Under-pressure MultiChoice to add solar to DStv package
Video entertainment company MultiChoice is planning to bundle alternative energy solutions − such as solar − with its DStv offering, in a bid to bring back subscribers who have ditched the platform after being frustrated by load-shedding.
This was revealed by MultiChoice group CEO Calvo Mawela in an interview with ITWeb yesterday, following the release of the company’s interim results for the six months ended 30 September.
In the South African market, MultChoice points out that load-shedding remained the most immediate challenge in terms of subscriber activity. The number of active days per subscriber declined by 5% due to a significant increase in the frequency and intensity of load-shedding, especially in Q1 of the reporting period.
The group reported a 5% decline in 90-day active customers to 8.6 million (3% of which can be attributed to the decision to end the short-term campaigns implemented in the prior year to support customers during load-shedding), with active customers amounting to 7.8 million.
The decline coincides with the entrance of international streaming services, such as Netflix, which increased competition for MultiChoice.
“On the South African side, we were hit hard by load-shedding in May, in particular. What we see is that subscribers respond very quickly when load-shedding is at its worst, and when it improves, they don’t come back immediately,” said Mawela.
“They look at whether the improvement will be consistent, and only then will they respond. So, we were hit hard by that.”
He said during the period, MultiChoice decided to discontinue some discounted offers and promotions that it had initiated when subscribers were hard-pressed by the effects of COVID-19.
“We decided to stop all those promotions, and out of that, we wiped out 311 000 subscribers who were part of that initiative. Now we are just focusing on regular paying customers, hence you see that decline.”
Amid the power crisis, Mawela revealed the firm is looking to solar to tackle the challenge.
“We are speaking to people that do solar and other forms of energy, where we are trying to package something that we can offer to our customers for them to be able to watch when load-shedding kicks in.
“We will package an alternative source of energy with a subscription and say ‘we know you are struggling with power; here is an alternative power solution that will help you to power your TV and decoder, and be able to continue watching DStv.
“The other initiative is to encourage subscribers to take the streaming service, which means they can charge their devices and continue watching. So, it’s a multi-pronged approach to make sure people keep engaging with our products.
“We believe this will go a long way in terms of addressing the need for people to be able to continue watching television, even during load-shedding.
“However, as a country, we really need to confront this problem and get this thing solved. I don’t think it makes sense for a country as big as South Africa to continue to have intermittent power. We need to get our act together and solve this problem,” he said.
Mawela does not believe the dwindling subscriber numbers are as a result of competition from the likes of Netflix, as eight out of 10 people that have got Netflix subscriptions are DStv subscribers.
“It’s only 20% that you will find that are purely just [Netflix] streaming subscribers because there is still a lot they don’t get from these international players.
“They don’t have sport; they don’t have news; they don’t have as much local content as we have. As South Africans, we love to watch ourselves on television; we want to watch our own stories that we can relate to, stories that speak to our culture, our language and so forth, which the multinational streaming services do not provide.
“Therefore, we feel very strongly that there is a small chunk that we can attribute [the decline in subscribers] to, but there is a big chunk driven by macro-economic conditions that we find ourselves in, and load-shedding also doesn’t help.”
Mawela does not believe there is a link between the declining subscriber base and the company’s move to restrict password sharing. Since last year, MultiChoice put an end to the practice of password sharing, saying some of its customers were grossly abusing the service.
“Piracy is a huge issue for us. It’s something that we are actively working to curb. That’s why we started by limiting concurrent streaming. We have seen subscriptions coming through as a result of the curbing of concurrent streams.
“We believe that such interventions are necessary for us to be able to grow the business,” he concluded.