TopTV luring some cancelled subscribers back through its new prepaid voucher service; quarter of active subscribers switch to prepaid.

On Digital Media (ODM) running the TopTV pay-TV service which is currently in business rescue has  managed to lure some cancelled subscribers back through the introduction of its prepaid voucher system the struggling pay-TV operator introduced in August.

TopTV which has been battling massive churn - subscribers signing up to the pay-TV service, only to cancel because they don't like the service and/or offering - introduced the voucher programme in August whereby subscribers can pay for a month's access on a prepaid basis.

This was a business strategy formulated to try and recoup some of the 250 000 lost TopTV subscribers out of the 400 000 TopTV decoders which ODM installed, fully subsidised. With only 150 000 active paying subscribers each month, TopTV decided to target this 250 000 former subscribers who have TopTV decoders and satellite dishes first.

Since August, 65% of the subscribers TopTV regained are activations by customers whose subscription had either lapsed or who have been disconnected, says TopTV.

"Some interesting stats are emerging regarding who our prepaid customers are, and their TopTV subscription history. Of the current activations, 26% are new, first-time subscribers who have signed up to the service within the past three months, since prepaid was launched.  Another 26% originally subscribed to the service when TopTV launched in May 2010," says Kgomotso Lekola, the interim chief operating officer (COO) of TopTV.

Interestingly, almost another quarter - 23% - of TopTV current active subscribers who were previously paying through debit order, EasyPay or cash, have now switched to the prepaid system. TopTV have twice damaged subscriber trust by running double debit orders - once in 2011 and once in 2012.

TopTV says the operator is successful in luring lapsed subscribers back to TopTV. According to the company 700 000 vouchers has been sold to retail partners with 500 prepaid vouchers being activated daily "in recent weeks". "The majority of national retailers will only start selling the vouchers in late November ... it is clear that the best is yet to come," says Eddie Mbalo, the interim CEO of TopTV, in a statement issued Friday afternoon.

"We pride ourselves on being a market disruptor," says Eddie Mbalo, saying that the prepaid voucher system is "already making a significant impact in promoting access to pay-TV for South Africans".

"We are able to grow the business without increasing the administrative burden - that's important because it allows us to contain costs. We believe that we have now found the right business model: one based on flexibility and that understands the current realities of doing business in South Africa."

"We are satisfied with the way in which the concept for pay-TV has taken off and is performing in our market. As an innovator in the pay-TV segment of the industry, TopTV is cognisant of its subscribers' needs and what works for them," says the company.

TopTV introduces a prepaid voucher system as the pay-TV operator seeks to reclaim lost subscribers and lure new ones.

On Digital Media (ODM) which operates the TopTV pay-TV platform in South Africa today officially launched its TopTV prepaid voucher system, hoping to recapture a lot of the disconnected TopTV decoders under the 400 000 the pay TV platform had installed since it launched just over 2 years ago - as well as to win new subscribers in its target market.

TopTV which held a press launch - its first major press day offensive since its official launch day two years ago besides a quarterly preview screening in Johannesburg and Cape Town earlier this year - saw TopTV executives and staff cheerful and out in full force.

At a cinema at the Maponya Mall in Soweto, TopTV executives did a launch presentation, followed by a demonstration of the prepaid system as well as an extensive Q&A session, after which the press launch moved to the adjacent The Tavern restaurant.

Led by the interim CEO Eddie Mbalo, decidedly much more open to engage with the press than his predecessor Vino Govender and willing to patiently answer journalists' questions in one-on-one interviews, TopTV explained that it will now be using Pep Stores and Blue Label (the largest distributor of prepaid cellphone airtime in South Africa) as retail distributors.

"Now you can buy your TV like you buy your electricity," said Eddie Mbalo who said that TopTV is "reconfiguring the model for pay-TV" by introducing the TopTV prepaid voucher system as a South African first.

The TopTV prepaid voucher system was delayed by over a month due to retail issues, but the first vouchers were already sold this past Monday.

TopTV wants to get Spar as well as South Africa's four biggest commercial banks on board as well as TopTV renews its effort to grow its subscriber base by capturing the unbanked market, those who don't want pay-TV contract accounts because of the lack of money to make monthly debit orders feasible, and recapturing the massive number of deactivated former TopTV subscribers who already have TopTV decoders but who are not using them.

TopTV said the pay-TV operator is focusing strongly on subscribers and potential subscribers living outside of main urban centres and television viewers in the lower income bracket. Subscribers can use their cellphones - or even someone else's cellphone - to input and activate a voucher and their TopTV decoder since the decoder's smart card number is keyed into a cellphone with the voucher number.

TopTV prepaid vouchers will from today be available at 6 000 retail outlets countrywide; TopTV plans to increase it to 100 000. "We have in the region of 400 000 TopTV decoder boxes out there," said Eddie Mbalo, "and in many instances people can't pay month to month or don't have money in their bank account when the debit order is activated. We want to reactivate those customers."

TopTV prepaid vouchers are available in two "denominations": R109 for a 30-day period for the Variety package, and R279 for a 30-day period for the Ultimate package. The Ultimate package has 62 channels. These two packages are the lowest (cheapest) and highest (most expensive) two bouquets TopTV offer out of its tiered channels' offering. TopTV said 80% of its existing active subscriber base on contract are on one of these two packages and that the company therefore decided to start of by offering these two on a prepaid basis.

The two types of vouchers each cost R10 than what normal contract subscribers pay since TopTV has to include an administration and distribution fee to pay resellers who offering the vouchers on their behalf. A bought voucher must be used within a period of 3 years. TopTV prepaid customers will get a SMS reminder 5 days before their 30-day package is due to expire so they can buy a new voucher. They will get a second SMS reminder 5 days after their 30-day package has expired.

There's no reconnection fee between recharges and no hidden costs. Recharge instructions are simple and a help menu is clear and has several options. TopTV said the TopTV prepaid voucher system also frees subscribers from calling the call centre (although they still can). "Many subscribers and ordinary consumers simply don't have the money to be on the line with a call centre," said Eddie Mbalo.

TopTV prepaid subscribers can upgrade from the Variety package to the Ultimate package anytime and will get an automatic subscription days' remaining extension. Subscribers can also downgrade from Ultimate to Variety, although only at the end of the current 30-day period.

TopTV also hopes that it will alleviate pressure on the TopTV call centre, but said TopTV isn't downsizing or doing away with its call centre. "It's merely another option."

"We're taking our position as a market disruptor very seriously and we will be introducing a number of market firsts besides the TopTV prepaid voucher system in the next few upcoming months as South Africa's 2nd pay-TV player," said Eddie Mbalo.

"The vast majority of South Africans live far away from banks and urban centres," said Kgomotso Lekola, TopTV's chief operating officer (COO). "So if TopTV wants to enter into transactions with them, we wil have to make it easy, hence the prepaid model."

Eddie Mbalo said TopTV has been looking at its entire pay-TV business, operational model and management and that it has implemented a turnaround strategy which is currently being carried out. "The first major part is making TopTV accessible to TopTV subscribers. We conducted focus groups and questionnaires and we took a serious look at what is the content that our subscribers want and are looking for, and we're working on new content strategies to serve our subscribers' needs."