DStv’s battle against Netflix in South Africa

Given increased competition in the pay-TV market with the prominence of services like Netflix, Disney+, and Prime Video, MultiChoice has said it is reassessing its content packages for DStv to compete successfully.

The increased competition in the sector was highlighted in a discussion document by the Independent Communications Authority of South Africa (Icasa), with DStv losing several customers to other over-the-top (OTT) streaming platforms.

MyBroadband asked MultiChoice how DStv plans to compete with these platforms.

“What we have been talking about consistently as an executive team since I joined is how we reimagine the way we go to market,” said MultiChoice South Africa CEO Byron du Plessis.

“This includes how we service our customers and adapt to the changing trends that are the reality of our future. To continue to drive future success, we need to think differently than we have in the past.”

Given the growing trend of cord-cutting — cancelling a linear pay-TV subscription in favour of an Internet-based service, MultiChoice has introduced an OTT service of its own: DStv Stream.

While subscribers of the linear TV platform can access this for free, subscriptions to the various OTT-only packages can be purchased at a discounted rate.

Du Plessis noted the 71% year-on-year growth of the platform reflected in the firm’s September 2024 results and that it now records an average of 150 million views per month.

A large part of DStv’s appeal to South Africans is its monopoly on sports, as MultiChoice is in the economic position to purchase exclusive sports rights to football, rugby, and cricket content — classified as the most in-demand sports in the country.

“SuperSport remains a force for our business, and our ability to bring sporting moments to life, both on traditional and streaming platforms, remains a core value proposition of our offering,” Du Plessis said.

The rights to broadcast sports are often sold exclusively because these packages yield the most revenue for sports bodies, which is necessary to pay players and invest in development.

Icasa has not definitively concluded whether a lack of competitive bidding or DStv outbidding competitors causes this dominance.

Despite this dominance, Icasa says evidence suggests many of DStv’s competitors can still compete “without having to spend significant amounts of money on expensive sports content.”

Some OTT platforms competing with DStv for sports content include Amazon and DAZN.

Icasa noted that DAZN has successfully competed with MultiChoice for IPL rights in the past.

Growing linear TV competition in South Africa

DStv’s competition is also growing on the linear TV front, with its main broadcasting competitor, Openview, increasing its total number of viewers by over 3 million in nine years.

Openview is a free-to-air satellite television broadcaster owned by eMedia, offering users 20 channels to watch.

Launched in October 2013, the satellite television provider grew its user base from 112,715 in 2015 to 3,428,523 by the end of March 2024.

Although it is not a direct competitor to DStv as a non-subscription platform, Icasa considers Openview a service that the pay-TV operator’s customers may opt to switch to.

Icasa said that while it would expect customers to be less likely to switch to a different broadcaster because of the costs of buying a new decoder, Openview’s exceptional growth indicates this may not be true.

The broadcaster was able to grow its user base by 262,000 in one year, or 22,000 activations per month, according to the financial results of Remgro, which has a 32.3% effective interest in eMedia Holdings, for the year ending 31 March 2024.

However, eMedia Investments’ contribution to Remgro’s headline earnings declined by 13.1% to R113 million, down from R130 million in the previous financial year.