Broadcasting Services

South Africa: Broadcasters Calls For A Limit On Pay-TV Advertising Revenue

Free-to-air commercial broadcaster in South Africa has informed the Independent Communications Authority of South Africa (ICASA)  of its concerns over the sudden proliferation of digital streaming services like Naspers' Showmax, Netflix, Amazon Prime Video and others in South Africa.

In a statement to ICASA, the broadcasters said that: "The issues that need to be urgently looked into is the participation of OTT players in the advertising market which so far has gone unchecked and unregulated.

This move is beginning to erode the revenue base for the free-to-air and pay-TV broadcasters."

The broadcasters want specific limits placed on the advertising revenues that pay-TV operators can earn, which means industry players like MultiChoice and StarSat who are supposed to generate the bulk of their income from subscription fees, will be limited in how much advertising airtime it can sell and the revenue it can earn from that.

The broadcasters believe that stringent caps on advertising revenue share by subscription broadcasters could go a long way to addressing imbalances in the market. It added that if the subscription TV providers did not compete with Free-to-air broadcasters for available advertising revenue, then it would pose less of a threat to Free-to-air television.

"The current advertising limit placed on the subscription television broadcaster is both meaningless and vague, and that is common knowledge that MultiChoice rakes in almost 100% of subscription revenue in South Africa and 48% of total television advertising revenue".

Earlier on, released a report which indicates that the total number of Free to air households had decreased by 2.5% from 8.4 million in 2012 to 8.1 million in 2016, while numbers of pay-TV homes increased by 48.4% from 3.9 million in 2012 to a total of 6.2 million by 2016."

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