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No More Telkom Media: What Now??

Written by Tashi from the blog Tashi's TV on 07 Apr 2008
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Telkom's withdrawal from pay satellite TV has to go down as the biggest spoilsport event of the century.

It's no different to a reality contestant who goes onto a show, takes up a contestant place and then two minutes later decides they don't want to do it anymore and pretends to get hurt. Someone else could have had the opportunity and now it's been wasted.

Not only that but the impact on all the other players and organisations who've put so much into the new setup and committed to Telkom through it - suddenly they've all been left at the party without the big buck booze.

It just makes no sense that the reasons for their withdrawal weren't relevant before they decided to be part of TV in the first place.

The latest news that they're looking for new investors to take over from them -  the trouble is - who's rich enough and who's prepared to?

I don't know how stock markets and The Companies Who Run Things work but I imagine that Telkom's withdrawal will have an impact on investor confidence in the pay TV setup as a whole - like potential investors questioning why they've withdrawn.

They've said the business plan is sound and that it's only so that they can focus on telecommunications but is it the real reason? It happened so out of the blue it suggests it suddenly dawned on them that it was too huge a commitment. If so, they've got so much money - how much more money does an organisation realistically need to have to continue the hugeness of where they left off? Does such a place even exist?

Also - there could be other factors that have to do with content - like issues involving availability of shows and purchasing channels etc. Across the channels available in SA there are only a small handful of big US shows that we aren't seeing and that's it.  Is there a problem with getting good shows?

They've been on a big drive for local content but this costs tons more and they need to make a profit.

Was everything too problematic to stay involved?

Perhaps not and Telkom being Telkom decided it's more their style to focus on throttling us by pushing up our phonebills and internet more but all in all things on the new satellite front seem verrry shakey and uncertain.

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14 Comments

funkymunky
06 Apr 2008 23:48

People must remember that they are still investing in Paytv, in fact 5,3 BILLION rand... as opposed to the 7,5 billion... still sh1t loads of mula... Secondly, i am REALLY hoping that the likes of Rupert Murdoch,Virgin or Sky get interested... could you imagine? Those are BIG boys, lots of muscle, lots of money and have world class products around the world.
Dont think its all gloom&doom JUST yet, case of finding new investors... The way i understand it is that things are still carrying on, they are still requesting for shows, and still making their news channel....
well... im hoping things still happen.... cause we ALL know Dstv need some major competition....

Fluffy Head
07 Apr 2008 00:00

Hey Tashi...I'll attempt to answer a couple of your questions. (I'm no guru my self but I'll shed some light on the little that I know.)
I have not really followed the story but from what I understand in business in general I can say teh following.

New Pay TV Channel and how possible it is actually: Untill now with the debates of new companies coming on board in SA the only pay tv company was Multichoice. They had a monotony in our contry which means they make the rules. When all the show sindicators want to bring their shows into SA it could almost be done on mulotichoice terms..cause its either they go with them or they dont show. That can include long-term contracts and all those exclusivity agreements. 
I would have expexted that telkom has done their research in this respect. How many TV shows can they realistically get that are not tied up in multichoice's portfolio already..Frankly that was not done.

Is it real that the reason is to focus on telecommunications.
That is very much possible yes. YOu have to remember that telkom is a parastatal...Partly publiicly traded and owned by the government. That means there is a lot of red tape that they need to go through. They can make a investment proposal and everything will be all well and good. Before they can go ahead with that - it does not matter how much money has been put into it already____if investors (being the company owners in this case do not approve) you wasted time. And one of the reasons could be that they feel that the new venture will take away from the normal business operations...Its all about focusing your energy into one business and mastering that - before you get into all the otherfancy stuff. You must remember that governement has SABC and that is not one of the most profitable operations. It is understandable that they will nbot want anything to do with TV.

How about all the other investors who already bought into the idea and now telkom is abondoning it....Well, I would not worry much about them. Its not the nicest thing ever to happen to an investor but its that old phylosophy of doing your homework before you put your money and confidence into it. But if they did put up a lot of money - they are either seriosly covered legally or they will do everythingin their power to make sure that this thing gets off the ground.

