DStv-owner in big fight with SABC over money

3 years ago 1

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The South African Broadcasting Corporation (SABC) and MultiChoice have entered into arbitration over the recently changed must-carry regulations.

The Independent Communications Authority of South Africa (Icasa) will oversee the process to help resolve the negotiation deadlock between the two broadcasters.

SABC COO Ian Plaatjes, during a sitting of the portfolio committee on communications on 29 November 2022, said the broadcasters had reached an impasse in negotiations.

“We have been in negotiations with MultiChoice for the last couple of months now. We’ve unfortunately deadlocked on that,” Plaatjes said.

He explained that he could not provide figures relating to price negotiations between the two broadcasters as the information is sensitive.

“We will be going through an Icasa arbitration process [and] when the outcome of that occurs, we will know what the rand value of that will be and will be able to share that information,” Plaatjes added.

Icasa gave the SABC the green light to charge pay-TV services — such as MultiChoice’s DStv — for its free-to-air broadcasts in April 2022.

Subscription broadcasting services (SBS) are forced to carry specific channels provided by the SABC. Icasa’s gazetted changes specify that the public broadcaster can now negotiate carriage fees for the channels.

However, the SABC must negotiate pricing with the various pay-TV operators.

Must-carry channels include SABC 1, SABC 2, and SABC 3, which pay-TV players like DStv previously broadcast at no charge.

Optional channels include SABC Sport and SABC Education.

Curiously, the arbitration process initiated with Icasa between the public broadcasting service (PBS) and pay-TV broadcaster goes against the regulator’s stipulation that negotiations must proceed without its interference.

“Payment regarding the transmission of must-carry channels must be negotiated by both PBS and the SBS in terms of section 60(3) of the [Electronic Communications Act],” it said.

“The PBS has an obligation to serve the public by producing content that is in the public interest.”

Before the gazetted changes, regulations stipulated that SBSs must carry the SABC’s free-to-air channels to help the broadcaster achieve its mandate of keeping South Africans informed.

They were not required to pay the SABC for the content and only had to cover costs associated with broadcasting the channels.

MultiChoice took issue with the adjusted regulations, saying it had spent millions broadcasting the SABC’s channels on DStv while the public broadcaster hasn’t contributed a cent.

According to the pay-TV broadcaster, the SABC generates more than R500 million each year in advertising revenue from DStv’s broadcasts of its channels.

However, the SABC disagreed, saying it believes the content is attractive for DStv subscribers.

The public broadcaster’s CEO, Madoda Mxakwe, said it isn’t viable to have “the public broadcaster and public funds partially funding the largest television broadcast business” in Africa (DStv).

MultiChoice’s executive for corporate affairs, Collen Dlamini, disagreed with Mxakwe.

He said MultiChoice supports rational must-carry obligations in the public interest but added that it is against regulations that force SBSs to pay for such channels.

“The practical effect is to compel subscription broadcasters to use their programming budget to pay for must-carry channels without having any choice about whether it wants those channels, and even if it does not wish to carry them, does not consider that it obtains material value from them and does not agree to this in negotiations,” he said.