AS A junior reporter covering the media sector some years ago, I got an off-the-record sit-down conversation with one of the country’s leading CEOs at the time, giving me the lowdown on what makes a successful player in the space.

What I can still vaguely remember is that a successful media company must have two things: exclusivity and a moneyed audience. It makes no sense playing in a space where everyone and their dog can easily enter.

So regulation is important if one is to turn a profit as a radio station or set up a pay-TV operation. Regulation answers to the need of exclusivity. There are only so many FM radio spots that can be dished out in Johannesburg by the Independent Communications Authority of SA and only so many TV licences.

Walmart is outside India’s door, waiting for policies to change so it can meet whatever conditions and get in first. The hoops South Africa made it jump through were par for the course, as above all it treasures and understands exclusivity.

For a successful media company, after exclusivity, it’s about attracting the right audience and one that advertisers need to reach. This answers to content.

A successful television operator will get the best talent at whatever the cost, the best programming and, most important, sport.

Having managed to tick these boxes, a media company — under good management — has a great business model. This is exactly the environment that the Koos Bekker-led Naspers finds itself in, hence its dominance not only of South Africa’s pay-TV space, but virtually that of the entire African continent.

The lesson I was taught at a coffee table in a Sandton office some years ago came back to me yesterday when I saw that the Cape Town-based company had reached yet another record high.

Driving Naspers to its highs is its exposure to what many consider a recovering Chinese economy this year. Naspers owns 34% of Tencent, China’s largest and most used internet service portal.

The investment in China is much like its position locally. It’s a highly regulated market and one fraught with government obstacles, and it passes the exclusivity test.

Rupert Murdoch, head of probably the most aggressive media empire of all time, has tried for about 20 years to get a place for his beloved News Corporation.

As long as Naspers continues to peruse opportunities in developing markets such as China and in recent times in Turkey — in partnership with locals — the company looks likely to stay ahead of the curve in the exclusivity stakes.

Which makes me think that there’ll have to come a time when someone, and probably an international player, will have to make a play for the company. They’ll just need to get around that complex A-shares structure or wait until management decides to move on.


THE question after the Reserve Bank’s not-so-surprising decision not to cut rates yesterday is: can the bank afford not to cut them if economic conditions worsen in South Africa and globally?

With a rand above the R9/$ mark and expectations of desperate economic conditions in 2013 if the country doesn’t manage to get its export sectors, namely mining and agriculture, running at full capacity, just how much choice will the Bank have in the matter?

There are many risks to another cut and the most damaging is inflation. "For a cut to now occur there needs to be definite evidence of no wage-inflation spiral and an additional growth shock," according to a Nomura note.

"But we still think that the risk of cuts is greater than the market currently thinks."

I haven’t heard any economist officially describe the South African economy as one in a state of stagflation — high inflation and low growth. But if prospects do not improve, with a stronger China and US, we definitely risk developing the same problem that befell Margaret Thatcher’s Britain in the seventies.


IT HAS not been easy being a Bafana Bafana supporter and I have been one since Doctor Khumalo scored our first official goal on that rain-soaked night in Durban in 1992 against Cameroon in the African Nations Cup.

The national team’s glory years were undoubtedly between 1996 and 2002. In that period, we were continental champions and appeared at two World Cups.

Last weekend, I asked for just 90 minutes of that glory and only got some of it this past Wednesday. I prostrate myself again before the football gods and ask for another 90 minutes on Sunday.