There is also a lot of other things that could make a new business venture go burst and one of those is the compoetition commission. Cause unless you get those guys approval - there is no hope for you. Now like anything in South Africa - there are a lot of rats and mices in there.,,bribery and all sort of strange irregularities...So who knows how far the existing pay station company will go to protect it market. 

Anyway that's the geest of it I think!!!

Eish this is all my opinion, so don't sue please.


Cnglemother
07 Apr 2008 00:44

Eish that's a bummer, was so looking forward to that. I guess its back to square one for me, saving up for that humongous DSTV installation fee, they could have hit us with some fong kongish channels in the beggining then slowly bring in the real sh*t as time went by. Tashi thanks for the update (as we asked you on a previous blog to keep us on the loop) but it aint good news at all that was my only hope of ever owning pay-TV.

Nonny
07 Apr 2008 01:04

Thanks for the update Tashi and interesting view there Fluffy Head!!!!

tizoz
07 Apr 2008 03:22

Oh wow! Oh Wow! Oh Wow!

need I say more! not that am celebrating but hey it took Multichoice -+20 years to get 1.8m subscribers out of +-15 m households and even with a R20 package they are still not getting subscribes by droves. That should tell you something...."SA is not market is not big enough for more than 2 operators" etv bid brigade. 

I bet you ICASA is smacking themselves in the ass for being so stubbon and doing what they did.

edgards
07 Apr 2008 05:47

hey i was one of the guys who was shortlisted for a certain position but anyway its life we need to move on.

Dimago
07 Apr 2008 06:39

Oh my goodness!!!! what about the people they employed, whats gonna happen to them? This is shocking!!!!

Thanks for the info Tash...

Nonny
07 Apr 2008 06:53

@ Dimago, nami i also can't help but sympathize with the guys that were thinking they had landed their dream jobs..........shucks man, life is really a b!tch!!!!!

dorothy777
07 Apr 2008 06:56

Telkom and Etv should have done their home work well before applying for a licence. They have dashed people's hopes and DSTV/Multichoice personnel must be dancing round their offices and popping bottles of champagne. 

What the other operators must do first is to get the laws in this country changed first so that Multichoice does not have exclusive rights to programmes, etc. This is what was done in Nigeria and Multichoice now has credible competitors. There is no way Sky or other reputabkle companies will come and operate here when Multichoice has exclusive rights on programming including the ones they are not showing. This they do to shut competitors out. They simply buy up almost all the good shows whether they transmit them or not. Other competitors should use Nigeria as a case study on how they can operate successfully here.

tizoz
07 Apr 2008 13:11

Dorothy if you were following the proceedings you will know etv did several times tell ICASA that there was no room for more than two operators. clearly when they licenced 5 operators etv stuck to their story and said the competition was not worth it. just my view

Brown Shuga
07 Apr 2008 16:36

@ Tizoz <<just my view>> ETV's view...heheheh eish uyang'chaza nge loyalty chomam...

tizoz
08 Apr 2008 00:06

No Sugs u do know rounda bout this time we are supposed to get increments... so anything for that extra %... lol!

dorothy777
08 Apr 2008 01:13

Tizoz, you may be right but until the laws are changed, even a second operator will make no head way. Why would anyone want to subscibe to a cable operator that does not have CNN, Discovery,etc  in its bouquet simply because Multichoice has exclusive rights. Multichoice goes to the extent of buying programmes they don't even transmit all in a bid to shut out other competitors. This does not happen anywhere in the world where there is freedom of choice. I was in the UK in September last year and I was trully amazed at the no of channels Sky subscibers were able to view and it even comes in a package that includes internet and telephone services as well. The price is right as well. Multichoice is really reaping us off. If the laws are changed, then Sky will really stand up to dstv. I was really looking forward to etv. I thought they were capable of standing up to multichoice but was really disappointed they threw in  the towel.  It appears I am stuck with dstv whether I like it or not as I was looking forward to Telkom when etv caved in.

Cande
09 Apr 2008 23:30

haiyke Telkom


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