MultiChoice in Africa is struggling with the perception that the DStv satellite pay-TV service is too expensive with DStv subscribers in Africa, outside of South Africa, down as pay-TV households switch to cheaper digital terrestrial television (DTT) offerings due to big local currency devaluations, according to a new report.
According to the 5th edition of the Digital TV Sub-Saharan Africa Forecasts 2016 will be a tough year for pay-TV operators like MultiChoice in Africa.
According to Simon Murray, author of the report for Digital TV Research, DStv appears too expensive given the weakening of Africa's currencies, with pay-TV households switching to cheaper DTT offerings.
MultiChoice in Africa had 2.24 million DStv subscribers outside of South Africa by September 2015 - down from 2.56 million six months earlier and down from 2.36 million a year earlier.
According to Digital TV Research estimates, this 2.24 million DStv subscribers fell to 2.16 million DStv subscribers by the end of 2015 and will fall further in 2016.
"DStv appears more expensive to locals. To try and attract new subscribers, DStv has substantially reduced its decoder prices."
"DStv's problems stem mostly from its rights to exclusive premium content, especially sports. Currency devaluation in most sub-Saharan countries hit DStv hard. Exclusive content rights for premium content such as English Premier League (EPL) soccer are usually paid for in US dollars."
"MultiChoice has been compelled to increase its local currency DStv subscription fees to cover the shortfall due to devaluation."
As a result, DStv appears more expensive to locals. To try and attract new subs, DStv has substantially reduced its decoder prices.”
More African pay-TV households are switching to DTT - up from 18.7% (7.9 million) in 2010 with digital television penetration that is estimated to reach 99.9% in 35 African countries by 2021 and 74.7 million homes.
By the end of 2015 complete digital terrestrial television migration was achieved in Gabon, Kenya, Malawi, Rwanda, Tanzania and Uganda.
By the end of 2016 another 6 African countries are expected to complete its switch from analogue to digital terrestrial television - but not South Africa which is lagging far behind the rest of the African continent with its commercial DTT switch-over process.
According to the research, of the 16.91 million pay-TV subscribers at the end of 2015, 10.66 million were satellite pay-TV subscribers and 5.64 million were pay DTT.
Africa's pay-TV subscriber total will more than double to 33.23 million by 2021, with satellite pay-TV subscribers contributing 15.88 million and pay DTT another 14.85 million.
