Despite its ongoing financial woes, digital TV operator TopTV says that its prepaid payment voucher model is proving to be “extremely popular”, selling close on 70,000 vouchers on consignment to various distribution partners in the first three months since launch.
TopTV added that it has been activating more than 500 prepaid vouchers daily in recent weeks.
Earlier this month, TopTV said it would adopt the provisions of business rescue as per the new Companies Act (under Section 129) in order to stay afloat financially while it searches for an equity partner.
On Digital Media (ODM), the company that runs TopTV, also sent out a letter to creditors warning them that they would not be able to pay debts for the next six months.
The company underwent a business review in February, following the resignation of former CEO, Vino Govender.
However, the group said that the new team had made great strides in moving the business forward, including the launch of a series of innovative products including prepaid subscriptions.
TopTV Prepaid is currently available in two package and payment options – Variety at R109.00 for 30 days once activated, and Ultimate at R279.00 for 30 days. A voucher is redeemable at any time during a three-year period but, once activated, is only valid for 30 days.
If a second voucher is activated before the 30-day period is up on the first voucher, the subscriber will not forfeit any viewing days. The second voucher will only kick in once the 30 days on the first voucher has been utilised.
“Considering the fact that the majority of national retailers will only start selling the vouchers in late November, as well as the high number of repeat purchases, it is clear that the best is yet to come,” said Eddie Mbalo, interim CEO of TopTV.
“We believe the product’s take-up and popularity is due to its ease of use, convenience and instant access, once activated, to the TopTV offering of quality programmes across more than 60 channels.”
According to TopTV, its prepaid model is fast proving to be a preferred and popular payment option.
“Most significantly though, we are able to grow the business without increasing the administrative burden – that’s important, because it allows us to contain costs,” Mbalo said.
“We believe that we have now found the right business model: one based on flexibility and that understands the current realities of doing business in South Africa, where many South Africans are unbanked and financially excluded.”
According to TopTV, one of the strategic objectives in launching a prepaid service was to entice lapsed or dormant subscribers to reconnect to the service.
With more than 400,000 decoders installed in households, but only on average 150,000 active paying subscribers each month, TopTV decided to target this section of the market first.
“It seems the strategy is working,” it said.
Of the thousands of prepaid vouchers that have been sold and activated to date, almost 65% of these have been activated by customers whose subscription had either lapsed or been disconnected, TopTV continued.
“Some interesting stats are emerging regarding who our prepaid customers are, and their TopTV subscription history. Of the current activations, 26% are new, first-time subscribers who have signed up to the service within the past three months, since prepaid was launched. Another 26% originally subscribed to the service when TopTV launched in May 2010,” stated Kgomotso Lekola, interim COO of TopTV.
“23% of current active subscribers, who were paying previously via debit order, Easy Pay or cash each month, have also opted for the convenience of the prepaid system. From these figures, it is interesting to follow the sales trends that are emerging – and to note that we are delivering on one of our strategic objectives: to lure lapsed subscribers back to TopTV.”