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Free-to-air broadcasters in SA want bigger slice of the advertising pie as pay-TV cashes in

Pay-TV enjoys the lion’s share of the broadcast advertising revenue and free-to-air operators want a review of the system to to secure their sustainability and what they believe is an equitable share of airtime sales income.

This is contained in the draft findings document of the Review of the Independent Broadcasting Authority Regulations of 1999, which covers advertising, infomercials and programme sponsorship.

Broadcasting firms such as eMedia Investments, Media Monitoring Africa, MultiChoice, the National Association of Broadcasters, the South African Screen Federation, and the South African Broadcasting Corporation (SABC) submitted written representations to the Discussion Document on the Review of the Independent Broadcasting Authority Regulations of 1999.

Concerns over the current landscape of advertising revenue dominated the submissions made by several companies, with varying views on how the playing field should be levelled.

eMedia, which owns free-to-air and the 24-hour news channel eNCA, indicated in its submissions that the advertisement revenue share for itself was 21.71%, while the SABC held 28.78%. MultiChoice enjoyed the biggest share at 39.02% and the remaining 10.49% was shared by other broadcasters.

eMedia is of the view that there should be an inquiry to look into whether the current share of advertising revenue by subscription services is appropriate, and to determine the impact of online advertising on the TV advertising market in the long and short term.

The company urged the authority to “protect the sustainability and viability of free-to-air services”.

“eMedia states that with the shrinking advertising pie available to broadcasters, to ensure the continued viability of free-to-air broadcasters, limitations need to be placed on the amount of advertising time available to subscription broadcasters,” the company proposed.

It further raised concerns that MultiChoice’s monopoly position would worsen the impact on free-to-air broadcasters’ financial viability and that the subscription broadcasters did not have limitations to their licences regarding the duration of advertising.

The Independent Communications Authority of South Africa (Icasa) said in the draft findings that it accepts there are market forces such as audience fragmentation and competition with unregulated on-demand services which negatively impact broadcasting revenue trends.

It said it would continue to observe and monitor these trends.

The public broadcaster, the SABC – which implored the regulator to approach Parliament to amend the Electronic Communication Act to cap the advertisement and sponsorship revenue earned by pay-TV broadcasters – said its revenue for the period between April 2016 to March 2020 decreased significantly and that SABC TV and radio advertising revenue was on a decline.

In its submission to Icasa, the company had proposed an amendment by Parliament to the regulator to “prescribe regulations that place an effective revenue cap on the advertisement and sponsorship revenue on subscription broadcasters”.

Icasa said the matter was outside the scope of the inquiry. News 24

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