Image By: Multichoice
The original article can be found here.
DStv’s Premium packages have struggled to grow following the launch of Netflix in South Africa in 2016.
While the streaming giant’s service could be accessed via a virtual private network (VPN) service for several years, it only officially debuted in South Africa in January 2016 when it announced its massive global expansion.
In the years that followed, DStv acknowledged that Netflix was a major existential threat to its business.
Trouble brewing
A large part of the market who took up Netflix — more affluent South Africans with uncapped Internet packages — were also DStv Premium subscribers.
These subscribers pay for the most expensive packages, helping to keep DStv’s average revenue per user at a healthy level.
In the four years before Netflix launched, DStv’s Premium subscribers in Africa, which primarily consisted of customers in South Africa, was growing incrementally.
As of March 2012, it had 2.188 million Premium subscribers. This grew to 2.352 million by March 2015 — the year before Netflix launched in South Africa.
By March 2016, three months after Netflix’s local debut, the subscriber number had dropped to 2.097 million.
This trend continued over the next two years, with Premium customers falling to 2.005 million by March 2017 and 1.89 million by March 2018.
DStv shifts the goalposts
DStv changed its subscriber reporting metrics in 2018, opting to include Premium and Compact Plus subscribers in a new confusingly named “premium” segment.
This added roughly 500,000 Compact Plus subscribers to its overall “premium” count.
The following year, MultiChoice changed its reporting metrics again, opting to use 90-day active subscribers for its segment counts.
With this method, the broadcaster counted subscribers who had still been active on its service up to three months from the end of its financial year, not just those who were subscribed on the last day of the financial year.
This boosted the “premium” segment numbers by a further 100,000 in 2019.
MultiChoice added 100,000 “premium” customers in 2020, but there would be little to celebrate after that.
In 2021, premium customers dropped by 400,000, partly due to the economic effects of the Covid-19 pandemic and live sports going on hiatus.
Due to strong growth in its Rest of Africa (RoA) market, the segment grew by 200,000 to 2.5 million by the end of March 2022.
However, these customers declined again the following year, plummeting 300,000 to 2.2 million.
If one assumes that the proportions of Compact Plus customers and those added by using the 90-day active figure remained the same, DStv’s total Premium subscriber count could have been around 1.66 million by March 2023.
Image By: MyBroadband
The following chart shows how DStv’s Premium subscribers in Africa changed from 2012 to 2023.
The vertical red line shows when Netflix launched in Africa, and the two grey lines indicate when MultiChoice changed its subscriber reporting metrics.
MultiChoice’s overall subscriber base in South Africa initially appeared unaffected by Netflix’s launch — at least for the first few years after the streaming service rolled out.
DStv losing out
In the seven years leading up to Netflix’s launch, DStv added about 2.8 million customers. In the seven years after its launch, it added 2.341 million customers.
In fact, MultiChoice’s biggest growth in South African customers was reported roughly a year after Netflix’s launch — with 625,000 customers added between March 2016 and March 2017.
For the following three years, its subscriber growth roughly aligned with the previous years.
In its 2021 financial year, growth was slightly stunted by the Covid-19 pandemic, but MultiChoice still picked up 289,000 subscribers in South Africa.
However, instead of recovering in the following year, it lost 17,000 customers by March 2022.
The losses accelerated over the next year, with another 144,000 customers shed by March 2023.
While many factors could be influencing those declines, video streaming services may be increasingly penetrating less affluent markets in South Africa thanks to reduced data costs and the rollout of uncapped fibre in lower-income areas.
