by Thinus Ferreira
Let the magnitude of it sink in: Another 200 000 - two hundred thousand! - people who used to pay for DStv became so-called "cord-cutters" and dropped MultiChoice within the space of six months. And these are not just any subscribers, they're the top-paying subscribers.
MultiChoice in its interim results for the six months until 30 September 2022 reported that while its overall number of subscribers grew, its DStv subscriber count in South Africa once again declined where it matters and hurts most - high-end premium segment subs.
Quite worryingly, the ground under premium that used to seem impervious is also starting to sag: In the DStv middle market, thousands of subscribers also decided to cut the cord.
In its premium segment, comprising DStv Premium and DStv Compact Plus subscribers, MultiChoice shed another 100 000 subscribers in South Africa.
In its so-called mid-market tier, comprising DStv Compact and commercial subscribers, MultiChoice lost 100 000 subscribers.
That's 200 000 subscribers combined who are gone and who used to see value at a certain price point but no longer can or want to pay for DStv.
While 400 000 DStv subscribers were added on the lower-tiers or "mass market" - DStv Family, DStv Access and DStv EasyView - it means that DStv has fewer viewers, and therefore lower ratings, for its costly premium content on channels like M-Net, 1Magic, SuperSport and kykNET and the premium international TV channels it pays channel carriage fees for.
MultiChoice's admission that another 200 000 of its better DStv subscribers said goodbye comes in the same week that hotel boss, Anton Gillis, CEO of the Kruger Gate Hotel, in an open letter in the BusinessDay newspaper took MultiChoice to task over how pricing is pushing people away from DStv and into the arms of streaming services like Netflix SA, Disney+ and others - explaining how they offer the same, for less.
In his letter, Anton Gillis points out how "the high cost of DStv sticks out like a sore thumb".
"It's increasingly easy for hoteliers to offer other options to guests," he writes. "For the same price as a single DStv bouquet, they could have dedicated accounts for two or three of the biggest streaming services in each room. In doing so they'd be offering guests a far greater content selection without exposing them to the shortfalls of linear TV".
In MultiChoice's financials, Calvo Mawela, MultiChoice CEO, notably writes: "Going forward, we will look for more opportunities to grow beyond pay-television. We will also be bringing additional value-added services to our customers as part of our strategy to build a broader consumer offering."
Little to nothing is said about what the company's focus is, or how it is doubling down its focus, on looking for opportunities to strengthen its premium pay-TV offering - to keep doing what it used to do so well to attract and to keep subscribers glued to its top-tiered bouquets in its premium segment.
How does a company like MultiChoice not just keep pulling people willing to pay for quality TV but prevent churn - or has it abandoned that dream and quietly capitulated to video streaming services? Is the thinking now that premium subscriber losses will continue and happen anyway, with the effort now shifting to focus on how to not lose premium segment subscribers so fast?
In difficult economic circumstances, people still pay for (moderate to expensive) products and services if the consumer thinks it's worth it. Two hundred thousand consumers, over six months this year, no longer thought that what they were paying for, is worth it.
MultiChoice is also laying blame on electricity blackouts, saying Eskom's load-shedding has dampened DStv subscriber growth.
Yet, MultiChoice also says subscribers of its video streaming service Showmax grew 50% (without giving any numbers). Is a lack of electricity a bigger turn-off so to speak for a premium segment DStv subscriber than a consumer of streaming content?
In Africa, and in South Africa, there are still many potential consumers left who could be enticed into paying for traditional linear pay-TV. Out of this segment, there are people who will pay for premium content and premium packages, if the consumer feels that what they're paying is offering value at the price.
Traditional linear TV is still how the bulk of premium sports - both local and international - on SuperSport's channels on MultiChoice's premium DStv bouquets are being watched in South Africa - on big flat-screen TVs in homes and communal viewing.
If only MultiChoice could find a way to replicate and retain this value-proposition stickiness for premium segment DStv subscribers, at a price that makes sense, for its other general entertainment content.
