DStv subscribers continue to grow although customers continue to abandon top-tiered DStv Premium

DStv Now. (Photo supplied)
DStv Now. (Photo supplied)

Cape Town - MultiChoice has shown another increase in its overall number of DStv subscribers although the African-based pay-TV operator continues to lose top-end DStv Premium subscribers who are abandoning the most expensive tier that no longer offers enough value for money.

The MultiChoice Group on Tuesday published its annual financial results for the year that ended 31 March 2019, showing that while its overall number of DStv subscribers continue to grow, DStv Premium subscribers continue to decline due to stiff competition from international video streaming services, as well as tough economic conditions putting pressure on consumers' discretionary spending habits.

"The South African business delivered subscriber growth of 8% year-on-year or 500 000 subscribers and generated revenues of R33.7 billion, up 3% (4% organic) from the prior year," The MultiChoice Group said.

"The DStv Premium segment remained under pressure as consumers were impacted by rising fuel and other costs, and we competed for a share of wallet."

READ MORE: DStv CEO: Why you can’t pick your own TV channels

MultiChoice said that online services like Showmax and DStv Now performed well and that online subscribers doubled year-over-year thanks to "good uptake".

Because of the ongoing loss of DStv Premium subscribers - MultiChoice's most valuable customers - the ARPU was once again down. ARPU stands for "average revenue per user".

What the drop in the overall percentage of DStv Premium subscriber numbers means is that MultiChoice is making less average revenue per subscriber.

MultiChoice's "ARPU declined from R335 to R322 due to the ongoing change in subscriber mix towards the mass market," the pay-TV operator said that was spin-off from Naspers and listed separately on the Johannesburg Stock Exchange (JSE) at the end of February.

DStv Premium subscribers declined from 22% in the previous financial year to 20% at the end of March 2019. The mid-tier subscribers – DStv Compact Plus and DStv Compact – also showed a marginal decline going from 40% of all overall subscribers to 38% by the end of March 2019.

The low-end subscriber segment has grown from 37% to 42%.

The MultiChoice Group added another 1.6 million pay-TV subscribers across Africa during the financial year and now has a total of 15.1 million pay-TV customers, of which 7.4 million are in South Africa, and 7.7 million are in the rest of Africa outside of Africa.

This is the first time that the "rest of Africa" has more pay-TV subscribers on a combined basis than pay-TV subscribers in just South Africa.

The MultiChoice Group generated R50.1 billion in revenue, an increase of 6%. The pay-TV operator also upped its investment in local content production and added 4 600 hours of local content to its library.

"The spend on local general entertainment content as a percentage of total general entertainment content increased from 38% to 40% in line with the strategy to reach a target of 45%," The MultiChoice Group said.

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