MultiChoice announced its annual price increase for 2016 for its DStv satellite pay-TV service that will come into effect from 1 April this year.
I asked Mark Rayner, chief operating officer (COO) of MultiChoice these questions regarding the price increase that was announced on Tuesday.
Mark Rayner answered all of the questions to give context to MultiChoice's latest price increase for DStv:
TVwithThinus: A price increase is always a sensitive issue for any consumer oriented business which DStv falls under. Annually, the number of people who have DStv in South Africa grow year-on-year irrespective of subscription increases.
Although DStv is seen as a luxury service, it seems as if in South Africa, although it falls under discretionary spending, millions of TV households feel that DStv is an absolute necessity they can't bear to be without.
We don't see the American phenomenon of so-called "cord-cutting"? What do you think it says that even though DStv prices increase, people keep and more people sign up for DStv?
Mark Rayner: We're extremely thankful that our customers feel so passionate about our products. We totally understand that price adjustments is a sensitive issue and directly impacts our customers pockets.
We believe we provide great entertainment for the whole family at affordable prices. We work hard to constantly enhance the viewing experience on our service by introducing new technologies such as Explora, which has changed the way our customers experience our content.
We believe our entertainment offering compares favourably with other entertainment options and have put together different DStv packages to suit different lifestyles and pockets. We've done a lot of research into what pay TV costs in other parts of the world, and we believe that DStv is still one of the most affordable services you can get.
MultiChoice has started to drop certain content for instance sport like the Bundesliga. Has this been done to manage content costs and what does it signal for the future? A lot of DStv subscribers are used to DStv "having everything".
Is there going to be more content omissions in future, meaning things that DStv might deliberately not acquire, to manage content costs?
Mark Rayner: Our content buying decisions are always driven by viewers' choice. We do a lot of research into ascertaining what our customers watch, as well as what they'd like to watch. If a show's not wildly popular it makes sense for us drop that and rather use this money for programmes that will benefit a wider audience.
We will, as always, work closely with our content partners to make sure you get the most engaging entertainment for your money.
DStv EasyView is becoming cheaper and DStv Access remains unchanged. How is this possible? Are other DStv packages subsidising these, or are the available content and channels reduced? Why are these not increasing?
Mark Rayner: When we review our fees, we look at each package individually and then decide on the price adjustment based on what content is included, as well as the cost of the specific package. For example, the DStv EasyView package has very little international content, which means we can offer this package at last year's price.
We charge customers on each package the fair value price for the channels they're getting.
Some channels are premium channels and carry exclusive, first-run content which is very expensive, and are therefore only included on our more expensive packages. Certain customers don’t subsidise other customers.
Why are the various DStv packages not all increasing by the same percentage? DStv Family is for instance increasing by 10% for 2016. DStv Premium and DStv Compact are increasing by over 8%, while DStv Extra is 8%.
Why is there different percentage increases, is it because different packages include different types of content that have different acquisition pricing and structures?
Mark Rayner: As explained above, we look at individual packages (and their content and costs) when we review our fees.
The product gap between DStv Access and DStv Family, as well as between DStv Extra and the top DStv Premium is widening for instance. Is MultiChoice perhaps considering adding more packages or do you see the existing spread of packages as working for all the various consumer price points?
No, we're not looking to add more packages. We feel that the current six packages give our customers a lot of choice and options (in terms of content and price). There's really something for everyone – regardless of the size of their budget and their viewing tastes.
What is there that you perhaps want to emphasise or explain to existing DStv subscribers and potential pay-TV customers about what MultiChoice offers and within the context of the 2016 price increase?
Mark Rayner: I need to emphasise that we take our responsibility to our customers seriously.
Their support is what keeps us going and in turn, our commitment to them is to keep delivering scintillating entertainment and cutting-edge, innovative products and services.For next year, we're looking to do more of the same – only bigger and better, with a continual focus on our customer experience.