Financial review

 

Operational review

 

Pay television


 

 

South Africa

The pay-television market is moving through a period of significant change in South Africa, including the migration from analogue to digital terrestrial television (DTT). Although this migration is scheduled to start in 2012, details on national standards and regulations governing DTT are yet to be finalised.

Other notable regulatory activities during the period included:
  • An invitation to apply for new subscription broadcasting licences, issued by Icasa.
  • Icasa published its review of the broadcasting regulatory framework towards a digitally converged environment.
  • An inter-ministerial committee led by the minister of social development aims to introduce legislation to severely restrict alcohol-related sponsorship of sports events and alcohol advertising on television.

MultiChoice ended the year with four million subscribers, with growth of 492 000, including the entry-level Easyview bouquet. This reflected strong growth from the Compact bouquet, aggressive marketing on decoder and PVR pricing, and the appeal of special events such as the Rugby World Cup.

The ongoing focus on content continues to enhance the viewer’s experience. Launches during the year included Investigation Discovery, Discovery TLC, Comedy Central, Studio Universal, Disney Jnr and Disney XD. M-Net also launched Africa Magic Swahili for viewers in Africa.

In line with the group’s commitment to promoting local content, production continued on the popular series, The Wild, while MasterChef SA was screened for the first time in 2012. Now in its second year, Mzansi Magic is providing a popular showcase for local productions, including a new telenovela iNkaba, and Africa Magic was expanded from two to four channels during the year.

Ongoing investment in new technologies and services continued during the review period. BoxOffice, a video-on-demand service for PVR Premium subscribers and online for all users, was well received. By year-end, 262 400 households had registered on the service. MultiChoice has also expanded its high-definition (HD) offering and is investing in and developing new services that will be rolled out in the new financial year.

To cater for sports enthusiasts, SuperSport launched SuperSport 3 HD in 2011. SuperSport also launched SuperSport 9 East (SS9 East) to carry all the local football and other sport it produces for the East African region, and enhanced the SuperSport Blitz offering to include live crossing to sports events and high-quality relevant reports in 30-minute blocks.

 

Following the successful broadcasts of the Rugby and Cricket World Cup tournaments and Africa Cup of Nations, SuperSport secured rights to the 2014 Fifa World Cup. The South African Premier Soccer League contract was extended.

In conjunction with the South African national departments of education and sport, SuperSport launched the broadcast of a schools soccer league for top schools across the country.

DStv-i, launched in the prior year, provides a deeper understanding of viewing behaviour on the DStv platform. This tool is being extensively used by both the advertising industry and internal stakeholders, which enabled DStv Media Sales to introduce guaranteed trading.

Mobile technology continues to undergo rapid technological evolution as is evidenced by the increasing number of smartphones. In Africa the mobile will be the primary device for information and communication for the majority of the population. It is therefore important in the long term that we continue to develop our mobile products and services.

DStv Mobile is in its infancy, and will require significant investment over the long term. However, this know-how is important to develop South Africa’s engineering capability in the global information and communication technology field.

MWEB established an open-peering regime with all other players in the market. It also connected to the Seacom cable during the year, maintaining its leadership in providing more affordable high-speed internet rates in South Africa. The national backbone network connecting Durban, Cape Town and Johannesburg with 10Gbps became operational in November 2011 and is being used to deliver group content and internet to users.

 

 

Sub-Saharan Africa

Across the rest of sub-Saharan Africa, where MultiChoice operates in 48 territories, there has been reasonable growth despite the entry of several new competitors to the market. The regulatory environment remains challenging with new broadcast bills, regulations, licences or licence renewals in Angola, Kenya, Namibia, Nigeria, Uganda and Swaziland. MultiChoice was issued digital terrestrial service licences in four countries to date.

The DStv subscriber base increased by 192 000 to end the year at 1,6 million households.

Localised programming and channels remained a key focus for the business with the launch of a number of specialist channels including Bukedde in Uganda and Africa Magic Swahili and SS9 East in the rest of East Africa. DStv English subscribers received new channels including Studio Universal, Comedy Central, Select Sport, Discovery ID and Discovery TLC. A new Chinese offering, Great Wall Africa, was launched and includes channels such as Phoenix Europe, CCTV Entertainment, China Movie Channel, Shanghai Dragon and Hunan TV.

SuperSport continued its football coverage in Angola, Ghana, Nigeria, Kenya and Zambia and extended this to Uganda to cover the Uganda Super League during the year.

On the technology front, the HD offering has been extended to include Movie Magic 2. On the DVB-H platform, the Drifta and Walka were launched in Kenya, Nigeria, Namibia and Ghana. Significant investments were made in building new digital terrestrial television platforms under the GOtv brand in Uganda, Zambia, Kenya and Nigeria. These are focused on a low-cost mass-market television offering.

 

Technology

 

Irdeto delivered 18,8 million conditional access units during the year, 2,2% more than the prior year. Volumes were increasingly destined for emerging markets, with lower average selling prices. Resources and costs were managed efficiently while meeting customer requirements.

Irdeto continued to invest in developing solutions to manage and protect digital assets distributed via the internet. The BD+ technology and team from Rovi that protects some of Hollywood’s most valuable content, and BayTSP, a service provider to content owners that detects and stops online piracy of their content, were acquired during the year.

ActiveCloak™, Irdeto’s solution for protecting digital assets online, won major platform operator contracts during the period, as those operators extended their offerings online. The combination of ActiveCloak™ and acquired capabilities will form more complete solutions for online media.