Thursday, February 18, 2021

Greedy MultiChoice 'doesn't get it' that DStv has become too expensive says independent analyst.

by Thinus Ferreira

A greedy MultiChoice "doesn't get it" that the prices and incredible price hikes of the pay-TV operator's DStv and GOtv services have become too expensive for consumers.

So says the Chris Gilmour, an independent analyst during an interview this week on Stock Watch on Business Day TV (DStv 412), answering viewers' questions like MultiChoice's ongoing price hikes.

MultiChoice confirmed its annual DStv price hike for 2021 last week. 

After Simon Camerer, MultiChoice Group chief operating officer (COO), said that MultiChoice is doing 2021 price increases below inflation and that "on a weighted average basis, you're looking at a 2.4% increase", it has also come to light that DStv's most loyal subscribers - legacy M-Net subscribers  - are getting a massive 11.49% price hike from April 2021 - far larger than inflation.

While more and more global and local subscription video-on-demand (SVOD) services like Netflix SA, Amazon Prime Video, and Apple TV+ are taking an ever-growing bite out of the discretionary spending that consumers are channelling to video services, MultiChoice that also has its own Showmax streaming service, keeps raising DStv prices.

This had led to ongoing declines in especially the percentage of MultiChoice's DStv Premium subscribers who no longer see the expensive price of this top-tier bouquet as offering enough value as they switch to the internet and alternatives like Netflix.

Chris Gilmour says that MultiChoice is "frankly a rapacious bunch and their price increases are just incredible and until very recently they were getting away with it".

"They don't seem to quite get it. At the end of the day there's a price for everything but as the old expression goes, 'When the ducks are quacking you've got to feed them and I think they'll be quacking for a wee while yet".

About MultiChoice's new partnership with streamers of which Netflix and Amazon Prime Video have already been added and made available through MultiChoice's latest DStv Explora Ultra decoder, Chris Gilmour says "I'd be very surprised if that works out in the longer term".

He says MultiChoice has "done a few good innovative things and they have to keep on innovating because at the end of the day it's content that is king".

Joseph Buscher from JM Boucher Investments said that "MultiChoice had a captive market in Africa, they had the boxes in most homes".

"When they brought in Big Brother and soccer certainly it has taken them into the rest of the continent. I think that Netflix and some of the online services are going to bring a lot of price pressure in terms of margins."

"If they tie up [SVOD players], they will be able to increase a little bit of their margins. With 5G and broadband going into homes MultiChoice must be very, very innovative".

Last week TVwithThinus also asked MultiChoice, and again this week, if it is possible to talk to Simon Camerer about DStv's latest price increases after he did interviews with three media outlets about the latest round of DStv price increases.

Benedict Maaga on Monday said that Simon Camerer is unfortunately not available at this time for an interview.