DStv’s Premium subscriber base has been in steady decline since way back in 2015, and while parent company MultiChoice’s shares have soared in recent months, the downward trend in subscribers has continued.
Annual results released at the end of March 2019 reveal a significant decline in DStv Premium subscribers, and MultiChoice has blamed it on stiff competition (Netflix) and a difficult economy.
The DStv Premium price freeze of 2019 did little to prevent clients from cancelling their service, who have been paying around R809 per month, and an extra R95 per month for use of the PVR function.
Many South Africans have realised the financial and value benefits of cancelling their DStv subscriptions in favour of an uncapped internet connection and a subscription with Netflix. Switching to the latter has proven way more affordable, way more enjoyable and offering far greater value.
Uncapped fibre, ADSL or LTE packages, for example, are now widely available all over the country, with the cost of an uncapped 10Mbps line coming in at below R650, and a Netflix Premium subscription costing only R169 per month.
Many households already have uncapped internet connections, whether for work or entertainment (or simply to cut down on hefty phone data bills), and adding Netflix to the mix would provide far greater value than hanging onto that DStv account.
So, DStv is in trouble, and ICASA is all but ready to rip the SuperSport monopoly away from them, and how will they fix this terrible mess?
According to MultiChoice CFO, Tim Jacobs, the answer is simple:
Increase the price of DStv Premium subscriptions.
Speaking to Techcentral about the company’s plans with DStv Premium, MultiChoice stated that if any improvement is seen in the South African economy, and people receive significant salary increases, an increase in the price of DStv Premium would be possible.
We finally earn more, and so they charge more, basically.
MultiChoice has certainly increased its overall subscriber base across Africa this year, gaining 1.6 million clients (bringing it up to 15.1 million), but as previously stated, Premium subscribers have declined, and therefore so has average revenue per user.
Even though Jacobs himself admitted that the affordability of DStv Premium is one of the biggest causes behind accelerated cancellations, this doesn’t seem to faze the company all that much.
Jacobs said that if they “see resurgence in the South African economy, the opportunity to start increasing prices again is back on the table”.
With the only exception of the 2019 price freeze (in a frantic, but doomed bid to stem the tide of cancellations) DStv has increased the price of its Premium package every single year, without fail. Back in 2000, we were paying just under R306 per month.
Those were the days.
In such a sluggish, uncertain economy, consumers have found themselves under immense amounts of pressure – paying more for anything from food, to fuel, to data, to clothing, to you name it.
With competitors like Netflix breathing down their necks with far better prices and a greater selection of viewing, it would just be plain silly of DStv to up and increase the price on an already struggling product.
But, hey, gotta milk that SuperSport cow dry while they’ve got it, right?
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