Netflix eating DStv’s lunch

Streaming services are eating into satellite TV revenue, and MultiChoice-owned DStv is at risk of having its lunch eaten by players like Netflix, Amazon Prime Video, and Disney+.

The pay-TV broadcaster’s results for the year ended 31 March 2024 reported a R4.1-billion loss and declining subscriber numbers. The results also revealed that MultiChoice is technically insolvent.

According to Leslie Adams, sales director at Reach Africa, DStv is following a trend observed by satellite TV providers in major Western markets.

“DStv is following a trend that we’re seeing in the US and Western Europe, where streaming services are eating some of their lunch,” Adams told 702.

He explained that streaming services offer the benefit of tailoring content to your viewing preferences and the flexibility of cancelling and resubscribing when you choose.

“Your interests will evolve and change and it may be very periodic, but now the option is available to you to just turn on and turn off,” said Adams.

Looking specifically at DStv’s operations in South Africa, the pay-TV broadcaster’s annual results revealed that subscribers in the country declined from 8.0 million to 7.6 million over the last year.

Even South Africa’s Department of Communications and Digital Technologies has acknowledged the threat international streaming platforms like Netflix pose to satellite TV broadcasting.

“On-demand music and video online streaming services are seriously disrupting the industry globally,” it stated in its annual performance plan for 2024/25.

However, MultiChoice believes its streaming service, Showmax, makes it well-positioned to lead the streaming industry in Africa. It says Showmax is the “home of local content in Africa”.

“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.”

It noted that it has also made it possible for DStv subscribers to access prominent streaming services like Netflix, Disney+, and Amazon Prime Video using their decoder.

“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.

Premium declines since Netflix’s local launch

Netflix launched globally in January 2016. Its launch in South Africa, combined with expanded access to uncapped fibre, was a significant driver behind the decline in DStv subscribers, particularly those in the Premium segment.

As uncapped fibre was initially only available in more affluent areas, DStv Premium was the first segment to see declines.

Between March 2015 and March 2016, the pay-TV broadcaster lost over 250,000 Premium subscribers.

The Premium subscriber base peaked at 2.35 million in March 2015 and declined to 1.92 million in March 2018.

In that year, MultiChoice stopped reporting its Premium subscribers separately and started grouping them with its Compact Plus subscribers in the Premium segment.

Uncapped fibre has also become more affordable with coverage expanding to middle- and lower-income areas. Households in these areas also started dumping DStv’s lower-tier packages.

MultiChoice focuses on a 90-day active subscriber base metric in its reporting. Its annual results revealed that its 90-day active subscriber base declined from 9.3 million in 2022/23 to 8.6 million in 2023/24.

The broadcaster’s mid-market subscriber base was hardest hit in the last financial year, with a 15% decline in the segment.

Its mass-market segment, which includes DStv Family, Access, and EasyView subscribers, saw a 5% decline over the year.

The Premium segment saw 90-day active subscribers drop 8% from 1.3 million to 1.2 million subscribers.

The chart below shows MultiChoice’s official Premium-only subscriber declines until March 2018, with estimated numbers for March 2019 to March 2024.