More South Africans are ditching DStv Premium

The MultiChoice Group (MCG) has released its financial results for the period ended 30 September 2020, showing that the coronavirus lockdown and a lack of live sports has had a direct impact on its subscriber mix.

The group reported a 41% increase in core headline earnings compared to the prior period at R2.7 billion, with the strong growth attributable to a 38% improvement in organic trading profit and lower net realised foreign exchange losses.

The trading profit impact of Covid-19 was largely neutral, as a R0.9 billion revenue loss relating to lower advertising income and subscription revenues from commercial customers was offset by R0.8 billion in delayed content costs.

“Despite operating in a challenging environment and being affected by lockdowns, production stoppages and disruptions to live sport, we delivered on all key metrics,” said Calvo Mawela, MCG chief executive officer.

“A strong focus on cost reduction allowed for a further R1 billion in cost savings during the period. We also narrowed the losses in the Rest of Africa by 59% year-on-year (or R0.5 billion) to R338 million.”

South Africa

MultiChoice said that its South African business delivered solid results despite the tough climate, delivering subscriber growth of 7% YoY – or 0.5 million subscribers on a 90-day active basis.

The impact of Covid-19 and the associated lockdown saw consumers prioritise video services, but a lack of live sport and the inability of commercial subscribers to trade, negatively impacted revenue generation, the group said.

Revenue declined 3% to R16.5 billion due to lower advertising (R0.6 billion) and commercial subscriber revenues (R0.3 billion).

Excluding the YoY movements on the above revenue categories which were impacted by Covid-19, revenue growth would have been positive as healthy subscriber growth in the mass market and the annual price increases were negated by a lower average Premium subscriber base in the absence of live sport.

“The ongoing shift in subscriber mix towards the mass market, combined with the impact on Premium and commercial subscribers as mentioned, resulted in the monthly average revenue per user (ARPU) declining 5% from R292 to R278.

The group calculates ARPU by dividing average monthly subscription fee revenue for the period.

The subscription fee revenue includes BoxOffice rental income but excludes decoder insurance premiums and reconnection fees.

MultiChoice said that trading profit increased by 12% to R5.8 billion.

This higher profitability can be attributed to a doubling down on the group’s cost optimisation programme, the non-recurrence of three major sporting events expensed in the comparative prior period, lower operational costs in a Covid-19 environment and a temporary shift in content costs as a result of delays in sporting events, it said.

“SuperSport had to contend with no live sport for most of the first half of FY2021 and nimbly adapted by changing channel line-ups, broadcasting top-quality documentaries and showcasing blockbuster sporting movies to keep subscribers entertained,” it said.

Despite the decrease in popularity of DStv Premium, MultiChoice said that connected video users on the DStv Now and Showmax platforms continue to grow as online consumption increases.

During the reporting period Showmax launched Showmax Pro, the group’s first standalone online sport offering. Showmax Pro allows subscribers to watch their series, movies, kids and sport content across several devices, while also offering a mobile option at a lower price point.

The group has also launched Netflix on its latest decoder, and will be adding another major international subscription video on demand (SVOD) service soon, it said.

Read: DStv launches new decoder with Netflix integration

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More South Africans are ditching DStv Premium