MultiChoice, the company behind DStv, is teetering on the edge of a financial crisis following a devastating annual report for the year ending 31 March 2024.
The pay-TV giant has reported a significant decline in its South African subscriber base, alongside a staggering R4.1 billion loss, which has left the company on the brink of technical insolvency.
Numbers paint a bleak picture.
DStv subscribers in South Africa dropped from 8.0 million to 7.6 million over the year, impacting all tiers of its service. The premium segment, once the flagship of DStv’s offering, saw an 8% drop in subscribers, while the mid-market segment experienced an even steeper decline of 9%. Even the mass-market packages, typically the most resilient to economic shocks, shrank by 1%. These losses are compounded by a growing shift away from traditional satellite TV in favour of more affordable, internet-based streaming options.
In its report, MultiChoice cited several factors for the subscriber exodus, including South Africa’s severe economic downturn, increasing consumer financial distress, a higher cost of living, and surging interest rates.
Additionally, the company pointed to the country’s ongoing load-shedding crisis, which has hampered viewership and discouraged customers from renewing their subscriptions.
“We are operating in a challenging economic environment where many consumers simply cannot afford to maintain their DStv packages,” the company explained.
But beneath the surface, these factors tell only part of the story. The core issue is the rapid shift in consumer preferences, driven by the growing availability of uncapped broadband and the rise of streaming services. Over the past decade, affordable fibre internet has transformed the entertainment landscape, with more South Africans opting for platforms like Netflix, Amazon Prime, and Disney+, which offer extensive content libraries at a fraction of the cost of traditional satellite TV. As a result, DStv’s value proposition has steadily eroded, particularly in middle- and lower-income households, where cheaper internet options have made streaming the preferred choice.
MultiChoice has been slow to adapt.
Attempts to counteract this shift by bundling broadband access with its DStv packages have largely failed to gain traction. The company recently scrapped its DStv Internet fibre products, acknowledging that the uptake had been “disappointing.” The bundled offers combining premium or compact subscriptions with internet access have been discontinued, with MultiChoice promising to continue evaluating its internet service offerings as market demands evolve.
The situation is further complicated by the looming threat of Telkom, which is preparing to launch an aggressive challenge to DStv’s dominance.
Telkom’s upcoming platform will aggregate popular streaming services like Netflix, Amazon Prime, and Disney+ into a single bundle, complete with the necessary data for streaming.
This approach directly targets DStv’s remaining customer base, particularly those who have resisted switching due to concerns over data costs. “The future is internet streaming, not satellite,” Telkom Consumer CEO Lunga Siyo recently remarked, underscoring the growing shift away from traditional broadcasting.
MultiChoice has long been aware of the threat posed by over-the-top (OTT) services such as Netflix and YouTube, which deliver content directly over the internet, bypassing traditional pay-TV operators. These warnings have now come to fruition. Unless MultiChoice can reinvent itself as a major player in the streaming world, through platforms like Showmax and DStv Stream, its future looks uncertain.
As the entertainment market continues to evolve, MultiChoice’s once-unchallenged position in South African homes is fading fast. The company’s mounting losses, declining subscriber base, and increasing competition all point to the urgent need for a strategic overhaul.
Without drastic measures to win back customers and compete with internet-based services, DStv’s dominance may soon become a thing of the past.
