MultiChoice May Have to Decrease DStv Prices In 2019
MultiChoice might be faced with a difficult decision in 2019 – to continue to raise DStv Premium prices and lose even more subscribers to Netflix, or to cut prices and hope that a digital-only version of DStv will work.
Increasing satellite and cable TV subscriptions has caused many customers to cancel their packages overseas.
PayTV services such as DStv are feeling the pressure from streaming services such as Netflix and Amazon offering lots of content at prices much lower than satellite TV.
According to a report by Variety, the number of pay-TV service cancellations in the US will reach approximately 33 million in 2018 – a 32.8% increase over 2017.
The report further stated that the cancellations are caused by the high price of pay-TV which averages up to $100 per month in the US.
South Africa, is faced with the same dilemma.
DStv Premium is R899 per month. A significant number of subscribers have cancelled the service in recent years because of this price.
MultiChoice has admitted that Netflix is negatively impacting its DStv Premium subscriber numbers since its 2016 launch in South Africa.
At R169 per month for the premium Netflix package, it is the obvious choice over the expensive DStv.
Netflix’s latest results reflect that it signed up 6.96 million customers in the third quarter of 2018 – bringing its global total to a staggering 137.1 million.
On the other hand, companies like MultiChoice keep raising subscription prices to their services and show advertisements during shows, which Netflix does not.
MultiChoice is aware that it will have to make significant changes if it wants to level up to Netflix and has already put plans in place.
The Pay TV operator launched Showmax and rolled out its Catch Up video-on-demand service and Box Office for movies.
MultiChoice has also introduced DStv Now, which allows users to stream their DStv channels through supported apps or a web browser.
The company said it would also launch a streaming-only DStv subscription that does not require a dish or decoder.
A DStv Premium streaming package will not succeed though if the standard satellite fee of R809 per month is still charged.
According to a survey done by MyBroadband in 2018, the majority of users would not be willing to pay more than R300 per month for a DStv Premium streaming service.
This is consistent with the price of Netflix in South Africa and would require a significant price cut by MultiChoice.