“We’re not just betting on porn” – StarSat CEO defends his company’s reboot

Going toe-to-toe with MultiChoice, the satellite giant that dominates the South African pay-TV market is no easy task. Just ask the folks at StarSat, the reincarnation of the troubled TopTV which struggled to establish a foothold in the South African market when faced with MultiChoice's dominance. CEO Eddie Mbalo is back, however, and armed with a partnership with China's Star Times and a bouquet of new channels and offerings, he's ready to take the fight to the people behind DStv. One of the key arrows in his quiver is a proposed adult bouquet which will offer various sexy channels like Playboy TV. But, while media attention (much of it on MultiChoice outlets) has focused on the adult offering, Mbalo points out that there's more to the rebooted StarSat than T&A. The company is well-funded thanks to its China connection, and offering over 100 channels in various packages, at a range of price points. Perhaps this means competition at last for South Africa's pay-TV market. – FD

To watch this CNBC Power Lunch video click here

ALEC HOGG:  StarSat is promising an exciting new line-up and technology for its subscribers.  Joining us now about the current plans and innovations is ODM Chief Executive Eddie Mbalo.  Eddie it's really good to talk to you because there are two things that one would like to focus on in this discussion.  The one is, we've had MultiChoice for years, it dominates the South African environment, you guys have had a couple of false starts, but hopefully you're going to be gaining some traction and becoming more competitive.  That's the one side, but the other side looks to the outsider as though you're going to bank on porn to do that: Playboy Plus channel, etcetera.  Your parents and your kids watching…

EDDIE MBALO:  The media gets it so wrong, to even suggest that we are putting our hopes on porn.  The truth is that adult entertainment as we have always said, is just one of the offerings and there's a market for it.  We're responding to what the market needs.

ALEC HOGG:   How big is it?  How big is it going to be in your bouquet?

EDDIE MBALO:  Well, we don't know but what we know, judging by how the internet is going, is that adult entertainment is getting many customers.

ALEC HOGG:   And it can help you, but you don't know how many customers it's going to bring to you.

EDDIE MBALO:  We don't know.  We're just making the offering because we think that there is a market for it. We are however, providing another 100 channels or more than 100 channels and that's what I think will bring us the audiences we need.

GUGULETHU MFUPHI:  The Chinese investors behind your company…naturally, they must be pumping more money into this.

EDDIE MBALO:  Well, we are still in the Business Rescue process.  We have not concluded the deal but yes, as per the Business Rescue plan – I'm sure you've seen it.  They will be investing just in excess of one billion rand.

ALEC HOGG:   Are these media people?

EDDIE MBALO:  Star Times is a media company, a media and technology company.  They already operate in 14 countries around the continent.

ALEC HOGG:   That makes it exciting, because you have Open View etv on the one side, you have yourselves as kind of the underdogs – as you say, you're still in Business Rescue – and you have MultiChoice as well, the big elephant you can eat, one bite at a time.

EDDIE MBALO:  Well, I suppose some of the reports and the emphasis on so-called porn…I just saw Media 24's statement around the report we issued: Eddie Mbalo is proud to bring you…  This brings into question the whole issue of cross media ownership in the way you use one platform to bash the other.  MultiChoice is our competitor and we don't hope that they will sit back and do nothing, but for them to use other platforms and other products that they have to bash us – I think that's a bit unfair.

ALEC HOGG:   Okay, but now we're also on MultiChoice's platform, so we're giving 50/50 as far as that's concerned.  We want you to succeed Eddie.  The whole country wants you to succeed.  These 100 channels that you're bringing in here: are they going to be available free to air or are they going to take a cost?

EDDIE MBALO:  StarSat has a license to operate DTH, which means Satellite Broadcast Pay TV operation.  Even the adults that we are offering – it's not free to air.  I don't know how people get it so wrong.  StarSat is not free to air.  etv and SABC are the only free to air operators.  Even Open View is still operating on a satellite platform.  You have to buy a decoder to be able to access it.

ALEC HOGG:   Is it the same with you?

EDDIE MBALO:  Well, our license is a Pay TV DTH operation, which means that for every channel and every product you consume, you have to pay for it.  We've created different packages.  'Adult' is only one of the packages.  You don't have to buy 'adult' to get Top TV or StarSat, but you can subscribe to different packages within StarSat.

GUGULETHU MFUPHI:  Very quickly, you mentioned the name Top TV.  Can you still use that in conjunction with StarSat or does Top TV no longer exist?

EDDIE MBALO:  No, the operating company is ODM (On Digital Media).  We have rebranded from Top TV into StarSat.