Post on 31-Mar-2015
e.tv in the South African regulatory context
Policy Objectives
Broadcasting policy – 1994 to date
• Establishment of IBA in 1994
• Triple Inquiry Report:– Community radio– Ownership and control of broadcast media– Public broadcasting: integrity & viability
• Recommendations to Parliament
BronwynK:
Refer page 3 and 4 of submission
BronwynK:
Refer page 3 and 4 of submission
Regulatory imperatives
• Focus on radio (community empowerment)– Licensing temporary community radio stations
• Community of interest
• Geographically-defined communities
– Privatising SABC regional radio services– Issuing new commercial radio licences
• Introduction of licence conditions for M-Net and Open Window
• Signal distribution licences
Private television
• Feasibility study into introduction of private commercial television– Based on assessment of TV market– SABC as public broadcaster but relying heavily
on ad revenue
• Public hearings into television policy
Position Paper on Introduction of First Private Free-to-Air TV Channel
• Policy took account of:– Availability of adspend– Competitive environment– Viability of SABC – 3 x PBS channels– Frequency availability– Minimum conditions for licence applicants– Conditions applying to 3 SABC services– Provision for Promise of Performance
BronwynK:
Refer pages 6 to 8 of submission
BronwynK:
Refer pages 6 to 8 of submission
TV licence hearings - 1997
• e.tv preferred applicant owing to:– Black empowerment shareholding – trade
unions– Promise of performance on programming– Promise of performance on staff quotas and
training– Proposals concerning news
Broadcasting Act 1999• White Paper on Broadcasting Policy 1998
– Initiated by government– Regulatory objectives for SA broadcasting
system – Structure & functions of public broadcasting
system
• Broadcasting Act – Division of SABC into PBS and CBS– Public service objectives of SABC
• Local content regs consequently amended
BronwynK:
Refer P10 of submission
BronwynK:
Refer P10 of submission
e.tv: Summary of Licence
e.tv’s Promise of Performance
• 45% local content in performance period• 4 hours prime time drama per week• 16 hours children’s programming per week
– 20% local– 20% languages
• 19 hours information programming per week (2 in prime time)
• Minimum weekly language obligations
e.tv’s Promise of Performance
• 40% African staff• 35% female staff• 5% disabled staff• Management majority historically disadvantaged• Training commitment – 11% of salary bill• All local programming other than news & current
affairs commissioned from independent sector• Licence compliance measured on annual basis
e.tv’s Promise of Performance
• Promise of Performance made in context of policy statements on SABC in Triple Inquiry, Position Paper, Broadcasting Act, local content regulations
• Local content requirement of SABC at the time was 50% - all three channels
• Commercialisation of one channel not envisaged
e.tv: Business Overview
e.tv timeline
• Six-hour service launched in October 1998• News service launched in January 1999• 24-hour service launched in February 1999• Management shake-up: June 1999• Rand crash: December 2001• Additional investment requiring licence
amendment: 2001/2002• e.tv becomes 2nd largest channel in SA: 2002• Break-even: March 2004
Cost of Broadcasting
• Set-up, infrastructure & technology
• Signal distribution
• Local programming (R per minute)
• News
• International programming ($ per hour)
• Staff
• Operational
e.tv Investment
• Projected: R500m over three years
• Actual: R1.5bn over five years (requiring new shareholder investment)
• 1st profit of R30m at end of fifth year
• Profit potential limited by unfair competitive broadcasting environment
Principles governing commercial broadcasting
Advertising
Audiences Programming
Principles governing commercial broadcasting
• Commercial TV is a business – overriding objective is to make a profit
• Primary purpose is to raise advertising by drawing audiences attractive to advertisers
• To attract audiences, the broadcaster must offer them programming which interests them
• Tension between regulation and commercial imperative of commercial media
Most popular programming
e.tv• Wrestling• Movies• Local (Backstage)
General• Local• Movies
Regulation for a competitive environment
Revenue sources
• e.tv:- Advertising (limited to 12 mins per hour)
• SABC:- Advertising (no limits)- Licence fees- State funding
• M-Net– Advertising (open window: added benefit)– Subscription fees
Why regulate commercial media?
• Public service philosophy:– TV frequencies are a scarce resource and must
therefore be allocated to ensure diversity and public benefit
– May change with new technology
• Competitive market philosophy– Ensure a vibrant media market by placing
restrictions on media to allow plurality and diversity (e.g. radio licence formats)
Why regulate public media?
• PBS is funded by public money & advertising• In other parts of the world, PBS is not regulated
by independent regulator – governed by publicly appointed board (same as SABC) accountable to Parliament
• What is the difference in SA?• Why must the SABC be regulated by the
independent regulator?
Current regulatory issues
SABC amendment application
• SABC presently has no specific licence conditions
• Broadcasting Act requires SABC to apply for amendment to its licence to reflect:– Reorganisation– To impose appropriate licence conditions
SABC amendment application
• SABC legal argument:– Provisions of Broadcasting Act are sufficient
licence conditions– Imposition of specific licence conditions entails
infringement of freedom of expression– SABC accountability is to Parliament through
publicly appointed board – SABC itself must determine licence conditions
through policies & ICASA must monitor compliance with these policies
SABC amendment application
• SABC market argument:– Provision of public service programming is
expensive – therefore important to maximise ad revenue
– SABC serves a greater lower-income audience unattractive to advertisers
– e.tv has eroded SABC’s audience and market share
– Continued growth by e.tv will have devastating effect on SABC
– Therefore light-touch regulation should apply
e.tv submission (legal)
• Broadcasting Act sets out general statements of principle – not licence conditions
• Licence conditions must be measurable and quantifiable to be enforced
• Licence conditions determine quotas and not content – therefore no BoR infringement
• Proper regulation of SABC key to ensuring fair competitive environment in SA (s2 objectives in IBA Act & Broadcasting Act)
• e.tv licence conditions more onerous than SABC• SABC CBS must have same licence as e.tv
e.tv submission (market)
• e.tv growth has stagnated from early 2004 owing to commercialisation of SABC
• e.tv serves a higher low-income market than any SABC channel other than S1 (Nielsen)
• SABC is a virtual monopoly– Three TV channels & 19 radio stations– Cross-promotion– Counter-scheduling (competition in
acquisitions)– Cross-selling (anti-competitive discounting)
e.tv proposals: licence conditions
• P.O.D: – (1) SABC serves public, not audience (prime
time as imp. in PBS TV as commercial TV)– (2) SABC benefits from multiple outlets with
multiple revenue streams
• PBS proposals – specific & measurable public service obligations
in prime time– Limit on no. of advertising minutes per hour
• CBS proposals – same conditions as e.tv
e.tv proposals: licence conditions
• Proper separation of PBS and CBS• No cross-promotion between CBS and PBS• Repeat programmes aired on other channels
not counted towards local quota • Airtime sales of PBS and CBS to be
separated• Programme acquisitions of PBS and CBS to
be separated
Future regulation
• SABC application to be heard in September
• New public regional services to be licensed
• M-Net Open Window to be closed
• Introduction of digital transmission