DStv disaster

South Africans are dumping DStv, with the company’s 90-day active subscriber base in the country declining by 700,000 people over the past financial year while its operations in the rest of Africa lost 1.8 million subscribers.

MultiChoice, which owns DStv, released its annual results for the 2024 financial year today, showing that the decline in its subscriber base continues unabated. 

The company admitted that despite an expected decline in subscribers following a financial year that included the FIFA World Cup, it was not expecting such a sharp drop. 

DStv’s subscriber growth tends to be outsized during years with major sporting events as people sign up for their service to watch. This is particularly prevalent during football World Cup years. 

In turn, the year following a major sporting event tends to see muted subscriber growth and even a decline due to people unsubscribing as they no longer see a need to pay for the service. 

MultiChoice attributed the sharper-than-expected decline to a difficult macroeconomic environment and a consumer that has come under increasing financial pressure. 

It also continued to blame load-shedding despite the intensity of power cuts reducing in the second half of its reporting period. 

“Despite the typical resilience of pay-TV in a downturn, many of our would-be customers cannot afford to consistently pay for our product or choose not to subscribe when power availability is unreliable,” the company said. 

DStv’s premium subscriber base was particularly hard hit, declining by 15% over the financial year from 2.7 million to 2.3 million subscribers. Its mass-market offering showed more resilience, with a 5% decline. 

This decline is not unique to DStv and the company’s South African operations, with its subscriber base declining just as deeply across the rest of Africa. 

The company’s rest of Africa business saw its subscriber numbers plummet by 13%, losing around 1.8 million customers. 

This means that in the past financial year, DStv has lost 2.5 million subscribers across the continent. The decline in DStv’s 90-day subscriber base across its business is shown in the graph below. 

MultiChoice said it was able to prevent a subsequent decline in revenue due to its subscriber drop by hiking the prices of its products. 

This reveals a potentially fatal flaw in the company’s strategy, with rising prices a factor in pushing South Africans to drop its service. 

From 1 April this year, DStv increased its satellite pay-TV packages by between 3.1% and 7.8%, while its streaming-only packages will remain unchanged.

South African consumers are stretched financially and cannot afford more expensive DStv services.

However, MultiChoice is in a pickle. It faces declining revenue in South Africa, and the expedient way to address this decline is through higher prices.

Unfortunately, MultiChoice’s this is likely to continue the company’s downward spiral, with more high-end subscribers downgrading or cutting the cord completely.

It has long-touted Showmax as the long-term solution to this problem and has been increasing prices for its satellite packages while keeping its streaming prices flat to accelerate the shift to its new product. 

MultiChoice is betting on Showmax to compete with Netflix, Disney+, and Amazon Prime Video to become the leading streaming service in Africa.

It has pumped money into the revamped streaming service, while its traditional satellite service has received minimal focus and resources. 

Despite this, DStv is still the company’s main revenue stream and Showmax will have to grow tremendously to match it.