MultiChoice gives context about the price increase for 2016: 'We charge customers on each DStv package the fair value for the channels they're getting'.

MultiChoice announced its annual price increase for 2016 for its DStv satellite pay-TV service that will come into effect from 1 April this year.

I asked Mark Rayner, chief operating officer (COO) of MultiChoice these questions regarding the price increase that was announced on Tuesday.

Mark Rayner answered all of the questions to give context to MultiChoice's latest price increase for DStv:

TVwithThinus: A price increase is always a sensitive issue for any consumer oriented business which DStv falls under. Annually, the number of people who have DStv in South Africa grow year-on-year irrespective of subscription increases. 
Although DStv is seen as a luxury service, it seems as if in South Africa, although it falls under discretionary spending, millions of TV households feel that DStv is an absolute necessity they can't bear to be without. 
We don't see the American phenomenon of so-called "cord-cutting"? What do you think it says that even though DStv prices increase, people keep and more people sign up for DStv?

Mark Rayner: We're extremely thankful that our customers feel so passionate about our products. We totally understand that price adjustments is a sensitive issue and directly impacts our customers pockets. 

We believe we provide great entertainment for the whole family  at affordable prices. We work hard to constantly enhance the viewing experience on our service by introducing new technologies such as Explora, which has changed the way our customers experience our content.

We believe our entertainment offering compares favourably with other entertainment options and have put together different DStv packages to suit different lifestyles and pockets. We've done a lot of research into what pay TV costs in other parts of the world, and we believe that DStv is still one of the most affordable services you can get.

MultiChoice has started to drop certain content for instance sport like the Bundesliga. Has this been done to manage content costs and what does it signal for the future? A lot of DStv subscribers are used to DStv "having everything". 

Is there going to be more content omissions in future, meaning things that DStv might deliberately not acquire, to manage content costs?

Mark Rayner: Our content buying decisions are always driven by viewers' choice. We do a lot of research into ascertaining what our customers watch, as well as what they'd like to watch. If a show's not wildly popular it makes sense for us drop that and rather use this money for programmes that will benefit a wider audience. 

We will, as always, work closely with our content partners to make sure you get the most engaging entertainment for your money. 

DStv EasyView is becoming cheaper and DStv Access remains unchanged. How is this possible? Are other DStv packages subsidising these, or are the available content and channels reduced? Why are these not increasing?

Mark Rayner: When we review our fees, we look at each package individually and then decide on the price adjustment based on what content is included, as well as the cost of the specific package. For example, the DStv EasyView package has very little international content, which means we can offer this package at last year's price. 

We charge customers on each package the fair value price for the channels they're getting. 

Some channels are premium channels and carry exclusive, first-run content which is very expensive, and are therefore only included on our more expensive packages. Certain customers don’t subsidise other customers.

Why are the various DStv packages not all increasing by the same percentage? DStv Family is for instance increasing by 10% for 2016. DStv Premium and DStv Compact are increasing by over 8%, while DStv Extra is 8%. 

Why is there different percentage increases, is it because different packages include different types of content that have different acquisition pricing and structures?

Mark Rayner: As explained above, we look at individual packages (and their content and costs) when we review our fees.

The product gap between DStv Access and DStv Family, as well as between DStv Extra and the top DStv Premium is widening for instance. Is MultiChoice perhaps considering adding more packages or do you see the existing spread of packages as working for all the various consumer price points?

Mark Rayner:

No, we're not looking to add more packages. We feel that the current six packages give our customers a lot of choice and options (in terms of content and price). There's really something for everyone – regardless of the size of their budget and their viewing tastes. 

What is there that you perhaps want to emphasise or explain to existing DStv subscribers and potential pay-TV customers about what MultiChoice offers and within the context of the  2016 price increase?

Mark Rayner: I need to emphasise that we take our responsibility to our customers seriously. 

Their support is what keeps us going and in turn, our commitment to them is to keep delivering scintillating entertainment and cutting-edge, innovative products and services. 

For next year, we're looking to do more of the same – only bigger and better, with a continual focus on our customer experience.

Complaints flooding in over MultiChoice's latest 2016 DStv price hike as subscribers threaten to cancel - only they very likely won't.

Complaints are flooding in over MultiChoice's latest price hike for 2016 with subscribers threatening to cancel - only evidence and consumer history predict that they very likely won't.

