MultiChoice is battling to keep DStv Premium subscribers in South Africa

Naspers has released its financial results for the six months to 30 September 2018.

Part of the company’s results detail the “video entertainment” division of the business, which includes MultiChoice South Africa, MultiChoice Africa, and Showmax Africa.

While MutliChoice’s subscriber numbers went up overall for its operations in Africa, the company said the “premium base in SA” was under pressure.

The company grew it total subscriber base to 13.9 million in the period, which is a 14% increase over the year before.

South African users make up 7.2 million of this number, according to the results.

MultiChoice

Premium users

Naspers said MultiChoice has continued to perform well, despite the macroeconomic environment remaining a challenge.

Its growth was seen “mostly in the mass-market”, and 285,000 subscribers were added in South Africa in the first half of their 2019 financial year.

The premium base locally was “under some disposable income pressure”, however, it added.

“The focus of the South African business remains retaining premium subscribers while driving subscriber growth in the mid and mass-market tiers,” said Naspers.

The result of the pressure on the premium base was a decline in average revenue per user in South Africa – from R347 to R335 year-on-year.

MultiChoice has openly admitted that Netflix is hurting its DStv Premium subscriber numbers in South Africa.

The relatively expensive price of DStv Premium subscriptions compared to Netflix means consumers who do not want sports channels do not have to think too hard about dropping DStv and signing up for Netflix.

To counter this, MultiChoice plans to launch an online-only version of DStv – but the price of the service will be a key factor in determining its success.

Overall, revenue increased 3% to $1.8 billion and trading profit remained relatively flat – up 6% – at $211 million for the video entertainment unit.

ARPU

Now read: Back to blackouts in South Africa

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MultiChoice is battling to keep DStv Premium subscribers in South Africa