According to industry analysis, MultiChoice South Africa is facing a significant challenge. The average revenue per user for nearly all its DStv segments in the country and the Rest of Africa (RoA) is decreasing despite increasing prices each year.
MultiChoice’s recent results for the six months ended 30 September 2022 revealed an increase in revenue and operating profit but a significant decrease in profit after tax.
The Rest of Africa was the star performer in the group, with a 28 per cent increase in revenue from US$488 million to US$624 million.
The results also showed that RoA subscription fees grew 26 per cent — from US$446 million to US$564 million — while advertising revenue increased 70per cent.
However, in South Africa, the picture looked very different. Revenue declined from US$ 1,046 billion to US$1,023 billion due to lower subscription fees and declining advertising revenue.
The decline in subscription fees in South Africa came despite an increased subscriber base and higher DStv prices, while the average revenue per user (ARPU) experienced a significant decline.
According to industry experts, DStv subscribers in South Africa are abandoning expensive DStv packages altogether or downgrading to cheaper bouquets.
Over the last year, the blended ARPU of DStv subscribers in South Africa declined from US$16.05 per month to US$15.35 per month.
The pay-TV operator is also facing increased competition from affordable streaming services like Netflix and Disney+, making rising prices even more difficult.
In the RoA, the premium segment’s ARPU declined by 3 per cent, mid-market ARPU declined by 4 per cent, and mass-market ARPU increased by 4 per cent.
