Multichoice is a company South Africans love to hate. It is blamed for fleecing consumers for its pay-TV services and for keeping competition out of the market.
The company also drew the ire of conservative Afrikaners when it decided to ban all content which featured Steve Hofmeyr.
This decision resulted in a DStv boycott by many in the Afrikaans community who proudly ditched their subscriptions and destroyed their decoders.
Despite the anger towards Multichoice and increased competition from streaming video services like Netflix and Amazon Prime, the company continues to grow its subscribers.
Multichoice added over half a million DStv subscribers to its South African customer base, which now sits at 7.4 million (see the image below).
While its DStv Premium subscriber numbers declined, which Multichoice admits is because of affordability, its middle- and mass-market segments showed strong growth.
This raises the question of how a company which is so hated among some sectors of society continues to show strong growth.
DStv is tough to compete against
There are numerous reasons why DStv is maintaining its dominant position in the South African entertainment market.
One reason is the poor penetration of fast and affordable broadband access which makes it unfeasible for most people to use bandwidth-intensive streaming services like Netflix.
The company is, however, also doing many things well. It provides a truly world-class offering, especially when it comes to sports content.
DStv offers the best sport from around the world, which includes 7,500 live events and 700 local productions.
It is also a leader in local content. Multichoice produced 4,600 hours of local content in 17 languages over the last year.
The combination of sport, local content, and quality international programming make it a compelling offering to many South Africans.
An added benefit is its DStv Now and Catch Up platforms, which offer some DStv subscribers live sports and content streaming.
Excellent anti-piracy measures
One of Multichoice’s biggest strengths is its excellent anti-piracy capabilities, provided through its security solutions company Irdeto.
Irdeto is a world leader in digital platform security – its software security solutions and cyber services protect over 5 billion devices and applications for some of the world’s best brands.
Irdeto is the second-largest content protection vendor in the market, with a presence in 20 countries and a customer base in approximately 90 countries.
Over the last year, Irdeto’s solutions were behind disconnecting 1.3 million pirate households.
Considering the full suite of services and content which is offered by Multichoice, it is nearly impossible for a new player to enter the market.
DStv’s biggest threat is therefore not a new pay-TV player, but affordable broadband and over-the-top streaming services like Netflix.
The image below provides an overview of Multichoice’s performance over the last year.