It’s about choice
Media experts cautious about Top TV’s chances
IF IT DOES NOTHING else, the launch of the subscriber television service Top TV should restore the public’s faith in free enterprise. The introduction of competition into the pay-TV market has sparked an immediate price war – unlike the cellphone business, which became a cosy little high-price cartel that absorbed or destroyed new entrants.
Top TV launched with a highly affordable subscription of only R99/month – a third of the cost of DStv’s cheapest package. Ironically, though, Top TV says it’s positioning itself not on a price platform but on one of choice. “Our competition isn’t MultiChoice/DStv,” says Eric D’Oliveira, MD of Top TV’s agency, Net#work BBDO Cape Town. “We’re targeting people who don’t have access to pay-TV.”
It’s a hitherto untapped market of less affluent viewers than the typical DStv profile. However, DStv doesn’t seem to believe that and immediately launched a new, low-cost package of its own called DStv Lite.
“This shows the benefits of competition,” exults Net#work group creative chief Mike Schalit. “DStv has been printing money. We said we’d give you the cheaper offering. Now we’re giving it to our competitors as well.”
But one other outcome is necessary for the public’s belief in free enterprise to be truly vindicated: Top TV must succeed. Failure isn’t a good advertisement for the open marketplace. Can it do it?
“It depends how deep their pockets are,” says Nota Bene group MD Ryan Williams, expressing a widely held view. “If they have the financial backing to weather the first two years, they’ve got a chance. Top TV won’t have access to the latest content but its price point is compelling. It needs first to attract subscribers, so they’ve got something to sell. Advertising will come later. Content is also vital. It won’t be an easy ride.”
Will it survive? “It’s very difficult to say,” says Williams. “We have just come out of a recession. We have the Soccer World Cup for the next two months. August-September will be a mini recession. The timing isn’t ideal.”
Funding isn’t giving D’Oliveira sleepless nights. “The service has R1bn behind it. That’s enough to buy the best content. New movies will be available six to eight months after DStv gets them, but ahead of other broadcasters. We have more movie channels than they have. We’ll have sport, including the World Cup, through SABC and e.tv channels.”
D’Oliveira says the potential market comprises 5m people, half of whom don’t currently subscribe to pay-TV. “We think we can sign up 200 000 subscribers in two years. During an economic downturn, people stay home more.”
The marketing budget has been put at R120m, but little has been seen so far apart from some teaser ads. “We’ve got to show them the product first,” says Schalit. “We have to get it into clubs and bars so people can sample it. Then we do the sell. We’re a business partner in this. That’s where advertising has value. Our best work has always been when we sit at the main table. You deal with the man with the vision.”
But leading media agency The MediaShop is sceptical. In a newsletter it finds a breakeven target of 300 000 subscribers in five years a tall order. “DStv has long tried – and only recently managed – to attract those in the lower LSM groups with cheaper bouquets and content offerings.”
Starcom MediaVest CEO Gordon Patterson says he’s delighted with the extra competition but disappointed in the marketing so far. “They haven’t engaged with the ad industry. They haven’t told us about their programming. I wish them the best, but conditions are much worse than expected a few months ago. It now appears there will be fewer visitors during the World Cup than there normally are at this time of year. They need a lot of capital to survive and I’m not sure they can fund their business on subscribers alone.”
MIKE SCHALIT Benefits of competition