\u201cActive subscribers declined from 8.0 million to 7.6 million, while the 90-day active base reduced from 9.3 million to 8.6 million,\u201d MultiChoice said.<\/p>\n\n\n\n
The 400,000 decline in active DStv subscribers is only part of MultiChoice’s concern. The most problematic part is that the decline affected all market segments.<\/p>\n\n\n\n
Over the last year, DStv Premium declined by 8%, DStv mid-market declined by 9%, and DStv mass market by 1%.<\/p>\n\n\n\n
This shows that DStv\u2019s pay-TV growth is behind it. It cannot target any further market segments with its satellite offerings.<\/p>\n\n\n\n
This should not come as a surprise. Globally, there has been a decline in pay-TV subscribers, known as cord-cutting.<\/p>\n\n\n\n
Cable and satellite TV providers have lost over 20 million subscribers in the United States over the last decade, and this trend is accelerating.<\/p>\n\n\n\n
The latest research reveals that there are expected to be 80 million cord-cutting US households in the United States by 2026.<\/p>\n\n\n\n
Young people aged 18 to 29, who have grown up with the Internet and streaming services, are the most prolific cord-cutters.<\/p>\n\n\n\n
Price is the number one reason people cut the cord on their pay-TV service. 87% of people who dumped their subscription cited price as the reason.<\/p>\n\n\n\n
Only 34% of pay-TV subscribers said they are happy with the value they receive from their pay-TV subscription.<\/p>\n\n\n\n
Even more concerning for pay-TV providers is that most people who have moved to streaming services say that they do not miss anything about their pay-TV subscription.<\/p>\n\n\n\n MultiChoice\u2019s South African DStv service is particularly exposed to people leaving the service because of price.<\/p>\n\n\n\n For two decades, South Africans have been complaining about the price of DStv, especially its premium service, which offers sought-after sports content.<\/p>\n\n\n\n However, MultiChoice ignored these concerns and religiously increased the price of its DStv service on 1 April every year.<\/p>\n\n\n\n It had the luxury of increasing prices at will because it enjoyed a monopoly in the pay-TV market. It also had exclusivity on many desirable sporting events, including rugby.<\/p>\n\n\n\n However, things started to change for MultiChoice in 2016 when streaming services like Netflix gained popularity in South Africa.<\/p>\n\n\n\n At the same time, uncapped fibre broadband services gained momentum, with many fibre network operators rolling out access across South Africa.<\/p>\n\n\n\n The combination of affordable, fast, and unlimited broadband with cheap streaming products posed a significant threat to MultiChoice\u2019s DStv service.<\/p>\n\n\n\n During its 2021 presentation to ICASA, MultiChoice said<\/a><\/strong> global streaming video services like Netflix were their biggest competitors and \u201can existential competitive threat.\u201d<\/p>\n\n\n\n It highlighted that over-the-top (OTT) services had already fundamentally disrupted the music industry, eliminating the sale of physical cassettes and CDs.<\/p>\n\n\n\n They said traditional broadcasters, like MultiChoice, are now facing a similar existential threat to their businesses.<\/p>\n\n\n\n \u201cThese global OTT services and large, well-resourced domestic telecommunications companies are completely disrupting traditional TV, particularly Pay TV, in South Africa,\u201d it said.<\/p>\n\n\n\n This scenario is now playing out in South Africa, and MultiChoice does not seem to have any way to stem the decline.<\/p>\n\n\n\n MultiChoice is now looking for alternative revenue streams to compensate for its DStv subscriber growth.<\/p>\n\n\n\n Its new strategy includes its own streaming service, Showmax, online sports betting, and becoming a one-stop-shop for bundled streaming services.<\/p>\n\n\n\n However, it does not have a significant competitive edge in most of these markets, so success is far from guaranteed.<\/p>\n\n\n\n Telkom, for example, is building a content-aggregating platform on which users can subscribe to a bundle of streaming services.<\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/02\/MultiChoice-1024x576.jpg\")
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