How Netflix killed DStv in South Africa

Netflix killed DStv in South Africa by being customer-centric, futurist Craig Wing said at BCX Xcite on Thursday.

“DStv got killed by Netflix because of its high prices, lack of new content, and forced adverts,” Wing said.

“Technology and business models are not the biggest disruptors. Not being customer-centric and creating for users is the biggest threat to any business.”

Wing said that the same is true for other industries too, such as how Uber disrupted the taxi cab industry, iTunes disrupted CD stores, Amazon is disrupting physical retail, and how Airbnb is disrupting the hotel industry.

Netflix launched around the world in January 2016, including South Africa, bringing a dramatic halt to MultiChoice’s unchallenged growth in the premium video entertainment space in South Africa.

The first indications of Netflix’s effect on MultiChoice’s DStv Premium offering came from Naspers financial statements in 2016, which showed that there was a dramatic slowdown in new DStv Premium sign-ups.

In 2018, Naspers finally reported that DStv was losing Premium subscribers.

An analysis of Naspers financial results – using the figures it reports for total subscribers and its subscriber mix of Premium, Compact, and lower-end packages—showed that across its entire African operation, MultiChoice had been losing DStv subscribers since its 2015/16 financial year.

It should be noted that while MultiChoice’s DStv Premium packages suffered after the launch of Netflix across the African continent, its overall subscriber base continued to grow.

Even though DStv Premium was losing popularity, MultiChoice was still signing up customers to mid-tier (Compact) and lower-end services.

Screenshot of Craig Wing's presentation at BCX Xcite
Screenshot of Craig Wing’s presentation at BCX Xcite (click to enlarge)

DStv Premium in Africa: 2012 – 2018

The following chart shows how DStv Premium subscribers in Africa declined between 2015 and 2018, according to figures reported in Naspers’ annual results.

Unfortunately, it is not possible to directly compare these figures to those for 2019 and 2020, because MultiChoice has changed the way it reports subscriber numbers.

Naspers spun off the MultiChoice Group into its own listing on the Johannesburg Stock Exchange in 2019.

After the unbundling, MultiChoice started reporting a “Premium subscribers” figure, which is actually a combination of DStv Premium bouquet and DStv Compact Plus bouquet subscribers.

As a result of this change, MultiChoice is now reporting subscriber growth across all its operations in Africa for its premium segment.

In other words, DStv Compact Plus is growing enough in the rest of Africa to offset those DStv Premium subscribers cancelling their packages.

DStv subscribers from 2012 to 2020

The following table provides a summary of how MultiChoice’s subscriber number reporting has changed over the years:

  • Before 2016, DStv Premium subscriber numbers were not specifically reported, but could be calculated using the subscriber mix statistic provided by Naspers.
  • Naspers did not report the DStv subscriber mix for South Africa. MultiChoice started doing that in 2019.
  • Before 2020, MultiChoice reported its subscriber numbers as on the last day of its reporting period. For its financial year-end, this is 31 March.
  • In 2020, MultiChoice switched to reporting 90-day active subscribers.

The figures in the table below refer to total subscribers across all the regions in which the MultiChoice group operates.

Year DStv subscribers at 31 March 90-day Active DStv subscribers DStv Premium subscribers on 31 March DStv Premium and Compact Plus subscribers on 31 March 90-day Active DStv Premium and Compact Plus subscribers
2012 5,611,000 2,188,290
2013 6,739,000 2,291,260
2014 8,059,000 2,256,520
2015 10,225,000 2,351,750
2016 10,411,000 2,097,000
2017 11,942,000 1,962,000
2018 13,476,000 16,400,000 1,921,000 2,400,000
2019 15,097,000 18,600,000 2,500,000 2,600,000
2020 15,743,000 19,500,000 2,700,000
Note: DStv Premium subscribers for 2012-2015 estimated by multiplying Premium subscriber mix percentage with total DStv subscribers

Now read: Netflix and Prime Video on DStv – The video streaming endgame

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How Netflix killed DStv in South Africa