Koos Bekker, Chairman, Naspers: Interview

Interview: Koos Bekker

How do you expect the transition from analogue to digital terrestrial TV (DTT) will affect the sector landscape?

KOOS BEKKER: The migration to DTT is a welcome development for South Africa that has been a long time coming. It will clear the radio frequency spectrum occupied by broadcasters to enable the provision of wireless mobile broadband services and other innovative applications. Once the digital migration has been concluded the digital dividend will be released to boost internet access and penetration.

On the content side, DTT will create the capacity for lots of new, open channels, bringing potential for different, thematic local content to gain a bigger presence. You will start to see special interest and language groups come out and advocate for a special language or regional station, for example.

In the past, with normal terrestrial frequencies such as VHF and UHF, you could fit about four TV channels. Then the airwaves would be full because you need about 7 MHz per channel, with free space required around it so as to avoid interference. As a result, TV used to be very inefficient in frequency use, with four or five channels at the most, depending on your topography. Now you can have 20 channels for free. DTT should provide the significant change it has in other countries, giving smaller groups chances to go on air.

What potential is there for further pay-TV penetration in the South African market?

BEKKER: I believe penetration of pay-TV will not rise too much in the future, as in its current form it is quite a mature industry. I don’t see that much further growth for satellite-based TV. However, DTT opens up completely new potential, for the viewer does not need to buy a dish, only a cheap antenna, and – once all TVs become digital – will not need a decoder. All of a sudden, for just one small investment in an antenna, everyone will have access to numerous free TV channels. This will provide great new opportunities for content creators. I expect content generation to become the most attractive sector inside the TV industry.

Going forward, we will see bigger growth in TV over the internet. You will not be comparing locally based broadcasters, but global content providers such as Netflix, Amazon and Google through YouTube. The regulators will have little room to control these as there is no licensing. Previously, regulators controlled the industry by allocating scarce spectrum and attaching strings to those who received licences, such as a certain quota of content to broadcast. As a result I think prices will come down.

In your opinion, is a lack of broadband expansion an inhibitor to growth?

BEKKER: I believe that the argument that a lack of broadband is an inhibitor lacks weight. Most people will say it is a vital issue, but going forward Wi-Fi will be the preferred connection to consume content, most likely on mobile devices. In China, for example, 50% of movies are consumed on a mobile phone via Wi-Fi, which is free. In Africa broadband roll-out will be slow, and in some countries it will make no progress at all, with virtually all development taking place by Wi-Fi across platforms such as a PCs, laptops, tablets or mobile phones.

In terms of other media platforms, print is slowly declining as digitalisation continues. This is a shame, as print – and specifically newspapers – has a high quality of readership and an intensity of experience. The question will be, as print goes and newspapers go online, will our capacity to consume content change? Newspapers will end up consolidating. Radio is in a better position, as its main use is in cars, with no obvious replacement available. Internet will eat into TV a lot more than into radio.