by Thinus Ferreira
When a premium DStv subscriber switches to video streaming services like Netflix and Amazon Prime, 8 out of 10 subscribers decide to keep their DStv subscription as well although they might downgrade to a lower package MultiChoice's new market research has found, with the lack of live rugby broadcasts that is one of the biggest reasons why the DStv Premium subscriber base keeps shrinking.
On Thursday last week MultiChoice released the results for its financial year ending 31 March 2021, with the report that notes that another 100 000 premium DStv subscribers - DStv Premium and DStv Compact Plus - have abandoned its top-end offering that they no longer see as offering enough value for money.
Although MultiChoice's overall pay-TV subscriber base grew thanks to an increase in its mass-market segment, its top-end customer segment in South Africa saw further erosion from 1.5 million to 1.4 million DStv subscribers - representing another 8% decrease in an ongoing decline in its most valuable subscribers.
The result is that MultiChoice's average revenue per user (ARPU) continues to decline for its customer base that brings in the most money, with the monthly ARPU of premium DStv customers that slid further from R588 to R580.
MultiChoice now has 20.9 million active subscribers of which 8.93 million (43%) are in South Africa - that remains the pay-TV operator's country with the largest subscriber base - and with 11.93 million (57%) combined in the rest of Africa (RoA).
"In terms of DStv Premium subscribers what we have seen is that we have customers who come down to the lower bouquets but at the same time we have customers who move on to the online platforms," Calvo Mawela, MultiChoice Group CEO, said on Friday in the pay-TV operator's bi-annual investors' call.
"Those DStv subscribers who move on to the over-the-top (OTT) platforms - what our research has given us - is that 8 out of 10 of those that move on to the likes of Netflix and Amazon Prime Video also remain on the DStv platform, which means that they stay in the lower bouquets."
Calvo Mawela noted that rugby broadcasts are one of the biggest drivers of DStv Premium uptake and that the loss of rugby because of the Covid-19 coronavirus pandemic is a very big reason behind the ongoing decline in its top-end subscribers.
"What we've seen is that as a result of the lack of rugby, you see people coming down, but as soon as rugby comes back, you see people going up."
"Because this past year has been a very difficult year for rugby - that's why we are seeing a significant number of DStv subscribers who have downgraded from DStv Premium as compared to the previous year."
