In an article published in October, Bloomberg News carried a report that Multichoice, Naspers Pay Television business in Africa was struggling. The number of subscribers over the last year has fallen by nearly 300,000 with most being cancellations while trading profit was down 17% in the year. Part of this cancellation was owing to the high price point DSTV charges as well as the emergence of alternatives such as Netflix. The entry of other players such as StarTimes with a Pan African presence and charging lower subscription fees has also intensified competition.
In early August, Multichoice announced that its subsidiary GOtv was reducing the prices of all its packages in addition to adding more sports content in Kenya. The changes saw Gotv slash by 28% the prices of GOtv Value bouquet from KSh. 650 to Ksh. 470. The price of GOtv Lite bouquet was reduced to Kshs. Ksh. 840 per annum down from Kshs. 1800. The price of the GOtv decoder and GOtenna has also went down to Ksh. 2999 from the previous cost of Ksh. 3999. This was followed by a 60% price reduction in the price of DSTV Explora from Kshs. 30,650 to Kshs. 12,500. The new price is inclusive of the decoder, cabling and installation costs.These moves were preceded by another decision early in the year, where DSTV opened up its packages allowing DSTV compact users to view more sports channels. These moves were aimed at reversing the trend and making the firm more competitive.
The firm seems keen on being innovative in content besides acknowledging some of the long-term calls by the customers. MNET CEO recently featured in a South African podcast called The Money Show with Bruce Whitfield, where a whole range of issues regarding Multichoice and the future were discussed. In the podcast, the CEO acknowledges the threat posed by Netflix and Amazon going forward and sees these as major threats to the business. The CEO also addressed the notion that most subscribers of the service are in it for the Sports content, stating that the company has made huge strides in content discovery to avoid repeats and ensures they offer users the very best of content.
One interesting takeaway was the revelation that DSTV was looking towards allowing subscribers to choose their own channels and paying specifically for those channels. The decision has been owing to spirited consumer requests and the firm feels this would add more value to the customers. In the past, Multichoice has stated that letting consumers choose their own channels would be expensive for customers and that its business model was structured on the basis of a number of predetermined packages. This allows the firm to give subscribers the benefits of economies of scale.
If implemented, this would certainly be a game changer for both the firm and consumers. It’s something subscribers even in Kenya have asked for and would certainly give the consumer more choice.