With the latest DStv price hike set to come into effect on 1 April, furious DStv subscribers are venting, with many saying they're ready to get rid of their DStv.

Yet, despite stiff annual DStv increases for over a decade, MultiChoice's DStv subscriber base in South Africa has continued to grow annually.

In fact, ongoing multinational research reports the past few years about the pay-TV market in South Africa and elsewhere across the African continent continue to highlight the country and sub-Sahara Africa as one of the bright spots and fast-growing international markets for satellite pay-TV.

While households might complain about the rising cost of pay-TV subscriptions like DStv, the economic reality is that there's more pay-TV households in South Africa every year that the year before.

While some TV households might see it as a grudge payment, and while DStv is not a necessity, millions of South African TV households simply cannot bear being without their DStv package and the TV channels and shows it provides.

Ironically DStv subscribers in neighbouring countries like Zimbabweans are noting that DStv in South Africa is not only cheaper in rand but also offer more channels and better local TV content.

Many Zimbabweans try to acquire so-called "ghost accounts" - DStv subscriptions registered in South Africa, in order to pay less and to get access to the larger bouquet of DStv channels offered in South Africa.

Since Tuesday angry DStv subscribers in South Africa have been venting under the #DStvMustFall hashtag and others on Twitter and across other social media platforms about the latest above inflation DStv price increase that sees DStv Premium breaking through the psychological threshold of R700 per month for the first time, and increases of 8% or above for the majority of DStv packages.

"Your planned price hike will be losing a customer," wrote Ryan Robertson. "Do you honestly think I am going to pay what you asking to watch sport only? I will find a cheaper and better option".

"Dear DStv, since you are increasing premiums ... are you gonna stop repeating all your programs?" asked Khutso Seema.

Lesego Magoro suggested that "lets all go back to watching government channels".

"DStv I understand that you buy your shows in foreign currency. Also understand that South Africans don't earn salaries in foreign currency," wrote Saint Paul.

"DStv is a status symbol among aspirant media audiences and consumers and the growing South African middle class," Dr Musa Ndlovu, a media expert and a senior lecturer in media studies at the University of Cape Town's Centre for Film and Media Studies, told me recently as to why he think people get and keep their DStv subscriptions despite rising prices.

DStv price hike for 2016: MultiChoice announces DStv subscription increases from April for various DStv packages

After Eskom told South African consumers they will have to fork out 9.4% more for electricity in 2016, MultiChoice announce its annual price increases for the year as well, coming into effect from April and for the first time ever DStv Premium breaks through the psychological level of R700 per month.

DStv Premium, DStv Extra and DStv Compact packages are increasing by a whopping 8% or more – higher than inflation.

MultiChoice says fees for DStv Access and DStv decoder insurance have not increased, and that the subscription for DStv EasyView has decreased.

While MultiChoice in Africa for the first time ever hiked DStv subscriptions for a second time in one year in 2015 as African currencies tanked agains the dollar, South Africans were spared.

MultiChoice must pay in dollar and sterling for its international TV channels supplied by various channel providers for its DStv platform, as well as to procure expensive sports content rights, that combined run into billions of rand annually. Similarly local broadcasters like M-Net and e.tv buy the foreign content to schedule on their locally packaged channels in dollar from Hollywood.

While the rand also dramatically weakened against the greenback, South African DStv subscribers were spared a second price increase in the same year as what happened in 2015 in the continent’s other larger economies, including Uganda and Kenya. 

In Nigeria, MultiChoice in 2015 upped DStv subscriptions by 20% and between 21% and 30% in Zambia, leading to consumer outrage. In May a Nigerian court case against the DStv price increase was dismissed.

“We buy most of our this fantastic content in foreign currency and due to the depreciation of the rand by 29% since April 2015, our costs have gone up dramatically,” says MultiChoice.

“Over the past five years our adjustments have been in line with this action. We’ve worked very really hard to keep this year’s fees manageable,” says MultiChoice.

                                                2015                1 April 2016

DStv Premium                         R699               R759

DStv Extra                              R425               R459

DStv Compact                         R319               R345

DStv Select                             R199               R219

DStv Family                            R199               R219

DStv Access                           R99                 R99

DStv EasyView                      R39                 R29

M-Net analogue/CSN             R335               R369

DStv BoxOffice PVR rental   R30                 R35

DStv Access Fee                     R80                 R85