If the reports are to be believed R500m has been flushed down the plopper with this venture into media and broadcasting. There are probably a million and one theories as to what went wrong and why it was such an epic fail. I cannot accurately comment because I do not know what the overall strategy was in the first place. Rumour has it that one of the first things that they wanted to do was build an ISP… sheesh.
The press releases about not obtaining quicker returns on the investment in the media market seems a like hogwash to me. I think that there is good money to be made in the media space – the key, I believe, is how you go about it.
Telkom / Telkom Media found out to their detriment that it is hard to compete with an already established player, especially one who has the market completely cornered already. It’s not so nice when the shoe is on the other foot eh?
Multichoice offer almost all there is to offer in the broadcasting space. They do it well and successfully. But they do have a weakness, one in which Telkom Media failed to exploit.
Telkom had / has the ability to replace the traditional satellite+decoder medium. Dish receivers and decoders are static, ugly and cumbersome. I believe that this could have been Telkom Media’s niche. Having a sound strategy to provide content over IP is where they could have quite easily have stolen ahead.
It would be foolish of me to think that DSTV/Multichoice do not have an ace already up their sleeve with this regard, but I believe that a sound strategy would have been to partner with a company such as Apple to provide top quality video and music that is currently on offer in the itunes store, locally.
The world is changing. People want services on demand. The itunes store is now selling and renting High Definition content at the click of a button, as well as the vast array of music, videos and applications that they already offer. At the moment, this is out of reach for most South Africans due to the high costs associated with international bandwidth. A 40 minute show is about 1Gb is size, total cost of an episode would be approximately R80 if you factor in the R60 that has to go towards data costs.
But by providing local caching as well as offering the opportunity to purchase / rent locally produced content, Telkom Media would have definitely gained a share of the market – albeit a small share initially.
I always like to use my wife as an example of a typical user. If it works for her, then it would be safe to say that it would work for most. She is not computer illiterate, far from it, but rather she likes things to work simply, with the minimum of fuss.
She enjoys watching the soapies in an evening, but her biggest gripe is that she does not have the luxury of revolving her life around the times that the show is broadcast. I asked her that if she were to pay R5-10 per episode and was able to watch it whenever she liked, she said ‘of course she would’. The question seemed a bit silly for her! It was so obvious.
Now, why can’t that happen? Yes, you can have PVR and set it all up so it records when and what you want… But that is still hassle and fuss.
We are not talking about splitting the atom here. Maybe Telkom Media identified the above – I don’t know. What I do know is that they failed to execute any plan and they also failed to sell on the license that they obtained, and by winding down the business, rendering it void. As I understand and don’t understand it, Telkom Media were looking for investments in the billions of rands… How and why, I have no idea. That would be off putting to any investor.
Complete waste of an opportunity if you ask me.