DStv Premium exodus

MultiChoice has lost between 671,000 and 1.6 million Premium subscribers in the past eight and a half years.

Subscriptions to DStv’s top-tier package have declined since March 2015, when customers peaked at 2.35 million across all the company’s markets.

By March 2018, Premium customers had dropped to 1.92 million. Since that year, MultiChoice has stopped reporting Premium-only subscribers and instead grouped them with Compact Plus.

At the time, this more affordable package was gaining traction among middle-class households, which primarily wanted to watch DStv’s entertainment channels, football, and a handful of other sports.

Due to the addition of Compact Plus subscribers, the “premium” segment increased to 2.4 million. By March 2019, the number had increased to 2.5 million.

MultiChoice again changed its subscriber reporting standard that year.

The broadcaster went from reporting actual subscriber numbers by the end of an interim or annual financial period and instead counted all customers who had subscriptions up to 90 days before the last day.

This resulted in the premium segment jumping to 2.6 million by March 2019 and then 2.7 million in March 2020.

However, it’s been downhill from there, with the premium segment slumping to 2.1 million by September 2023, the last day in MultiChoice’s latest financial reporting period.

Roughly 1.3 million of these customers were in South Africa, down from 1.6 million five years ago.

The table below shows the changes in DStv’s Premium and Compact Plus 9-day active subscribers from September 2018 to September 2023.

Premium segment changes
End of interim period South Africa Rest of Africa
September 2019 -2% -2%
September 2020 -5% -1%
September 2021 -9% 9%
September 2022 -3% 4%
September 2023 -5% -9%
Overall change Roughly 300,000 drop Flat

MyBroadband estimated the remaining Premium-only subscribers using MultiChoice’s historical operational information and trends.

When the company was still reporting its Premium subscribers on their own, it was possible to determine the proportion of the total base that used the top-end package.

That number dropped substantially from about 39% to 14% from March 2012 to March 2018, working out to about a 3.5 percentage point drop per year.

Even if the decline slowed down to around half that rate over the next five and half years, DStv Premium customers would have made up only around 5.5% of the company’s total subscriber base by March 2023.

By September 2023, the Premier customers’ total actual subscriber base stood at 16.7 million.

MyBroadband’s calculations showed that the Premier base would have decreased to about 4.625% of the total at that point, working out to 773,205.

That equates to a decline of 1.6 million Premium-only subscribers.

The graph below plots DStv Premium subscribers from March 2013 to March 2018 and estimates their numbers up to March 2023.

Another way to estimate the number would be to use the ratio of DStv Premium to Compact Plus customers by March 2018, which is the only time MultiChoice reported both numbers.

At that point, Premium made up 1.92 million of the 2.4 million customers in the premium segment, which meant Compact Plus contributed just about 580,000 subscribers.

If the proportion of 80% Premium to Compact Plus in this segment remained the same, then there would be roughly about 1.68 million Premium customers remaining — a decline of 671,000.

This scenario is less likely given that DStv Premium’s contribution to the total customer base was in freefall.

Top-tier customers switched to streaming — and less affluent ones could be joining the party

One of the biggest reasons for the DStv Premium decline is the availability of a myriad of international streaming services and growing uncapped Internet coverage in South Africa.

In South Africa, households that can typically afford DStv Premium are often located in affluent suburbs with extensive uncapped fibre-to-the-home, fixed-5G, or fixed-LTE coverage.

DStv’s Premium customers are incredibly valuable to MultiChoice, as they contribute the highest average revenue per user (ARPU).

As of September 2023, the Premium segment’s ARPU in South Africa stood at R570, compared to R293 and R94 for the mid-market and mass-market categories, respectively.

Their decline has led to DStv’s blended ARPU in South Africa dropping from around R308 in September 2018 to R247 by September 2023.

Therefore, although DStv added more subscribers, it was making around 20% less from each customer in South Africa than it had five years ago.

The broadcaster has increasingly relied on its mid-market and mass market, but these segments have also seen declines in recent times.

This could be due to a combination of factors — including more affordable mobile data and mobile-only streaming subscriptions, as well as households cutting non-essential items from their budgets due to weak economic performance.

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DStv Premium exodus