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?
Mark Rayner:
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.
