Showmax growing but DStv Premium under pressure

On Thursday afternoon, MultiChoice released its interim financial results for the six months until the end of September 2021 that revealed that the pay-TV operator not only continues to bleed top-end DStv subscribers but that mid-tier subscribers are also abandoning its offering.

Overall, MultiChoice added 1 million subscribers in the six months to the end of September 2021 and now has 21.1 million pay-TV subscribers.

South Africa remains the pay-TV operator’s country with the largest subscriber base (12.2 million, 58%) with 8.9 million subscribers (42%) across sub-Saharan Africa (RoA).

In the six months under review, MultiChoice, however, lost over another 100 000 DStv Premium and DStv Compact Plus subscribers decreasing another 5%, and DStv Compact and DStv Commercial customers declined by 1%, from 2.9 million to 2.8 million subscribers.

The top-end loss is made up for ongoing lower-tiered subscriber growth, increasing from 8.7 to 8.9 million subscribers. The mass-market DStv Family, DStv Access, and DStv EasyView subscribers grew by 6%, from 4.4 million to 4.7 million.

The result is that MultiChoice’s monthly average revenue per user (ARPU) continues to decline, this time by another 2% from R278 to R273. 

What it means is that although MultiChoice continues to have more subscribers, it makes less money per subscriber since it keeps losing DStv Premium and DStv Compact Plus subscribers, who are its most valuable subscriber segment. 

Showmax subscribers are growing, however, with paying Showmax subscribers increasing by 42% and with overall online users rising 33% from the prior period, “representing a 3% gain in share of the African OTT market since December 2020,” MultiChoice says.

Sport is not luring DStv Premium subscribers back or stemming DStv subscriber churn as MultiChoice suggested would be the case earlier this year.

In June, MultiChoice Group CEO Calvo Mawela told investors that rugby broadcasts are one of the biggest drivers of DStv Premium uptake. The loss of rugby because of the Covid-19 coronavirus pandemic was a huge reason behind the ongoing decline in DStv Premium subscribers in the previous financial year.

“What we’ve seen is that as a result of the lack of rugby, you see people coming down, but as soon as rugby comes back, you see people going up,” Mawela said. However, while rugby and other sports returned to SuperSport the past few months, DStv Premium subscribers didn’t.

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