Can DStv weather the storm as subscriber numbers drop? 

MultiChoice Africa has been battling with unprecedented criticism over the price and quality of their services.

In a space of less than a year, MultiChoice Uganda has increased the prices of their Gotv and Dstv prices twice as it attempts to cope with unprecedented inflations. The unprecedented price increases have forced individuals to boycott DStv and GOtv services, while some have downgraded their subscriptions.

As inflation in Malawi soars, MultiChoice announced that they will be withdrawing their services from the country with immediate effect. MultiChoice has been embroiled in a long-standing battle with Malawi Communications Regulatory Authority (MACRA) over the former’s incoherent price increases. MACRA recently paused the implementation of DStv’s new prices that were expected to start in August, 2023.

Multichoice enjoys monopoly satellite provision services for Anglophone countries in sub-Saharan Africa. Despite this, their woes are far from over. Quoting MultiChoice’s 2023 Market performance report, Jamie Mighti, a South Africa-based digital marketing expert, attributed MultiChoice’s woes to a significant drop in premium DStv subscribers.

The company had recorded a loss of Rands 2.92bn ($156 million).

He said, “By 2016, premium content subscribers, especially DStv premium and Compact Plus, were the biggest revenue sources for MultiChoice. These subscribers had dropped 37 per cent of the general subscribers in 2016. These premium subscribers further dropped to 33 per cent as of March 2023. This means that the high-end customers, especially people in the middle and upper-classes, are no longer seeing the value of premium DStv subscription.”

GREAT EXODUS

Mighti accused MultiChoice of charging a premium price for budget content. He said DStv became too comfortable with their monopoly status and failed to innovate when the writing was on the wall.

“They still had time to take necessary interventions to fix the problem.”
“The bargaining power of buyers was low when DStv entered the market. They would show buyers any content without any comment from the buyers. When the buyers started paying for the internet and the DStv, they started having buying power. They wanted to get DStv, Netflix, Amazon Prime, etc at favourable prices. All these combined monthly subscriptions would still be better than the DStv premium in the same period,” Mighti said.

He also faulted them for ignoring the threat of substitute products or services on both the formal and informal markets.

“Students didn’t see the value of paying for DStv yet there were alternatives like torrents – pirated movie streaming platforms,” he added.

He noted that the rise of new and cheaper alternatives with better content libraries like Netflix, Amazon Prime and Spotify should have worked as a wake-up call for MultiChoice.

“If you look at the catalogue coming from these establishments which you can get for less than the value of DStv Premium, it shows that DStv is not going to survive as a viable contender in the market.”

Partly, the rise in the influence of social media had also replaced the broadcast monopoly that DStv enjoyed over the lives of Hollywood celebrities broadcast through channels like E!

“Celebrities now run their own social media accounts like Facebook, TikTok, Instagram, etc. These celebrities no longer have to do it on your platform. Viewers can now go directly to those social media platforms and interact with their followers.”

He added that the rise of online music streaming platforms like YouTube, Spotify and the rest had also replaced channels such as Channel O, BET, and MTV Base, which previously enjoyed a monopoly over music.

He added that “these online platforms have killed that business model. The teenagers who used to login into these channels, can now curate their playlists, choose their artistes to follow on YouTube, and have a YouTube Premium subscription for less than 100 rands [five dollars].” He said the only thing still keeping several people to DStv is the sports packages since consumers have found alternatives to watch most of the other channels on YouTube.

“You can watch global news without necessarily having a DStv subscription”.

However, Mighti noted that although the future seems dim for the DStv brand, MultiChoice can recover its market position with Showmax – an over-the-top subscription video on-demand service.

EXPERTS WEIGH IN

However, Morgan Muhindo, a legal tech and compliance consultant at Enset Law, said DStv’s fall is inevitable if MultiChoice does not innovate products to satisfy the needs of a growing tech-savvy middle-class across the continent.

Muhindo noted that although the entry of specialized affordable content providers has revolutionized access to content, the affordability of smartphones and internet bundles cannot be ignored.

He added, “A drop in the prices of smartphones and internet bundles has made streaming very easy. MultiChoice had no control over these factors.”

Muhindo also accused MultiChoice of failing to reinvent and cannibalize themselves to the changing trends and consumer behavior. He said that although Showmax has the ability to make MultiChoice shareholders money, it now has to compete with global streaming giants like Netflix and Amazon Prime, which enjoy economies of scale especially their large numbers of subscribers to their platforms.

“DStv might have to reposition its services to a wider market that falls out of the middle-class. This would mean cutting prices of the premium products. Let consumers pay for what they consume. If I only want to watch football, I shouldn’t pay for other services I am not consuming. Let me watch the football that I am interested in.”

Rinaldi Jamugisa, the public relations and communications manager at MultiChoice Uganda Limited, did not respond to questions shared to his email, by the time we went to press.