Dina Pule signed R550m SABC archive deal

2013-10-13 10:01

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When she was communications minister, Dina Pule sanctioned the controversial R550?million contract that was signed between the SABC and MultiChoice in July this year.

This week, sources who are aware of the deal raised concerns that the contract was actually selling off the SABC’s broadcasting assets to South Africa’s dominant pay-TV player MultiChoice.

They raised concerns about whether the deal was compliant with the Public Finance Management Act, if it had ministerial approval and if the contract gave MultiChoice exclusive rights to the SABC’s archive.

MultiChoice and the SABC denied the archive claim and the department of communications (DOC) said the joint task team (JTT) appointed for the SABC was looking into this.

The department’s spokesperson, Siyabulela Qoza, said: “The JTT was established by the current minister (Yunus Carrim) and includes representatives of the SABC, the DOC, National Treasury and the Auditor-General’s office.

“One of its tasks is to consider how the contract with MultiChoice fits into the long-term strategy of the SABC and how financially beneficial it is to the SABC.”

Qoza said Pule gave her approval for the SABC to proceed with the contract, provided there was sufficient funding to support the channel.

The channel in question is the SABC’s 24-hour news channel that is now on the DStv bouquet and an entertainment channel that has yet to be launched.

Other sources have confirmed that the SABC has a letter about the contract.

SABC spokesperson Kaizer Kganyago said: “MultiChoice has some 20?million viewers, which the SABC will leverage for advertising revenue.

“The SABC will retain all advertising revenue on both the news and entertainment channels.”

Kganyago added that the SABC had a vast archive.

“MultiChoice only has exclusive (access) to a small portion of the archive that will be used to package the entertainment channel,” he said.

The contract signed between MultiChoice and the SABC will affect the arbitration negotiations to settle whether security controls will be included in the set-top box for digital migration.

These negotiations were set up by Carrim. But City Press understands that the negotiations are deadlocked at the moment.

The contract specifically states that the SABC’s 24-hour news channel and the yet-to-be-launched entertainment channel cannot be broadcast on a platform that has a conditional-access system.

Conditional access can be used to prevent viewers from receiving programming they have not paid for or from receiving programming in areas where it is not licensed to be seen.

If e.tv gets its way and secures a conditional-access system for the digital terrestrial television (DTT) set-top box, this will prevent the inclusion of the SABC’s new channels.

MultiChoice chief executive Imtiaz Patel said he was “very comfortable” with the access clause in the contract between MultiChoice and the SABC.

MultiChoice is vehemently opposed to conditional access on the set-top box.

It sees this as giving e.tv a free ride to offering pay-TV services on the box at a later stage.

The chief operating officer of e.tv, Bronwyn Keene-Young, has denied that e.tv planned to launch pay TV on the DTT box.

Keene-Young has offered to give a commitment to that effect to government.

The channel’s argument has changed substantially over time and it is now in favour of conditional access.

According to industry insiders, the SABC is divided into two camps – one that is in favour of conditional access and the other that isn’t.

Kganyago said different views were being expressed in all discussions and this could not be regarded as “camps”.

An independent consultant in the broadcasting sector said: “MultiChoice is extending its monopoly into the DTT platform.”

At the moment, M-Net has approximately 50?000 subscribers and the move could see a rapid growth in this number.

The consultant said there was a crisis in free-to-air television as pay TV was taking in a substantial amount of the advertising revenue in the country.

This leaves free-to-air players to deal with the issue of underfunding.

Speaking at the launch of Sentech’s new television platform FreeVision, this week, chief executive officer of e.tv Marcel Golding said that free-to-air television in South Africa was in crisis.

He added that, five years ago, 87% of South Africa’s television-viewing households watched free-to-air television only.

This figure now stands at 68% and could drop as low as 50% by the end of the decade.

Sentech chief executive Setumo Mohapi said: “Marcel was right. We need to grow free-to-air television and eventually someone will have to take a decision.”

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