South Africans dump DStv Premium — even after sport returned

MultiChoice continues to bleed subscribers in its premium market segment, despite the return of one of the biggest drivers for DStv Premium — rugby.

MultiChoice published its interim financial results for six months between 1 April and 30 September 2021, stating that a “challenging consumer climate” hurt its South African business.

Earlier this year, MultiChoice CEO Calvo Mawela said that many of its DStv Premium subscribers who downgraded or cancelled their services would return when live rugby is back on the air.

“This past year has been very difficult for rugby. This is why we have seen a significant number of people who have downgraded from DStv Premium,” said Mawela.

“As soon as rugby comes back, they upgrade to DStv Premium”.

However, this has not played out as Mawela predicted.

DStv has not only continued to bleed premium subscribers, it has also started to lose subscribers in its mid-market services.

MultiChoice lost over 100,000 subscribers across its DStv Premium, Compact, and Compact Plus packages.

It made up those lost subscribers in its cheaper mass-market segment to post an overall increase in 90-day active subscribers from 8.7 million to 8.9 million — or roughly 2%.

Its DStv Premium and DStv Compact Plus subscribers decreased by 5%, while subscribers on the DStv Compact and Commercial bouquets declined by 1%.

Mass market products like DStv Family, Access, and EasyView saw subscriber growth of 6% from 4.4 million to 4.7 million.

Regardless, MultiChoice said that the return of live sport, especially Springbok rugby, improved Premium trends compared to the prior period.

“Growth rates [were] impacted by rising unemployment levels and a short disruption caused by the tragic July riots in KwaZulu-Natal and Johannesburg,” MultiChoice stated.

MultiChoice also said that year-on-year comparisons are distorted as the prior period benefitted from strict lockdown conditions, which saw consumers prioritise video entertainment services.

While subscriber growth was poor, revenue increased 8% to R17.8 billion due to a strong recovery in advertising revenue and a 2% increase in subscription revenues.

This was supported by subscriber growth in the mass market, and the uplift from annual price increases, MultiChoice stated.

Monthly average revenue per user (ARPU) declined 2% from R278 to R273.

MultiChoice noted that this is less than previous periods, and was underpinned by the improved Premium trend, annual price increases, and a partial recovery in commercial subscription revenues.

Trading profit increased 7% to R6.2 billion, maintaining the first half trading margin at 35%.

“This higher profitability can be attributed to the boost in advertising revenues and the group’s cost optimisation programme, and was despite the costing of major sporting events such as Euro 2020, the British and Irish Lions rugby tour and the Tokyo Olympics in the current period,” MultiChoice said.

While MultiChoice bled high-end DStv Premium and Compact subscribers, it saw a surge in Connected Video users on the DStv app and Showmax.

“Paying Showmax subscribers were up 42%, with overall online users increasing 33% from the prior period, representing a 3% gain in share of the African OTT market since December 2020,” the company said.

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