Naspers on Friday (30 November) recorded strong results for the half-year to September 2018, showing a 29% increase in revenue to $11 billion, driven by e-commerce and its stake in Tencent.
The group’s portfolio of companies includes those in the video entertainment space, namely MultiChoice and its DStv service.
Overall, Naspers said that its video-entertainment business delivered solid trading profits and generated meaningful cash flows.
“Subscriber growth was strong in the middle and mass-market segments, with some churn in premium subscribers as a number of households in this segment appear to be experiencing strains on their disposable income,” it said.
“In sub-Saharan Africa, subscriber growth accelerated and the business generated 9% (16%) growth in revenues to $524 million. Trading losses were stable, with a decline in losses measured in local currency.”
Looking at the MultiChoice Group, Naspers said that it added 285,000 South African subscribers in the first half of 2019 – with a total base of 7.2 million households at September 2018.
“The growth trend in the mass-market continued, while the premium tier is under some pressure (linked to macro pressures rather than competitive dynamics),” it said
“This ongoing change in customer mix resulted in monthly South African Average Revenue Per User (ARPU) declining year-on-year from R347 to R335.”
ARPUs are a function of DStv subscription revenues and include PVR Access fees and BoxOffice, but exclude Showmax fees.
A subscription ARPU – which includes Showmax, but excludes reconnection fees and DCC premiums – would be R326 in 1H19 (R339 in 1H18).
“The focus of the SA business remains retaining premium subscribers while driving subscriber growth in the mid and mass-market tiers,” Naspers said.
“Subscriber retention is underpinned by rising PVR penetration uptake of connected video services, and rollout of additional services (e.g. Joox Music launched in October 2018).”