DStv prices – really expensive?

MultiChoice is often criticised for its high DStv prices, especially on its high-end Premium bouquet which carries all the popular sports channels.

DStv subscribers have become accustomed to an annual DStv premium pricing increase, with the monthly premium currently sitting at R665.

This annual increase – typically inflation linked – is usually met with unhappiness, and MultiChoice is described by many people as a monopoly which is trying to maximise profits at the expense of its customers.

But is MultiChoice’s DStv premium product really as expensive as many people think? We sought to find an answer to this question.

However, while embarking on an exercise to benchmark DStv against international offerings seemed to be a good idea at first, it proved to be exceedingly difficult.

Not only were pay-TV offerings packaged differently from provider to provider, they were sometimes not even available on their own.

Bundled pay TV

For example, many pay-TV operators are also telecommunications companies (or have a partnership with one), bundling both telephone and broadband services with pay-TV into what is sometimes called “triple play” packages.

Even “triple play” has started to become an outmoded buzzword.

With the ubiquity of mobile phones, some companies have even started bundling cellular services with broadband, telephone, and TV into what marketers have called “quadruple play” packages.

For our comparison we’ve avoided the difficult task of trying to compare DStv to bundled services, and instead looked only at stand-alone subscription television services.

Month-to-month versus contract

Many overseas pay TV operators also don’t advertise their services on a month-to-month basis, preferring contracts instead.

In South Africa, DStv and StarSat both work on month-to-month subscriptions.

StarSat even has a prepaid option available, while a few MyBroadband forum members have highlighted how easy it is to cancel your DStv service and receive a pro-rate refund for the remainder of the month you’re not watching.

DStv does offer its subscribers an incentive if they pay for 11 months up-front, by offering them the 12^th month free.

Many overseas pay-TV companies prefer to advertise lower monthly fees with conditions. Usually those conditions involve signing a 6-month to 2-year contract, with the fees increasing after the first half of the term.

Promotional prices from overseas operators are also usually only valid for new customers.

For this comparison we disregarded the initial lower fees, looking only at the regular prices after the initial 6 or 12 month periods had elapsed.

What makes a “premium” bouquet?

Another consideration was which pay TV bouquets to include in the comparison.

The obvious starting point was DStv’s Premium bouquet, which includes all the content the platform has to offer in South Africa, particularly its high-value sports channels.

What remains then is to decide which packages from overseas players to compare DStv Premium against.

Since DStv Premium is the highest tier in MultiChoice’s subscription TV offering, would it not be right to compare it to the top-tier offerings of other pay-TV operators?

A quick comparison revealed that this might not be the case, as some of the companies we used in the comparison offered many more channels than DStv.

Channel count is also not necessarily fair as not all channels have equal value to a broadcaster (or distribution platform such as DStv).

In the end we decided to use premium sports as a starting point for this comparison.

If a mid-tier package had a premium sports offering (e.g. NFL, MLB, NBA, and NHL in the United States) and a decent number of entertainment channels, it was used in the comparison rather than a company’s higher-end bouquets.

Additional costs

Now that we’ve decided how we want to compare pay TV operators from different countries, the last thing that remains is to try and ensure that as many of the hidden costs are incorporated.

Most of the operators in this comparison have some kind of access fee subscribers have to pay before they can use high definition (HD), or digital video recording (DVR) services.

DStv doesn’t charge an additional fee to receive HD channels (though you do need a compatible decoder), but its does impose a PVR Access fee.

For the purpose of this comparison, PVR/DVR access fees were not considered, but where an operator required a fee to access HD channels, it was added to the price.

Some overseas pay-TV providers also don’t advertise the additional taxes levied on subscriptions to fund local programming initiatives.

In the US and Canada, prices are also quoted without any sales taxes included.

The Money Shot: DStv vs (some of) the world

A last caveat for this comparison: To keep it concise (yet meaningful), and for the sake of our sanity, only pay-TV providers with up-to-date English websites were considered.

The companies used in this pay-TV comparison are:

• Bell TV
• Comcast
• DStv
• Directv
• Dish
• Foxtel
• Shaw Direct
• Virgin Media

A note on exchange rates

The above exchange rate-based comparison suggests that DStv fares reasonably well price-wise against similar overseas pay-TV products.

However, doing a direct comparison of the cost of DStv against the converted Rand prices of overseas services has a few pitfalls.

For instance, it does not take into account how much people in a country earn, so it does not really indicate how affordable a pay-TV service is to people in those countries.

While it should be kept in mind that the input costs of pay-TV, such as content and equipment, aren’t adjusted to fit the average income of the people in the countries from which they operate, it would still be interesting to try and measure affordability.

To get an idea of how affordable DStv is, we converted the cost of the various pay-TV services compared earlier to international Dollar – calculated using the World Bank’s 2013 purchasing power parity conversion factors.

The table above shows that, in terms of affordability, DStv Premium is in-line with the top-end packages of Directv and Dish.

However, it does not compare favourably to the cheaper bouquets we originally compared it to in the first table.

More on pay-TV in South Africa

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