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South Africans dumping DStv

by Staff reporter
14 Jun 2023 at 08:31hrs | Views
MultiChoice's latest annual results show its pay-TV service DStv lost South African subscribers between 31 March 2022 and 31 March 2023.

Its subscribers declined from 8.16 million to 8.016 million between these two dates — a reduction of roughly 144,000 or 1.8%.

Between the two previous years, 2021 and 2022, the decline was much lower — from 8.177 million to 8.16 million — a loss of about 17,000 year-end subscribers.

Before these decreases, DStv was adding subscribers every year.

While the latest decline is noteworthy, MultiChoice emphasizes a 90-day active subscriber number as the primary measurement of the size of its customer base.

It first introduced this method in 2020, reporting the number of subscribers active within a three-month period instead of the number of paying customers on the last day of its financial year.

Nevertheless, it has included its year-end subscriber numbers in each report.

The graph below shows how DStv's subscriber numbers changed from March 2018 to March 2023.

DStv's 90-day active subscribers in South Africa increased from 9 million to 9.3 million between the 2021/2022 and 2022/2023 financial years, a jump of 3%.

MultiChoice said the actual 90-day active subscribers added were around 290,000.

However, out of the three main segments that make up its customer base, only the entry-level Mass-market customers grew— climbing 10% from 4.9 million to 5.3 million.

These customers are subscribed to entry-level packages like EasyView, Access, and Family, which are much cheaper than higher-end bouquets in the Mid-market and Premium segments.

Each of these segments saw a reduction of about 100,000 90-day active subscribers.

It is possible that some of these subscribers migrated to cheaper packages in the other segments, rather than dropping DStv altogether.

In the Mid-Market segment — which includes Compact and Commercial packages — 90-day active subscribers dropped from 2.8 million to 2.7 million, a 3% decline.

On the Premium and Compact Plus packages that fall under the Premium segment, DStv lost 6% of its customers, resulting in a drop from 1.4 million to 1.3 million.

While the broadcaster has been bleeding customers in this top-end segment for several years, this drop comes close to its worst yet — the 8% decline from its 2020/2021 financial year.

However, in that instance, Covid-19 was believed to have played a role in consumers' cost-cutting.

The charts below show how DStv's 90-day active subscriber base changed between its 2022 and 2023 financial years.

MultiChoice said load-shedding was a major reason for the disconnect between its 90-day and year-end subscriber numbers.

"There was a noticeable increase in churn when load-shedding reaches stage 4 and above, even when consumers have disposable income," it stated.

It said the higher 90-day active subscriber figure shows customers still value the DStv product, while the 140,000 decline in year-end subscriber numbers showed customers were more selective when they signed up to avoid periods of excessive load-shedding.

The overall result of the above is a 5% decline in the blended average revenue per user (ARPU) of all DStv customers from R269 to R256.

Despite acquiring customers in the Mass-market, DStv's ARPU of R96 in this segment has also come down.

This suggests a trend of customers within this segment who are downgrading from the more expensive entry-level packages to cheaper ones.

The graphic below from MultiChoice provides details about the key ARPU drivers at DStv.

Outside of South Africa, MultiChoice increased its customer count — both in terms of year-end and 90-day active subscribers.

Year-end subscribers in the Rest of Africa (RoA) grew from 8.48 million to 9.29 million, a 10% jump.

On a 90-day active basis, RoA subscribers increased by 11%, going from just over 12.79 million to more than 14.20 million.

However, the RoA division generated only around half the revenue of the South African business — R22.95 billion against R41.96 billion —and a fraction of the trading profit — R898 million versus R8.49 billion.

Despite having more subscribers than the South African business, RoA contributed a blended ARPU of $7.3 (R136), 47% less than the South African ARPU.

Source - mybroadband