DStv unfazed by existential streaming threat
MultiChoice appears unfazed by the threat posed by Netflix and other streaming services, despite its average revenue per user (ARPU) declining as high-end subscribers dump its top-tier subscription.
As affordable uncapped broadband becomes more accessible to South African residents, the trend is likely to intensify as streaming uptake increases.
MultiChoice told MyBroadband that it is in a position to lead the way with its Africa-first streaming offering.
“Showmax is designed for our markets and brings our subscribers the continent’s best and most-loved African stories,” MultiChoice said.
“It’s also the home of HBO online in Africa as well as a broad selection of award-winning and blockbuster international movies and series, with an ever-growing catalogue of exclusive Showmax Originals and the best kids shows, as well as live sport from SuperSport on our Showmax Pro package.”
“The introduction of Disney+ continues to keep us top-of-mind for customers looking to continue enjoying our robust local and international content,” it added.
Despite the broadcaster’s optimism, MultiChoice had previously acknowledged that it faced an existential threat from competing streaming services.
The number of streaming services available to South African residents has grown substantially since Netflix officially landed in the country in 2016.
Its financial results also show that the company’s ARPU has constantly declined since its 2017/18 financial year, despite increasing DStv’s overall subscriber base.
Although the number of DStv subscribers is rising overall, they are spending less on average despite MultiChoice’s annual price increases.
For the first time, DStv MultiChoice also recorded a decline in its mid-market segment of 6% in 2022. This was in addition to losing 4% of its premium subscribers.
The decline of DStv’s ARPU can likely be attributed to several factors, including:
- DStv Premium, Compact Plus, Compact, and Commercial subscribers are downgrading their services to cheaper options.
- Top- and mid-tier subscribers are dropping the service to switch to video streaming services.
The following chart shows MultiChoice South Africa’s steady decline in ARPU since March 2017.
DStv ARPU. X-axis truncated to make declines more visible. (Click to enlarge)
Earlier this year, MultiChoice CEO Calvo Mawela said the company was well-positioned in the African streaming market, primarily due to its hold on local content on the continent.
Mawela explained that MultiChoice includes the likes of Netflix and Amazon Prime Video in its product offerings as part of its super aggregation strategy.
“We have our super aggregation strategy where we have included the likes of Netflix and Amazon Prime,” he stated.
He added that DStv just launched a bundled package with Disney+, saying that the numbers MultiChoice has seen are encouraging.
Mawela said that DStv’s super aggregation strategy is already starting to benefit the broadcaster and its subscribers.
“What we have also seen is that, through this aggregation strategy, people use our platform to access these various services depending on the content they want to watch at any particular point in time,”
He added that people love the convenience of using one remote to switch between all these different platforms.
According to MultiChoice, it is the home of local content in Africa.
“We have for years provided our DStv subscribers with the best of local and international content,” MultiChoice said.
“From internationally acclaimed programming such Game of Thrones, to the locally lauded The River and many like it, we take great pride in providing great content.”
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