MultiChoice better hope its price freeze slows the exodus
We already spend a third of our viewing time watching free videos on social networks, so DStv must watch out
Competition in business is good for consumers. And in the case of MultiChoice’s DStv subscribers, competition has delivered a sweeter 2019. The satellite TV operator announced that it is freezing price increases for the top-end and cheapest bouquets this year.
At the top of the range, DStv charges a hefty R809 for premium subscription. For years DSTV could get away with increasing premium subscription fees without much consideration until on-demand video and streaming services came to eat its lunch.
MultiChoice CEO Calvo Mawela has openly admitted that Netflix is hurting its DStv premium subscription base, losing more than 100,000 premium subscribers in the 2017 financial year. But instead of going back to the drawing board to revise DStv’s uncompetitive pricing, Mawela called for regulation of Netflix, saying it had an unfair advantage as it did not have to pay tax or comply with black economic empowerment regulations.
The thought of paying over R800 a month and additional “access” fee to record shows, and another to get on-demand video services, is clearly not sitting well – even with those consumers who can still comfortably afford it.
A study by market research firm GfK last year showed that about 20% of South Africans who have subscribed for a video-on-demand service planned to cancel their pay television subscription. It also found SA consumers already spend more than a third of their viewing time watching free videos on social networks.
Multichoice might have taken some few pointers from that research but it remains to be seen if the price freeze on premium and below-inflation increases on other bouquets announced on Wednesday will slow the subscriber exodus.