Monday, November 16, 2020

MultiChoice: Here's the 4 reasons why the new DStv Explora Ultra decoder that comes with built-in Netflix access is so expensive at R2499.

by Thinus Ferreira

When it goes on sale this week, MultiChoice's latest DStv Explora Ultra decoder that comes with the eye-watering recommended retail price of R2 499 is incredibly expensive and has caused instant sticker-shock for existing DStv subscribers who had thoughts of wanting to upgrade their decoders immediately.

The DStv Explora Ultra that costs R3 699 when it includes installation, will make wallets much flatter than the DStv Explora 3 that can be bought for R999 (or around R 1499 including installation).

The DStv Explora Ultra will be MultiChoice's first decoder that will give DStv subscribers access to Netflix South Africa and likely very soon also Amazon Prime Video. 

Other international video streaming services like Disney+, HBO Max, Paramouont+ and others will be added in future to the DStv Explora Ultra's carousel menu of over-the-top (OTT) services. 

But why such an expensive price for a decoder? Doesn't MultiChoice want customers to upgrade to better technology and more possible services where the pay-TV operator can then increase what in the biz is known as the average revenue per user (ARPU)?

Calvo Mawela, MultiChoice CEO, on Friday during the company's investors' call for its financial results for the 6 months until the end of September 2020 gave 4 reasons for the hefty price tag of the DStv Explora Ultra.

"If you look at it as a set-top box and considers that it does traditional linear TV, it does Catch Up, it does all of the other elements that we used to have in the previous DStv Explora; we have increased the memory, we have built-in Wifi and then we are able to add streaming apps as and when we have agreements with other subscription video-on-demand (SVOD) players coming into the market - that is the basis on which it is priced at that level," he said.  

"The other thing we have decided to do with the DStv Explora Ultra decoder is not to introduce any subsidies as yet, and that is why you see the pricing, if you compare with others, it's a little bit out of sync with what you have seen in the past."   

Tim Jacobs, MultiChoice chief financial officer (CFO), said that the DStv Explora Ultra decoder is "really targeted at early-adopters and we think that the initial target market is the guys that want to experiment a little bit".

"But like all of our products, we'll start and then we'll look at the market demand and then make judgement calls about whether to introduce pricing differentials [subsidies] later. It's a good starting point to simply introduce the DStv Explora Ultra into the market," he said.