Safaricom’s interest in TV market could kill Pay TV
Safaricom has said it wants to venture into the TV market. The model they intend to use is not yet clear but from the information gathered it seems they could be working on providing a broadband gateway through which TV stations like Citizen and KTN can provide content. I also think they could be looking toward providing premium content currently available only on Pay TV.
Most of the interesting content, be it sports or premium movies, are already available online. The setback we are having is that access to online content is cost prohibitive so we prefer to either watch Free to Air or go with Pay TV bouquets. The obvious disadvantage of Free to Air is that the we are limited to the shoddy programmes they have for us on offer, whereas the Pay TV bouquets are packaged such that if you don’t pay the top price your entertainment experience wouldn’t be far better off that the ones enjoyed by the Free to Air viewer.
As a matter of concern on the way the Pay TV provide their content, I have always desired for them to charge per channel, instead of bundling channels in bouquets. In the article Pay TV should charge per channel I offered the Pay TV providers a nice calculation that would see them make more profits from viewers while at the same time providing the viewers with the ability to freely choose whatever channels they want to watch. Almost all the Pay TV providers had a read of the article and those who reached us with comments just argued that the cost of allowing users to pay per channel is way too costly. I still would like to know the cost that would be incurred by allowing viewers pay per channel. Currently as things stand, a Pay TV provider can easily choose to switch off a particular channel or add another by mere computer programming. In any case, the Pay TV Provider will have to broadcast all the channels available and only disallow someone who has not paid for the higher bouquet to watch particular channel bundle by programming his/her decoder. Otherwise how would they explain the availability of premium content to my immediate neighbor but not me?
That aside, the satellite and cable Pay TV providers in countries with affordable Internet connectivity are already feeling the heat thanks to the numerous Internet TV services that are springing up in those countries. Viewers are running away from scheduled programming to accessing content at whatever time they want it. This phenomenon has enabled YouTube to aim at beating standard TV offerings. YouTube is already planning to provide well organized content not only on PCs, Tablets and Smartphones but also to stream them directly to TV; and that explains why Google has launched a beautifully done product – chromecast.
Safaricom’s intention to venture into the TV market could be a big step in ensuring that online TV conent is available at affordable Internet rates. It doesn’t really matter whatever it is that Safaricom is planning but as long as that plan includes lowering the Internet cost such that someone could access online TV/videos at a cost less than or equal to Kshs 3,000 a month and access it fast and reliably, then I do not see any reason someone would still want to pay for a Pay TV bouquet. The beauty of Safaricom’s involvement in the market will also be the expansion of the available local content to watch via the Internet.
But for Safaricom still needs to setup the LTE (4G) Internet that they have been testing for quite sometime. The politics surrounding Digital Migration seems to have delayed the implementation of this technology but hopefully if the Migration happens by December this year then it won’t be long before they are allocated part of the to be available white spaces. LTE promises to give us faster reliable Internet and at the same time lower the connectivity cost.
After the Digital Migration is successfully done, and given that most consumers are expressing dissatisfaction with the way the Pay TV providers are handling the Digital Migration at their end (by refusing to provide the FTA channels without monthly subscriptions), a large chunk of informed consumers would prefer to ditch the Pay TV services for Internet TV experience.