{"id":773666,"date":"2024-05-31T09:30:00","date_gmt":"2024-05-31T07:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=773666"},"modified":"2024-05-31T08:43:30","modified_gmt":"2024-05-31T06:43:30","slug":"south-africans-dump-dstv-as-price-pain-sets-in","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/technology\/773666\/south-africans-dump-dstv-as-price-pain-sets-in\/","title":{"rendered":"South Africans dump DStv as price pain sets in"},"content":{"rendered":"\n

MultiChoice is struggling to hold on to DStv subscribers as years of price increases made the service expensive and uncompetitive in the new streaming market.<\/p>\n\n\n\n

MultiChoice\u2019s results for the six months ended 30 September 2023 revealed a loss of R911 million, a big decline from the R55 million profit over the same period last year.<\/p>\n\n\n\n

One reason for the poor results is that middle-class South Africans continue to ditch DStv in preference for streaming services.<\/p>\n\n\n\n

Over the last year, DStv subscriptions in South Africa declined by 486,000 \u2013 from 9.115 million to 8.629 million.<\/p>\n\n\n\n

What was striking was that the subscriber decrease happened across the board over the last six months.<\/p>\n\n\n\n

Simply put, DStv subscribers in the premium, mid-market, and mass-market segments are all cutting the cord.<\/p>\n\n\n\n

An even bigger concern is that the average revenue per user (ARPU) in all of DStv\u2019s segments is declining.<\/p>\n\n\n\n

That means MultiChoice is losing DStv subscribers and making less money per subscriber. This explains its dismal financial state.<\/p>\n\n\n\n

MultiChoice seemed undeterred by declining subscriber numbers and again increased the price of most DStv bouquets on 1 April 2024.<\/p>\n\n\n\n

The pricing of its DStv satellite pay-TV package increased by between 3.1% and 7.8%. DStv\u2019s streaming-only packages remained unchanged.<\/p>\n\n\n\n

MultiChoice may try to increase the money it makes from its subscribers through these price increases, but this strategy has been failing.<\/p>\n\n\n\n

Despite price increases last year, mass-market ARPU declined by 3%, mid-market by 2%, and premium by 4%.<\/p>\n\n\n\n

This means many DStv subscribers are dumping the more expensive packages or downgrading to cheaper options.<\/p>\n\n\n\n

The reality is that South African consumers are stretched financially and cannot afford more expensive DStv services.<\/p>\n\n\n\n

There is no easy way out for MultiChoice. It faces declining revenue in South Africa, and the expedient way to address this decline is through higher prices.<\/p>\n\n\n\n

Unfortunately, this strategy will fuel MultiChoice\u2019s downward spiral, with more high-end subscribers downgrading or cutting the cord completely.<\/p>\n\n\n\n

Streaming battle in Africa<\/strong><\/h2>\n\n\n\n
\"\"<\/a>
Showmax<\/figcaption><\/figure>\n\n\n\n

MultiChoice is pinning its hopes on Showmax to save it from declining DStv subscribers and bolster its financial performance.<\/p>\n\n\n\n

Showmax 2.0 \u2013 a revamped version of its streaming service \u2013 was launched on 12 February 2024, with prices ranging between R39 and R99 per month.<\/p>\n\n\n\n

MultiChoice is betting on Showmax to compete with Netflix, Disney+, and Amazon Prime Video to become the leading streaming service in Africa.<\/p>\n\n\n\n

Showmax 2.0 was created through a partnership between MultiChoice, Sky, and NBCUniversal\u2019s Peacock. MultiChoice owns 70% of the new service, while NBCUniversal owns 30%.<\/p>\n\n\n\n

MultiChoice and NBCUniversal announced they will invest $177 million (R3.3 billion) in the new Showmax offering during the current financial year.<\/p>\n\n\n\n

This shows how serious MultiChoice is about competing in the streaming market and taking on Netflix in Africa.<\/p>\n\n\n\n

A large chunk of MultiChoice\u2019s focus and resources will go into Showmax, and its satellite service will likely play second fiddle.<\/p>\n\n\n\n

However, DStv is still MultiChoice\u2019s main revenue stream, and Showmax must achieve incredible growth to match it.<\/p>\n\n\n\n

This illustrates how risky MultiChoice\u2019s decision to bet on Showmax is, which has yet to prove that it can be profitable, in preference to its established DStv service.<\/p>\n\n\n\n

It is very difficult and resource-intensive to compete with global entertainment platforms like Netflix, Amazon Prime Video, and Disney+.<\/p>\n\n\n\n

These players have billions of dollars to invest and create great content. MultiChoice does not have equally deep pockets.<\/p>\n\n\n\n

Its only benefits over these platforms are local content and sport. However, to date, MultiChoice has not bundled the full Supersport with Showmax.  <\/p>\n\n\n\n

It remains to be seen whether local content is enough for Showmax to outperform Netflix and other competitors in Africa.<\/p>\n\n\n\n

\n\n\n\n

Read: DStv vs Netflix vs Amazon Prime and more in South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

MultiChoice is struggling to hold on to DStv subscribers as years of price increases made the service expensive and uncompetitive in the new streaming market.<\/p>\n","protected":false},"author":10,"featured_media":716018,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9878],"tags":[78,1253,263,10293],"class_list":["post-773666","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-dstv","tag-multichoice","tag-netflix","tag-showmax"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773666","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=773666"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773666\/revisions"}],"predecessor-version":[{"id":773937,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/773666\/revisions\/773937"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/716018"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=773666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=773666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=773666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}