The combination of lower uncapped broadband prices and Netflix launching in South Africa has seen thousands of South Africans dumping their DStv Premium subscriptions.
So significant is the loss of DStv Premium subscribers that MultiChoice SA CEO Calvo Mawela is calling on ICASA to regulate Netflix, which he says has an unfair advantage.
To understand why MultiChoice is crying foul, we have to look at how the South African landscape changed over the last few years.
Only three years ago, fibre-to-the-home was in its infancy in South Africa – and very few households had the luxury of an uncapped, high-speed broadband connection.
This started to change after Vumatel, Openserve, Vodacom, MTN, and others started to ramp up their fibre rollouts.
But even with fibre becoming available to more households, the price of an uncapped 10Mbps service was still around R1,000 per month, which is seen as too much for most people.
At that time Netflix was also the domain of tech-savvy consumers who knew how to run a VPN to access the US-based service.
Changes to the market
There were three big changes over the last three years which directly impacted MultiChoice’s dominance in the high-end entertainment market in South Africa.
- Fibre rollouts accelerated, which means more household gained access to high-speed broadband.
- Uncapped (and large-cap) broadband prices started to decline.
- Netflix launched in South Africa in January 2016.
Armed with a high-speed broadband connection and access to streaming services like Netflix and Showmax, many DStv Premium subscribers dumped their subscriptions.
MultiChoice also did not do itself any favours by continuing to increase the price of its DStv Premium subscriptions every year.
Tipping point reached
What happened between 2016 and 2018 is that a tipping point was reached.
A DStv Premium subscription is now more expensive than an uncapped 10Mbps fibre-to-the-home connection and Netflix subscription combined.
Consumers can therefore pay for their fast, uncapped broadband service and enjoy Netflix for less than what a standalone DStv Premium service costs – which does not come with Internet access.
This change had a direct impact on DStv Premium subscriptions. MultiChoice lost tens of thousands of subscribers in 2017 and 2018, which set the alarm bells ringing at the company.
It is now calling for Netflix to be regulated, it is working on ramping up its own video streaming offerings, and it is trying to make DStv Premium more attractive through bundled offerings.
It will, however, be difficult to win back subscribers who jumped ship to Netflix – which offers an excellent service at a fraction of the price of a DStv subscription.
In short, DStv has been disrupted by cheaper broadband and a next-generation content service which offer subscribers what they want at an affordable price.
DStv Premium vs Fibre and Netflix
The table below provides a historic price comparison between DStv Premium, and an uncapped 10Mbps fibre connection and Netflix.
|Price Comparison – DStv Premium vs Uncapped 10Mbps Fibre and Netflix|
|Year||DStv Premium with Access||Uncapped 10Mbps FTTH and Netflix|