South African satellite pay-TV operator TopTV is actively seeking an equity partner to complete its turnaround process and has launched three locally produced programmes.
Says interim CEO Eddie Mbalo: “Since the start of the turnaround programme, the bottom line has improved and some limited funding has been sourced and injected into the business. This is the strongest position the company has been in since inception. However, the business has always required a significant cash injection to recapitalise it in order to complete the turnaround and take the business to the next level of competitiveness. South African companies in this space have generally taken between three and four years to make a profit and with far less regulatory and statutory restrictions imposed on them.’
According to Mbalo, the best source of such a cash injection would be a current industry player. “Such a partner would also be in a position to assist with other required strategic resources that would take time for TopTV to accumulate. Due to the competitive landscape locally and the legislative requirements that allow a foreign entity only a 20% share in ownership, the process of finding an appropriate partner has proved challenging for the start-up business.’
Good progress notwithstanding, and as part of the turnaround process and good corporate governance, the board of directors of On Digital Media, the holding company of pay-TV operator TopTV, regularly assesses whether the company is in a position to meet its current obligations and those due within the next six months.
Based on this ongoing assessment and precipitated by the difficulty in finding an appropriate partner, the board has prudently opted to adopt the provisions of business rescue as per the new Companies Act (under Section 129). This will provide a protective bubble around the company and buy it some time to complete the search for a strategic equity partner. The company will continue to function as normal, and will continue with its plans to launch a number of exciting initiatives in the lead-up to the festive season.
“It is still very much business as usual at TopTV. While we are taking precautionary measures and being prudent with our current cash reserves, the board has taken this decision to ensure the long-term sustainability and growth of the company,’ comments Mbalo.
“TopTV has already made its mark in this space by providing healthy competition within the industry and giving consumers an alternative pay-TV experience. We further believe that this decision will cement our commitment to transparent business practices while we continue our battle on what we hope will become a more transformed landscape and a level playing field.
“Top TV is a bold and innovative company, and this is how we run our business. The recent successful launch of the prepaid product as part of our ubiquitous payment platform was a first for pay-TV in the country, and is having a significant impact in promoting access to pay-TV for South Africans. Based on this success, we are in the process of launching a number of exciting complementary products,’ continues Mbalo.
The broadcaster is currently in the throes of launching three original, locally-produced programmes to boost the content on its flagship channel, Top One. From current affairs and real issues that affect all South Africans today, to music and entertainment, and with a reality daily soap based in a recording studio added to the mix, the pay-TV operator is confident that this content will resonate with both its current and potential viewers.
While access to mainstream sports content remains uncompetitive, TopTV is adding a new dedicated sports action channel, the first of its kind in Africa, to its platform in the first week of November.
And, another first for TopTV is the exclusive screening of the third season of the worldwide phenomenon, The Walking Dead, on the popular FX channel. Based on the monthly black-and-white comic book series written by creator Robert Kirkman, The Walking Dead follows a gang of lost souls trying to survive day-to-day life in a post-apocalyptic America, overrun with the living dead. When the first episode of this season was screened in the USA, just two days before its South African premiere on TopTV, it broke the ratings records for the AMC network with nearly 11-million viewers, and is viewed as the hottest TV series for the coveted 18-49 age group in the States. The FX channel on TopTV is screening a second brand new series, “Copper’, concurrently with its worldwide release, ensuring that subscribers have access to some of the hottest series coming out of America, first and exclusive to TopTV.
