air commercial services.

The open-time window was granted to M-Net, South Africa’s first paybox, at its launch in 1988 to help it market a new concept to the South African public.

The pay channel now derives around 40% of its ad revenue from this 5-7 p.m. slot, where it runs its most popular shows, including “Egoli,” “Big Brother” and “Idols.”

Free-to-air broadcasters, particularly independent e.tv, have objected for several years, arguing M-Net should not be able to draw free-to-air ad revenue as well as subscription fees.

M-Net CEO Glen Marques says the paybox will not fight the ruling, but will find ways to deal with the consequences. “You don’t advance competition by removing a competitor,” he adds.

However, Langa says Icasa believes many advertisers will continue to advertise on M-Net because of the high spending power of its subscribers.

Local producers also are unlikely to be adversely affected, Icasa believes, since M-Net would be under commercial pressure to continue to air popular programs to attract subscribers.

Icasa will invite applications for new subscription licenses later this year. At present, Multichoice is the only subscription service provider in the country, managing both the M-Net analog terrestrial service and the DSTV satellite service.

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