{"id":520985,"date":"2024-01-09T07:00:35","date_gmt":"2024-01-09T05:00:35","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=520985"},"modified":"2024-01-09T07:05:51","modified_gmt":"2024-01-09T05:05:51","slug":"dstv-disaster","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/broadcasting\/520985-dstv-disaster.html","title":{"rendered":"DStv disaster"},"content":{"rendered":"

“Nightmarish” would be an apt description for the year South Africa’s biggest pay-TV provider \u2014 DStv \u2014 endured in 2023.<\/p>\n

The broadcaster saw its subscribers in South Africa and profits shrink in its interim results for the six months ending September 2023.<\/p>\n

While it recorded a negligible drop in absolute subscriber numbers in its previous full financial year, it was the first time that its 90-day active subscribers also declined.<\/p>\n

This figure includes any customers subscribed to the service within three months of the end date of MultiChoice’s reporting period, a metric the broadcaster adopted in 2020 to polish its declining Premium subscriber numbers.<\/p>\n

In terms of absolute subscribers in South Africa, it lost close to half a million<\/strong><\/a> across all its bouquets.<\/p>\n

In previous years, it was only the higher-end premium market, which includes customers on its more expensive Premium and Compact Plus packages, which chose to ditch DStv.<\/p>\n

Across all its operations, DStv parent MultiChoice saw its profit plummet 22%<\/strong><\/a> from R6.2 billion to R4.8 billion.<\/p>\n

MultiChoice has blamed the poor DStv results on load-shedding, cost pressures on consumers, and a depreciation in the value of local currencies against the US dollar.<\/p>\n

Investors have grown increasingly sceptical of the company’s performance and growth plans.<\/p>\n

MultiChoice’s share price closed at an all-time low of R63.21 on 17 November 2023, around half its value at the start of the year.<\/p>\n

Gains in the share’s value in March 2023 after announcing an agreement with NBCUniversal and Sky, properties of the largest multinational telecoms and media conglomerate in the US, were quickly wiped out.<\/p>\n

The graph below shows how MultiChoice Group’s share price struggled in the past year.<\/p>\n

\"\"<\/p>\n

DStv’s biggest existential threat is global video streaming services like Netflix, Disney+, Amazon Prime Video, and BritBox.<\/p>\n

Its remaining cards in the premium market are its vast sports broadcasting rights and strong catalogue of locally created and locally relevant content.<\/p>\n

However, the sports honeymoon might soon be over as international video streaming services increasingly seek to secure sports broadcasting rights for high-profile events.<\/p>\n

With much deeper pockets than MultiChoice, it would be easy for a company like Disney to outbid SuperSport for the rights to the United Rugby Championship, for example.<\/p>\n

The company is also facing the threat of increased investment in locally-made content by global streaming providers.<\/p>\n

Broadcasting experts argued that DStv’s large customer base made it the ideal platform to become a content aggregator \u2014 like Canal+ or Sky.<\/p>\n

Aside from offering a few streaming services on its Explora Ultra and Streama boxes, as well as add-on bill options, DStv has been slow to embrace this potential new role.<\/p>\n

Showmax 2.0 to the rescue?<\/h2>\n

MultiChoice is going all-in on a relaunched Showmax streaming service<\/strong><\/a> arriving in February 2024, with which it hopes to double its overall customer base in the next five years to reach 50 million subscribers.<\/p>\n

It took the company 17 years to hit 21 million subscribers, excluding Showmax customers.<\/p>\n

Showmax’s external revenue increased by 46% in Multichoice’s last interim results, climbing from R381 million to R555 million.<\/p>\n

However, its trading losses increased by over half a billion rand \u2014 from R279 million to R799 million.<\/p>\n

Showmax is still highly unprofitable, with a net loss of R1.41 billion between 1 October 2022 and 30 September 2023.<\/p>\n

According to an analysis by Daily Investor, it would be a very tough ask to increase Showmax’s subscriber base from an estimated 1 million subscribers to 25 million in the next five years.<\/p>\n

Previously, Showmax only grew its subscribers by around 125,000 per year. To meet its new goal, it would have to see subscriber growth surging by over 3,700%.<\/p>\n

As any of the major video streaming services would tell MultiChoice, making this type of business profitable is difficult.<\/p>\n

While Netflix’s early head start gave it an advantage, major streaming services like Disney+ and Max (formerly HBO Max) from Warner Bros. Discovery struggle to make money.<\/p>\n

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Showmax 2.0 interface<\/p><\/div>\n

MultiChoice is also venturing into the business of gambling.<\/p>\n

SuperSport recently launched a sports and casino betting platform called SuperSportBet, in partnership with Nigerian betting business Kingmakers<\/strong><\/a>.<\/p>\n

It remains to be seen if this platform can generate meaningful revenue for the company. If it performs anything like Kingmakers itself, that won’t be the case.<\/p>\n

MultiChoice has repeatedly written down its R6 billion investment in Kingmakers due to its struggle to turn a profit. It most recently valued the investment at R4.73 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"

DStv had a rough 2023 and there is little to suggest that things will get easier this year, unless its revamped Showmax service and new betting platform deliver the goods.<\/p>\n","protected":false},"author":341042,"featured_media":501998,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[85,35,83067,475,90497,91755,62312],"class_list":["post-520985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-broadcasting","tag-dstv","tag-headline","tag-kingmakers","tag-multichoice","tag-showmax-2-0","tag-supersportbet","tag-video-streaming-services"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/520985"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341042"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=520985"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/520985\/revisions"}],"predecessor-version":[{"id":521013,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/520985\/revisions\/521013"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/501998"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=520985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=520985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=520985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}