DStv woos premium, high-paying customer segment with subscription price cuts

It has come as no surprise, at least to some market watchers, that MultiChoice is pulling out all the stops to keep existing customers watching its DStv pay-TV service while also attempting to attract new ones.

In the latest move, MultiChoice has cut subscription prices for its premium DStv stream offering, which usually targets middle to high-income households. DStv stream provides access to live and video-on-demand content without needing a satellite dish or decoder. It also includes the full suite of DStv entertainment and news channels, plus all of the SuperSport channels. Prices for its lower-priced video streaming offerings and satellite subscriptions have not been adjusted.

MultiChoice has lowered the price of its DStv Stream Premium package by R100 or 12.5% to R699 per month – a benefit that will apply only if customers commit to a 12-month contract. 

MultiChoice customers have cancelled subscriptions in their droves over the past few years. Customers in the premium segment are considered well-heeled and able to afford other streaming services such as Netflix, Disney+, Amazon Prime Video and Apple TV+.

MultiChoice has 22 million customers consuming the content of its various platforms, DStv, DStv Stream and Showmax (the group’s other video-on-demand service). 

DStv has been losing subscribers in the premium segment since 2021, seeing a cumulative 17% decline in customers.

In the year ending 31 March 2024, MultiChoice lost 200,000 top-end DStv subscribers. The company has long argued that it is “reducing the rate of decline”, and that it anticipates a major shift of customers from traditional satellite pay-TV to its streaming services. MultiChoice expects this trend to gain momentum from 2026 as it has invested a fair amount of money in updating Showmax.

MultiChoice has also lost customers in cheaper DStv packages due to a cost-of-living crisis in South Africa and the rest of Africa.

To stop the bleeding, MultiChoice has implemented several initiatives, including limiting DStv decoder customers to a single live stream per account. In August, MultiChoice signed a deal with Capitec allowing the bank’s customers to pay for and access Showmax for up to 50% less, using the bank’s online platform. In addition to reducing subscription prices for its premium package, it has also updated the offering’s viewing experience.

The DStv Stream app now has dedicated home pages for all channels with curated content, dedicated pages for sports tournaments – including previously played games, upcoming matches, and highlights – and a page where users can search for content according to studios like Disney or Warner Bros Discovery.   

It has also added live TV options which play channels as users browse, letting them preview content directly from the home page.

These options will be displayed in addition to existing channels, “making it easier for users to see what’s happening now and what’s coming up next. This functionality makes planning the viewing experience quick and simple, particularly around major events such as sports games”.

According to MultiChoice, the updates are positively impacting the DStv streaming user experience, “resulting in a 23% increase in the number of series and movies streamed on demand, a 17% increase in the number of titles that customers have added to their watchlists, and an overall 8% increase in content watched on DStv Stream compared to the previous month”.

A Johannesburg-based analyst said the price cut for the premium offering comes as no surprise as “the company has to retain customers in the segment, who usually pay the big bucks through their monthly subscriptions.” 

“Customers in the segment are valuable for MultiChoice and DStv. So, it has to offer inducements to keep them,” said the analyst. 

Anthony Sedgwick, fund manager at Abax Investments, says MultiChoice is in a bind. 

“We expect [that MultiChoice] will continue to battle against the economic headwinds of operating in SA, at least where the economy is not growing.  They can’t grow subscribers and will struggle to pass on cost increases,” Sedgwick previously told Daily Maverick. DM