DStv package changes are at least five years too late
· Citizen
There is obvious irony in MultiChoice positioning its DStv package changes, which came into effect on 17 September, as the “most significant product update in 15 years”.
Translated, this is an admission that its offering has been stale for a decade and a half.
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That Netflix has had active operations in South Africa (and on the continent) for a decade now – it celebrated this milestone in the same week the new DStv packages were unveiled – is a further indictment on the leadership and lack of decision making at MultiChoice over this period.
Even when faced with a kind of near-existential threat posed by Netflix, it did close to nothing with its core pay TV product, electing to spend hundreds of millions and then billions of rands on two iterations of Showmax, its Netflix competitor.
This distraction (both in management attention and monetarily) meant the core offering became stale.
In 2020, its big innovation was to introduce SuperSport Grandstand (201) and rename/reorder the other SuperSport channels into themes – think SS Premier League (203), SS Motorsport (215) and so on.
That decision was about half a decade late but the inertia across the entire organisation meant that decisions were constantly deferred and never taken.
Pushing away ‘premium’ business
All that was certain were the annual subscription increases, which made it easier for Premium customers – especially those not particularly interested in sport – to abandon the platform for more traditional streaming competitors like Netflix, Disney+ and (Amazon) Prime Video as well as non-traditional ones like YouTube.
The mass market (packages at around R99 a month) was still growing – in some years very strongly – and this helped paper over the cracks at the higher end of the subscriber base.
And then the lockdowns enforced during the Covid-19 pandemic provided an artificial boost. With limited options on which to spend disposable income, subscribers flocked (and in many cases returned) to DStv.
That was precisely the right moment to have launched the packages it debuted last week (and which leaked earlier in September).
That it took five years cannot be blamed entirely on the takeover of the group by Canal+ (a protracted transaction that took 18 months). Sure, this would’ve delayed certain decisions further – a point made by MultiChoice LicenceCo head Willington Ngwepe – but those decisions ought not to have been imminent in 2024 or 2025.
Imagine how much stronger the DStv proposition – and subscriber base – would be today had these changes been made in 2019 or 2020?
Moreover, imagine how much simpler the DStv packages would be by now!
Where to next …
Byron du Plessis, CEO of SA Pay-TV at Canal+ Africa, says the plan over time “is to have less add-ons and more stuff baked into the base packages” because the complexity “just confuses the customer and we really don’t get a lot of scale on it”.
He references the point made by Canal+ that DStv had 17 different price points for its packages in SA.
“If you’re buying from Netflix, you’ve essentially got one content proposition with some bells and whistles that change the price point,” says Du Plessis.
It had a golden opportunity to remove a lot of this complexity with these changes, but instead actually added more!
Four of the five new packages are mapped directly to legacy ones, but Movies & Series is entirely new (customers would therefore need to specifically move or subscribe to this package).
Compact Plus subscribers are left in no-man’s land, with a temporary discounted ‘upgrade’ to Premium for 12 months, whereafter they need to either stay or select another package.
Prices still differ for all packages depending on whether they are accessed via satellite or streaming, bar one – the new Movies & Series option.
There’s still EasyView (at R30 per month), which remains on offer but is not being actively promoted as one of the five new packages.
Oh yes, and the Add Movies bolt on (R49 per month) and PVR access fee (R125 per month) both remain.
The Sports package
At R399 per month (streaming), Du Plessis is correct when he describes the Sports ‘pack’ as “amazing value for what you’re getting” – saying he would be very surprised if one could find all those sports anywhere else in the world “for essentially $25”.
Subscribers are also right to criticise the Sports package as being misleading as it doesn’t offer access to all sport (and is heavily skewed to football).
The sticking points are clearly Springbok rugby and F1 – that much is clear. One could argue that tennis and golf majors as well as MotoGP are more niche products.
What if it added a ‘Sports Plus’ package at, say, R599 per month which included all live Springbok rugby matches (but not SVNS or other international rugby) and F1 races (but perhaps not qualifying races, for arguments’ sake)?
There’s sufficient differentiation between the base Sports package, this hypothetical one, and Premium to justify the price points.
Only R200 extra per month for F1 and Springboks could be seen as a fantastic deal.
Plus, the giant gap between DStv Sports and DStv Premium would be substantially narrowed.
Canal+ packages in its home market (France) illustrate the point. Its Sport package is €29.99 (around R560-R570) – the same price as its Movies & Series package.
That’s the real opportunity for this market: There are those who would pay that amount for a sports package that includes F1 and the Springboks, and there are those who will happily pay for the full Premium slate.
This article was republished from Moneyweb. Read the original here.