MultiChoice Is Struggling To Retain DStv Premium Subscribers In South Africa
Naspers has published its financial results for the six months period ending on 30 September 2018.
Part of the company’s results zoomed in on the “video entertainment” division of the business, which includes MultiChoice Africa, MultiChoice South Africa, and Showmax Africa.
While MutliChoice’s number of subscribers went up overall for its operations in Africa, the company reported that the “premium base in SA” was under a lot of pressure.
The company’s total subscriber base grew to 13.9 million in the period, which is 14% more than the year before.
According to the results, South African users make up 7.2 million of that figure.
Naspers said that MultiChoice has continued to perform relatively well, despite the volatile macroeconomic environment remaining a big challenge.
Its growth was most significant in the mass-market, and over 285,000 subscribers were added in South Africa during the first half of their 2019 financial year.
However, Naspers added that the premium base locally was under a considerable amount of disposable income pressure.
The media group said that the focus of the South African business is still retaining premium subscribers while continuing to drive subscriber growth in the mid and mass-market tiers.
The pressure on the premium base resulted in a decline in average revenue per user in South Africa – from $25.32 to $24.45 year-on-year.
MultiChoice has openly admitted that Netflix is negatively affecting its DStv Premium subscriber numbers in South Africa.
The high price of DStv Premium subscriptions compared to Netflix means consumers who do not care about sports channels have had no problem dropping DStv and signing up for Netflix.
To counter this, MultiChoice has decided that it will launch an online-only version of DStv – but the price of the service will be an obvious key factor in determining its success.
Overall, revenue increased by 3% to $1.8 billion and trading profit remained flat – up only 6% – at $211 million for the video entertainment unit.
Credit: This article originated from www.mybroadband.co.za