South African pay-TV provider, MultiChoice, is facing a mass exodus of subscribers as affordable broadband and the popularity of online streaming services increase across the country. The company’s latest annual report, for the year ending March 31, 2024, reveals that active DStv subscribers in South Africa have declined from 8 million to 7.6 million in the past year.
While South Africa contributes to almost half of MultiChoice’s subscriber base, it accounts for 60% of the company’s total revenue, making it a crucial market for financial sustainability. The decline in subscribers has significantly affected the pay-TV giant, which recorded a loss of R4.1 billion, rendering the company “technically insolvent,” as reported by Daily Investor.
All segments of DStv’s subscriber base have seen a downturn, with DStv Premium declining by 8%, mid-market by 9%, and mass market by 1% year-on-year. Despite these challenges, MultiChoice cited reasons such as economic pressure, high living costs, and prolonged power outages as factors contributing to its dwindling subscriber base.
However, the rapid expansion of affordable, uncapped fibre services across South Africa has played a key role in subscribers abandoning DStv. Companies like Vumatel and Herotel have expanded fibre networks, even in middle- and lower-income areas, leading many households to switch to online streaming services.
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The availability of a wide range of streaming options—often free—has worsened DStv’s woes. Although MultiChoice attempted to counter the trend by bundling broadband access and launching streaming packages, these efforts have not gained the traction the company hoped for.
Adding to MultiChoice’s challenges, Telkom is set to launch a content aggregating platform bundling popular services like Netflix, Amazon Prime, and Disney+. This will allow subscribers to access multiple streaming services with a single subscription, presenting further competition to DStv’s offerings.
With entertainment shifting from satellite to online streaming, MultiChoice is now facing the reality of an existential threat posed by over-the-top (OTT) streaming services. Unless it can solidify its presence as a major player in the streaming industry through services like Showmax and DStv Stream, the company will continue to face significant challenges.
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