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Digital Migration Could Harm TV Business, Says Ovum

digital migration

According to Ovum, most of the Sub-saharan countries, including technology giants such as Nigeria and South Africa, may not reach the digital migration deadline.

The company attributes the likely delay in Nigeria and South Africa to lack of public awareness, inadequate funding that should be made by governments to roll out digital TV infrastructure; and insufficient set-top box supplies.

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To curb this, the TV markets are looking at the possibility to switching off all analogue TV signals early before the actual d-day, an exercise that will leave many homes with no TV reception. This means that advertisers will look for alternative ways to advertise and will eventually decline advertising revenue.

Adam Thomas, Ovum’s lead analyst for Global TV Markets, says: “In Tanzania, the switchover process was pushed through recklessly, with damaging results. Thousands of homes lost their ability to watch TV and advertising revenue suffered as a result. But this mentality to rush the process persists, not least in Kenya which seems intent on repeating the same mistakes.

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Ovum research also found an understandable eagerness among regulators to raise revenue from the sale of the spectrum that will become available following analogue switch-off and which will, most likely, be snapped up by mobile operators. This is another factor behind the rushed switchover.

Ovum’s Ismail Patel, who tracks media and entertainment across the Asian, Middle Eastern, and African regions, adds: “While the sale of spectrum will benefit the mobile sector, regulators could harm the TV business if they act with undue haste to get their hands on potentially lucrative spectrum.

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“African governments and regulators need to accept that the 2015 deadline will be missed and shift their focus on to getting the process completed as quickly and efficiently as possible. Ovum believes that forcing through analogue switch-off is ultimately counter-productive.”

Ovum also discovered that initial digital terrestrial TV (DTT) launches are dominated by the pay-DTT services of the operators StarTimes and Multichoice.

This has created a sector where the paid-DTT option represents an artificially high percentage of total homes using DTT to receive TV. The result is that more than 90 percent of terrestrial TV was still analogue at end-2013.

According to Thomas, the early focus on pay DTT has created a misconception among the sub-Saharan audience that DTT is intrinsically a paid service.

“Once there is awareness that DTT can be received without payment then free-to-air DTT will be the overwhelming choice for most homes and the transition from analogue to digital will be better placed to proceed.

“This may mean StarTimes and Multichoice will be disappointed with the number of pay DTT subscribers that they can ultimately attract,” Thomas said.

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Caroline Vutagwa
Caroline Vutagwahttps://my.techmoran.com
Minding my own business is not enough for me that's why you will always find me minding Africa's Businesses as well as Technology and of course letting you know about it. Talk to me on [email protected]

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