Asha Speckman
TOPTV aims to increase its decoder sales by 300 000 in the next 18 months from the 450 000 decoders already in the market, according to Kgomotso Lekola, the chief operating officer of the country’s second pay-TV broadcaster.
In comparison, dominant pay-TV broadcaster DStv, owned by Naspers subsidiary MultiChoice, grew local subscribers by 14 percent to 4 million in the year to March.
Much of TopTV’s growth is expected to come from the company’s new strategy of reaching the mass market through prepaid viewing, which was launched last month.
“We see ourselves very much as a market disruptor. We think that with the strategy we have put together… we should be able to sell another 300 000 to 400 000 decoders in the next 18 months,” Lekola said.
“Prepaid for us is an important step because it allows us to launch a ubiquitous payment platform for a wide range of services which we are going to launch. If you see it narrowly, you’ll think it is a bad idea, but if you think about the broad implications and types of services you can offer, you begin to realise how important it is,” Lekola said.
He said prepaid viewing could be applied to video-on-demand too, a prepaid service that rival DStv also offers.
TopTV viewers could buy prepaid vouchers to view a specific event on television, or services over other devices such as internet television.
Viewers could upgrade their package at any time without requiring the availability of call centre agents.
Features such as Box Office and personal video recording, which have distinguished DStv, feature in TopTV’s plans.
“We are going to be offering all of those services. You just watch that space. In good time,” Lekola added.
About six months ago, Lekola and Eddie Mbalo, TopTV’s chairman and acting chief executive, were brought in to devise a turnaround plan for the business. It suffered bad publicity on several fronts, including a failed bid to launch two pornography channels.
The business model was altered and certain operational inefficiencies eradicated.
Lekola, who would not reveal financial figures, said a 33 percent improvement in bottom line had been achieved since the turnaround was implemented.
A programme to integrate and automate key systems to reduce human intervention was under way and had been glitch-free for customers, Lekola noted.
The restructuring is expected to be completed within the next two years.
“When you are a new player and you enter a new market dominated by a single player and for a very long time, you cannot come into the market and do what they do.
“You need to understand where you are playing and why you are playing.
“As a business, how easy do you want to make it for your market to transact?
“You’re offering them a service and they pay you.
“For us the answer was rather obvious. It’s prepaid,” Lekola said.
He said the argument that prepaid subscription was unsecure and not guaranteed money was a fallacy.
More than 50 percent of TopTV’s subscriber base paid via cash or electronic transfer.
TopTV had sold “a couple of thousand” prepaid vouchers with limited marketing and “tens of thousands” through distributors so far.
According to Lekola, 65 percent of subscribers using prepaid vouchers were dormant and previously had not been paying their accounts.
Another feature of the market is a single employed person often having to support multiple dependents, including extended family.
Prepaid vouchers enable members of a household to contribute towards pay-TV airtime rather than saddle one individual with a debit order, according to Lekola.
TopTV will begin a marketing campaign soon, but it is focusing on cementing its retail distributor network and is in talks with a large financial institution, which will distribute prepaid vouchers on behalf of the broadcaster.
The battle for market share will not be easy as compelling content is critical to attract the consumer.
MultiChoice has the benefit of a more than 20-year head start, and the political backing of the previous political regime helped the broadcaster succeed. The rights to popular content, especially sports, makes for a formidable competitor.
Lekola believes that similar political backing is necessary for new players to succeed, especially those who will be licensed out of the process of migrating from analogue to digital broadcasting, and to ensure transformation of the industry.
TopTV has also reviewed its content procurement processes and is in discussions with local content producers.
The company would announce news in this regard soon, Lekola said.