DStv May Have To Slice The Price On Subscription Fees

International data shows that satellite TV services are on their deathbeds. With the rise of streaming services, how will South Africa's DStv survive the Netflix onslaught?
Jason Snyman
2018-10-31


With the rise of affordable streaming services such as Netflix in South Africa, DStv has finally had the monopoly ripped away from it. Parent company, MultiChoice, has openly admitted that DStv is struggling against the streaming giants – and the numbers are there to prove it.

Since the official launch of Netflix in South Africa, back in January 2016, there has been a steady decrease in the number of DStv Premium subscribers.

Earlier in October 2018, MultiChoice also announced that it would be shutting down the DStv Mobile service at the end of October – opting to focus on the internet streaming-based DStv Now instead. This probably should have been done a long time ago, but at least it looks as if MultiChoice is finally starting to come around to what viewers really want.

Arguably, the biggest obstacle DStv still faces is with regards to pricing, where Netflix is giving them an absolute hiding. A DStv Premium package currently costs R959 per month on a 24-month contract, and that’s excluding the annual TV Licence fee or the DSTV installation fee.

Netflix is only R165 per month on a month-to-month basis with no installation fees. All you need is a decent internet connection, and with Fibre on the rise, this is perfectly affordable.

As it currently stands, and if international trends are anything to go by, MultiChoice will have to cut prices, cut their losses and reinvent DStv come 2019 – or continue to nosedive.
 

Why Is DStv Bombing Out?

As recently reported by My Broadband, international satellite and cable TV subscriptions (the equivalent to our DStv Premium) have seen a plummet in subscribers all across the world. The costs of these services continue to rise, and cash-strapped viewers are opting out in a hurry, in favour of cheaper, high-quality streaming services such as Netflix, Hulu or Amazon Prime.

While these streaming services already offer a giant catalogue of viewing content, they don’t offer quality sports packages such as Supersport – and that may be DStv’s only saving grace at the moment.

But, it can be argued that even Supersport doesn’t justify forking out almost a grand per month on television, and if DStv does eventually fall, another streaming service will undoubtedly capitalise on the sudden hole in the market.

How does R199 p/m for a Supersport-only streaming service sound? We can dream.
 

It stands to reason that DStv will inevitably go the way of other big cable and satellite TV players, and continue to haemorrhage thousands of subscribers a month until it eventually collapses. In its current shape and form, DStv simply cannot compete with Netflix.

The streaming service recently stated that it had signed up 6.96 million customers in the third quarter of 2018 alone – with a global total of 137.1 million subscribers.

Now take into account that a single Netflix subscription also allows you to create up to five profiles – which you can share with those four other people at no extra cost. This means that though Netflix has 137.1 million subscribers, the number of users is likely closer to triple or quadruple that number.
 

MultiChoice’s Big Plan

What many people don’t know is that Netflix actually recently changed the pricing of their subscription from US Dollar-based to Rand-based in order to soften the blow for South Africans, thanks to our Rand’s pathetic and erratic showing against the Dollar. Nice guy Netflix.

Meanwhile, MultiChoice inexplicably continues to hike the prices on its DStv subscriptions while bombarding viewers with advertisements and endless, stale reruns.
 

Though MultiChoice is undoubtedly one of South Africa’s favourite whipping donkeys, we have to be fair. The company has launched DStv Now, which allows users to stream their DStv package channels via smartphone apps or a web browser, and the quality is surprisingly decent.

Unfortunately, you still need a DStv satellite package in order to use this.

MutiChoice also launched a streaming service of its own, Showmax, and implemented Box Office for movies and Catch-Up video on demand services, but it hasn’t been enough to hold back the Netflix tsunami. The only way to survive is to adapt, and the company certainly is trying.

MultiChoice has stated that it is planning on launching a streaming-only DStv subscription that will not be tethered to a dish or decoder the way DStv Now is. This will only be launched after the arrival of the Connected Video unit.

My Broadband reported that, according to a 2018 survey, most viewers are only willing to pay between R100 to R300 p/m for a DStv Premium streaming service. So, if MultiChoice is planning on being around for the future, it will have to get the pricing just right.