INTERNATIONAL: ISSUE - Colourful consortia bid for South Africa’s new TV licence/Global media giants team up with political activists, Elizabeth Kinghorn writes

The list of foreign shareholders lining up to vie for South Africa’s first free-to-air commercial TV station this spring reads like a Who’s Who of the world’s media companies: Time Warner, United News & Media, News Corporation, Australia’s Nine Network and Television France One have all decided to put muscle behind South African black empowerment groups to bid for the licence.

The list of foreign shareholders lining up to vie for South

Africa’s first free-to-air commercial TV station this spring reads like

a Who’s Who of the world’s media companies: Time Warner, United News &

Media, News Corporation, Australia’s Nine Network and Television France

One have all decided to put muscle behind South African black

empowerment groups to bid for the licence.

Although initial investment and subsequent returns are relatively small

by global standards - and foreign share holding is limited to 20 per

cent - investors believe there are significant returns to be made. An

average revenue of dollars 80 million by the year 2000 is predicted,

even if the new broadcaster takes less than a fifth of the dollars 460

million advertising market in South Africa. In addition, international

media groups see the country as an important entry to the African

continent. Start-up costs for the successful broadcaster are estimated

to be between dollars 100 million and dollars 160 million.

The consortia putting their hands up for this new experiment in South

African TV include some unlikely bedfellows. The Black Housewives’

League is in the same group as Fox Sports, for example, while Time

Warner Entertainment has teamed up with the Textile Workers’ Union. The

reason is that stringent criteria have been laid down by the Independent

Broadcasting Authority for the new private broadcaster that include

proof of financial viability and evidence that the successful bid will

empower previously disadvantaged population groups.

The successful candidate also has to promise a varied, quality service

with at least 20 per cent of programming coming from South Africa

itself, and the IBA has already asked for detailed written submissions

from each group to determine its suitability for the task. In addition,

to ensure ’transparency’ - a post-1994 election buzz-word in South

Africa - it is also holding public hearings which are due to end on 6

March. The IBA has said it would make a decision by the end of the

month, but few people in South Africa think it will make the


The successful bidder will be awarded a licence to broadcast nationwide

from October 1998, although there are no guarantees that the licence

will be renewed after the initial eight-year period. Applicants have

been warned that the licence will be revoked if the successful candidate

fails to comply with its licence conditions.

Consortia are required to answer stringent questioning on the salaries

they propose to pay employees to the standard of equipment they intend

using. They will have to provide news, information and entertainment in

the face of strong competition from the existing broadcasters, the South

African Broadcasting Corporation and M-Net.

The SABC’s public mandate has three channels and broadcasts in the 11

official languages. Its analogue satellite channel, Astrasat, launched

two years ago, has not been successful and will probably be closed


M-Net offers an upmarket service for more than one million subscribers

and its successful sister digital satellite service, Multichoice DStv,

has built up a subscriber base of almost 200,000 in two years.

There is no doubt that the new free-to-air TV station will cause a

shake-up in the South African media industry. Competition should improve

programme quality, give advertisers more buying power and attract more

TV viewers.

While the public seems unaware of the imminent increase in viewing

choice, advertisers are eagerly awaiting the new channel’s arrival. They

believe the third player will give them more clout against the present

SABC/M-Net duopoly. However, the new broadcaster will not have an easy


It will not have the advantage of the SABC’s licence fees or M-Net’s

subscriber base. When the idea of a new free-to-air national channel was

first mooted, the SABC was in a state of upheaval. Now SABC audiences

and programming have settled down and the public broadcaster seems to be

on the right track.

While the involvement of international media groups have made headlines,

the IBA hearings are a South African occasion. This comes over in the

traditional African attire worn by bid members and in the diversity of

groups that have joined the bidders.

Nowhere else in the world would you find such a colourful composition of

consortia, including businesses, trade unions, women’s, youth and church

groups, returned exiles, ex-political prisoners, as well as media and

entertainment professionals. The deregulation of TV, marked by this

first commercial licence, is symbolic of the new South Africa.

In addition, observers do not see advertising spend growing


As a new dawn breaks for TV in South Africa and the IBA faces its

biggest test yet, there is a certain thrill of democracy in action.

(Despite the fact that M-Net and SABC compete head-on, advertisers

haven’t been able to play one off against the other in negotiating

deals.), particularly in the rural areas.

The gatherings seem to celebrate the country’s cultural diversity and

reflect its dreams to educate and promote development of the youth and

the poor.


Consortium       Local shareholders               Foreign partners

Free to Air      57% are ’historically            Fox Sports (5%)

                 disadvantaged’, including        (jointly owned by

                 blacks and women(Free to Air     News Corporation &

                 Empowerment Company, Sasani      TCI) United News &

                 Videovision                      Media (UK) (15%)

                 African Dream TV,

                 Primedia, Nedcor,

                 National Sports

                 Council of SA)

Midi Television  Hosken Consolidated Investments  Time Warner

(e-TV)           (investment arm of SA            Entertainment

                 Clothing & Textile Workers’      (US) (20%)

                 Union and National

                 Union of Mineworkers), Nafcoc

                 (representing black business)

Station for      Ten Alliance Holdings,           Nine Network

the Nation       Indyebo, several women’s         (Australia) (20%)

                 investment companies,

                 Moribo (Thebe

                 Investments), Kersaf

Afrimedia        North West Women’s               None

                 Investment Co, Black

                 Housewives’ League,

                 National Assoc. for Woman

                 Empowerment, Maxtel,

                 Communications Worker’s

                 Union, Youth Investment

                 Portfolio Trust,

                 Masimo, Safika

Community TV     Millennium Entertainment,        United TV Holdings

Network          Group Africa, CTN TV (68%        (Canada)

                 groups, stokvels, churches),     (5.2%) (Linked to

                 Sanlam/Genbel                    News Corp)

New Channel      National Empowerment             Television France One

TV               Consortium

Island TV        All black (includes returned     Modern Times Group

                 exiles, ex-political             (Sweden)

                 prisoners, media

                 professionals), Makana Trust


SABC Three public service channels, Astrasat analogue satellite


(currently free-to-air)

M-Net Two pay channels

Multichoiced Stv 79 digital satellite options (subscription)

Edited by Karen Yates

Tel: 0171-413 4271.

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