DSTV has held uncontested monopoly over South Africa’s paid TV market for many years.
Alternative services have materialised in recent years, but none with the features to rival DSTV. Enter, Netflix, an online streaming service that has finally given DSTV some much-needed competition.
DSTV’s revenue has suffered immensely following the introduction of Netflix in South Africa in 2016, and it’s easy to see why. In fact, DSTV management have even gone so far as to complain that Netflix now has an unfair advantage and should be regulated. Shame. Sounds like poor loser syndrome to us.
A lack of competition has allowed the broadcast service to retain high prices for their TV packages over the years. To gain access to all the channels and services DSTV has to offer, one must be subscribed to their Premium package, which goes for a whopping R959 a month!
Let’s take a closer look.
For a long time, the internet had limited availability in South Africa, making it easy for DSTV to monopolise the market as the best-paid TV service.
In recent years, however, internet penetration has increased dramatically throughout the country, spurning the creation of the newer services. With the current Fibre-to-the-Home campaign well underway, South Africa is well on its own way to becoming the ideal market for Netflix, which is most effective through a fast internet connection.
In the last two and a half years alone, and thanks to the rapid jumps in advancement of the state of internet, Netflix has landed themselves an estimated 200,000 to 300,00 customers.
DSTV, on the other hand, have reportedly lost around 100,000 customers in the last year!
In light of the perks that come with Netflix, DSTV will struggle in the age of the internet to remain relevant and competitive, despite its big trump card: the sports channels.
Where do we start? With the lack of options, choices and repetitive content, switching on TV today has become surprisingly similar to at least three years ago!
For most South Africans, paying such a high price for dreary, limited options is simply not an option anymore in the current economy. They have repeatedly tried to hook customers back with special offers that turn out not to be so special after all!
Only the higher value packages allow subscribers access to MultiChoice’s BoxOffice service, which offers the ability to rent movies online movies online for 48 hours, through the decoder.
DSTV’s biggest draw will undeniably be its multiple sports channels, which broadcast live sports matches to its many subscribers. Additionally, DSTV owns full rights to the popular SuperSport channels, and its content cannot be broadcast elsewhere.
Sports are a huge incentive to remain a DSTV subscriber despite better online streaming options. DSTV subscriptions are easily down-gradable, however, and it will be interesting to see if consumers remain loyal to the broadcast company, or downgrade to the lowest package for sport channels before taking out a Netflix subscription.
At R165 a month with no additional fees, Netflix has removed its geo-blocking system, allowing all its operating countries access to the same content. With no schedule or ad breaks, Netflix gives subscribers access to thousands of hours with of content.
DSTV may have a sports option, but Netflix is set to pull popular series off DSTV. Successful series, such as Orange is the New Black and House of Cards, have signed off their rights to Netflix, and they will be removed from the DSTV broadcast once Netflix enters the South African market.
This will be a huge blow to DSTV.
The monthly rate for DSTV is currently R959 a month, which is R11, 508 a year. Add on top of that, your South African TV licence fees, hardware installation and if you want, R35 per movie from BoxOffice.
Netflix, on the other hand, is a mere R165 per month and only requires a stable internet connection.
A minimum 3Mbps connection is recommended for watching standard quality videos, and 5Mbps for high definition videos. A 10Mbps line, across various providers, will cost you around R700 per month.
Here is a better breakdown.
Regardless of its hold on the sport market, DSTV will have to consider dropping monthly rates and restructuring its broadcast content in order to remain a major paid TV player in South Africa.
But we won’t hold our breath on this, as the stubborn giant looks like they will continue to remain.