Netflix Beats All Satellite TV To The Ground
When Netflix touched down in South Africa on 6 January 2016, it marked the end of MultiChoice’s uncontested dominance in the country’s premium video entertainment market.
No longer would DStv’s sole competitors be small digital satellite TV startups that had no funding to take on MultiChoice. Now MultiChoice would come face to face with a global powerhouse that could outspend over and over.
MultiChoice recently reported that it had spent more than R33 billion in film and programme rights between April and September this year, and had spent over R1.7 billion on local entertainment and sports in South Africa.
Netflix, on the other hand, is estimated to spend $13 billion (R190 billion) just on its commissioning of original content in 2018.
MultiChoice said that it had been losing DStv Premium subscribers because of competition from Netflix and also the increased financial pressure on South Africa’s middle class
Naspers’ annual results for 31 March 2018 revealed that DStv Premium subscribers across the MultiChoice Group had declined by 41,000.
In the previous year, the group had lost 135,000 DStv Premium subscribers.
DStv’s overall subscriber base continues to grow even though most of this growth comes from the lower-end subscribers. This means that MultiChoice’s mass-market is still increasing, regardless of the decline in its high-end subscribers.
As more affordable, high-speed broadband becomes available in South Africa, more people will take up the cheaper streaming video services.
DStv which is not the only pay-TV company that is feeling the burn from Netflix, though.
Netflix is affecting traditional pay-TV operators all over the world.
The European pay TV, Dataxis found that its market only grew by 0.3% in the first quarter of 2018, compared to its subscriber numbers in Q4 2017 –lower than it has ever reported.
In Netflix’s home market, the USA, Variety reported that the number of people cancelling their pay-TV services would increase significantly.
According to S&P Global Market Intelligence, in 2017 traditional American pay-TV providers experienced a record-breaking 3.7% drop in subscribers.
The biggest reason that this is happening is the high price of pay TV.
One of the reasons Netflix is currently succeeding over pay TV is because it simply costs less.
Credit: This article originated from mybroadband.co.za