Set-top boxes: The 'new e-tolls'

2014-09-21 15:01

‘If the government thought that the e-tolling debacle came back to bite them, this is going to be much, much worse,” warns Dr Julie Reid, media studies senior lecturer at Unisa who is involved with the Right2Know campaign.

She’s referring to the government’s plan?–?revealed to a joint sitting of the portfolio committees on communications and telecommunications on Friday?–?that will call on 12.8?million households to buy a set-top box at a one-off cost of about R750 so they can watch free-to-air TV in a digital format.

“Where e-tolls affect the majority of the middle class, this is something that is going to affect the working class and poorer communities in a big way,” says Reid.

Already, poorer South Africans are being left behind daily. A sudden proliferation of video-on-demand (VOD) TV services like the recently launched Vidi and Altech’s Node is giving consumers a choice of the latest movie releases and older TV shows. DStv has won considerable subscribers in the new market.

A costly exercise

But most South Africans cannot afford to pay for their set-top boxes.

According to this week’s Digital Terrestrial Television (DTT) readiness briefing, 4?million TV households earning less than R1?500 a month must prove that they’re poor in order to get the box for free, and 2?million TV households earning R1?501 to R3?200 will have to prove they qualify to get a 70% subsidy and pay R225.

The rest of the 6.14?million TV households will have to pay full price?–?and in several instances, for a new antenna.

The subsidy allocation for this already has a projected shortfall in funding of R1.94?billion.

The set-top box cost of R700 to R750 will likely have to be revised upwards as the process keeps dragging on.

While South Africa was ahead of the African pack in announcing plans to switch off analogue and opt for digital, it is now among the stragglers on the continent.

Reid says the government’s decoder proposal is fraught.

“The process?–?highly bureaucratised?–?is asking people to prove they are poor. Is that not an affront to human dignity? Also, for people to apply for the subsidised set-top box –?whether it’s 70% or 100%?–?people are going to have to produce documentation for that process, a TV licence, an identity document, bank details, proof that you earn R1?500 or less. It’s humiliating having to go to an employer asking for such a letter.

“Secondly, it excludes the unemployed.”

Most recently, Thailand migrated to digital TV and the public could just walk into a retailer with a voucher and pick up a free decoder. Rwanda switched over on July 31 but left millions of households without decoders.

Civil society critics of the government’s programme say public broadcasting is in danger of losing the war to its private counterparts. OpenView HD and DStv offer increasingly cheap packages and people may choose to buy content there rather than pay for a state set-top box and an annual licence fee.

Private broadcasting

Consumers who can afford it suddenly have a lot more options. The launch of Times Media Group’s online Vidi service, followed a week later by Altech’s new Node console, mean new services are now going head-to-head with MultiChoice’s DStv BoxOffice and DStv Catch Up services.

“It’s a great development,” says George Kalebaila, senior research manager for telecommunications and digital media at the global advisory services firm International Data Corporation Africa.

“Further competition will come from Telkom if they decide to launch VOD because they have the infrastructure and the customer base.”

He says the start and roll-out of VOD services in South Africa has been hampered because broadband has taken time to grow and data is still expensive.

“Most people now use smartphones and tablets, but data prices remain exorbitant. You need 2GB of data to watch just one movie. That puts these services out of the bracket of many people who would want to view it on a mobile broadband connection.”

Kalebaila says VOD use will accelerate.

“VOD is a big opportunity and the expectation is that take-up will happen in a big way, especially as mobile data becomes cheaper.”

He says VOD opens up an opportunity for incumbent broadcasters like the SABC, and DStv to “go into this segment and offer catch-up television, and to partner with Vidi and other players or offer it on their own”.

“They’ve got some great local TV content that people would like to watch online on demand. And it’s an opportunity to not lose market share and be cut out of this value chain?–?especially with young viewers who tend to watch TV on multiple devices and on demand. Viewing habits are changing fast as we move into the digital age.”

Taryn Uhlmann, Vidi’s marketing manager for VOD platforms, says despite limited bandwidth penetration, slow internet and high data costs, the service is mainly targeting households with Wi-Fi in the early stages.

“We believe the landscape will change and broaden quite quickly.”

She admits content is “enormously expensive, so we have to build our catalogue and offering over time”.

John Kotsaftis, CEO of DStv Digital Media, said the BoxOffice and Catch Up services offered by MultiChoice had been successful and users were often astounded at the volume of movies, sport highlights, movie collections and series that are available on the Catch Up service.

These can be accessed on PVR decoders and on PCs, iPads and iPhones.

Critics say government’s plan to migrate to digital television is fraught with red tape.

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