DStv Premium — death by a thousand cuts

The number of households that subscribe to high-end DStv packages declined by 8% in South Africa over the past year, according to MultiChoice’s latest financial results.

This is a continuation of a trend that started in 2016 when Netflix launched globally.

Initially, it only caused a slow-down in DStv Premium subscriber growth, but by 2018 MultiChoice revealed that its most profitable subscriber base was shrinking.

Despite this steady bleed in high-value subscriptions over the last several years, MultiChoice has posted record profits for the 2020/21 financial year.

This was due to increased uptake of its mid-tier and mass-market pay-TV services that helped reduce its reliance on DStv Premium, the company stated.

MultiChoice reported that it saw the second-highest number of new DStv sign-ups in its history in South Africa.

It said that this was driven, in part, by an acceleration in the growth of DStv Compact subscribers thanks to the success of its hit show Gomora.

This shift in DStv’s subscriber base from its premium pay-TV subscriptions to more affordable packages is evident from its 2017/18 financial results in the form of declining average revenue per user (ARPU).

DStv’s ARPU in South Africa since March 2015 is as follows:

  • March 2015 — R337
  • March 2016 — R347
  • March 2017 — R353
  • March 2018 — R344
  • March 2019 — R304
  • March 2020 — R290
  • March 2021 — R277

The following charts of DStv’s subscriber mix in South Africa show how DStv Premium and Compact Plus subscribers have decreased in the past two years, and how these declines were more than made up for by increases in DStv Compact, Family, Access, and EasyView subscribers.

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 and DStv Compact Plus subscribers.

In addition to bundling DStv Premium and DStv Compact Plus subscriber numbers together, MultiChoice also changed the way it counts subscribers.

Until last year, MultiChoice reported its subscriber numbers based on how many paying subscribers it had on the last day of its financial year — 31 March.

In 2020, MultiChoice switched to reporting the number of subscribers that have been active in the past 90 days.

This resulted in MultiChoice reporting substantially higher subscribers than before, as indicated in the table at the end of the article.

As a result of these changes, it is no longer possible to easily plot the decline of DStv Premium in Africa.

MultiChoice chief financial officer Tim Jacobs previously told MyBroadband that when Naspers spun off the MultiChoice Group into its own JSE listing in February 2019, they decided to change the reporting method.

“We had to make a choice between giving more information than what people were getting under the Naspers umbrella, but at the same time recognising that this is really competitive information and we don’t want to get to that level of granularity,” Jacobs stated.

“What we tried to do was to give additional metrics such as the average ARPU and price increase within that bucket of bouquets.”

Jacobs said these changes were generally favourably received by investors, though he admitted that some investors have been frustrated at not being able to drill down into a specific bucket, like DStv Premium subscriber numbers.

DStv subscriber reporting from 2012 to 2021

Before 2016, MultiChoice did not specifically report DStv Premium subscriber numbers, but they could be calculated by using subscriber mix statistics that Naspers released annually.

Naspers did not report the DStv subscriber mix for South Africa, though. MultiChoice started doing that in 2019.

Before 2020, MultiChoice reported its subscriber numbers as on the last day of its reporting period — 31 March. In 2020, it 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
2021 16,356,000 20,862,000 2,300,000
Notes: DStv Premium subscribers for 2012-2015 estimated by multiplying Premium subscriber mix percentage with total DStv subscribers

Now read: DStv under siege

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DStv Premium — death by a thousand cuts