<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
JEREMY MAGGS: DStv has finally launched the sports-focused package that viewers have been demanding, I think for years.<\/p>\n
At R399 a month it includes, as I see it, Premier League and UEFA (Union of European Football Associations) football, the PSL (Premier Soccer League), cricket and local rugby.<\/p>\n
But here is the rub, Springbok rugby, Formula 1, golf and tennis remain reserved for Premium customers paying R799.<\/p>\n
So has DStv genuinely made premium sport more affordable, or has it simply moved the paywall?<\/p>\n
Well, Arthur Goldstuck is founder of the research company World Wide Worx and watches the media and technology space closely. Arthur, how significant then, and welcome to you, is the R399 package for DStv\u2019s competitive position?<\/p>\n
ARTHUR GOLDSTUCK: Thank you, Jeremy. It is definitely a big improvement for sports viewers, but it\u2019s also a very calculated piece of packaging because they\u2019ve moved far more sport into a package that costs \u201cjust\u201d R399 a month.<\/p>\n
I say just in inverted commas, because that\u2019s not really cheap these days.<\/p>\n
But when you consider that football actually is the most popular sport in South Africa, and that this includes every Premier League, Champions League and Professional Soccer League match, in other words, English football, European football and South African football, as well as full cricket coverage, then it is a very credible offering, but mainly for football and cricket followers. Definitely not for rugby fans.<\/p>\n
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JEREMY MAGGS: Which leads me on to the most obvious question then, how important is Springbok rugby then to the value of DStv Premium?<\/p>\n
ARTHUR GOLDSTUCK: It\u2019s very interesting to see this packaging because it sends a message and it tells you that they\u2019ve done the analysis and that it has appeared to Canal+ that rugby, and certainly international rugby, along with Formula 1, are in fact the drivers for Premium package subscribers.<\/p>\n
Read:<\/p>\n
MultiChoice cuts DStv Premium to R799, with a catch
\nLooming DStv package overhaul finally rips the sports bandage off<\/p>\n
So it\u2019s not only those, it\u2019s also major tennis and golf events which are now confined to the Premium package, but all of SuperSport rugby as well.<\/p>\n
So suddenly what we are seeing there is that the rugby fan and the Formula 1 fan are the cash cow for Canal+.<\/p>\n
JEREMY MAGGS: So what does that then tell us more broadly about DStv\u2019s pricing strategy going forward, do you think?<\/p>\n
ARTHUR GOLDSTUCK: Well, they have seen their subscriber base falling quite substantially, from close to 15 million, down to 14.5 million last year, and their revenue has dropped as well.<\/p>\n
They are trying to recover customers who have left because that full service costs too much.<\/p>\n
I think that 6% drop in revenue has got everything to do with the cost of that Premium package. They want to bring those customers back, but obviously paying a little less.<\/p>\n
You\u2019re going to see the football supporters who can afford that package coming back, and cricket supporters also will come back for that. Rugby supporters get something of an upgrade, they get domestic rugby and selected club rugby, as part of that package.<\/p>\n
Read:\u00a0What\u2019s taken DStv so long to overhaul its packages?<\/p>\n
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But they\u2019re going to have to pay more to get the Springbok tests. So it\u2019ll be very interesting to see whether this equation has been carefully enough thought through and whether it will work for Canal+.<\/p>\n
JEREMY MAGGS: And the only way in which we know it\u2019s going to work is which customer DStv is most likely to win back with this package, and that, Arthur, is still going to be a long row to hoe.<\/p>\n
ARTHUR GOLDSTUCK: Indeed. Well, they\u2019ve won me back with the football package, I have to be honest, because I\u2019ve been scrambling about for an option to watch English soccer, especially over the past year or so, ever since Showmax closed down their football offering.<\/p>\n
I do believe that this will be big enough news for a substantial chunk of South Africans to come back on board.<\/p>\n
JEREMY MAGGS: Having said that, though, you raise a very important point about DStv\u2019s sport and several other streaming services which are competing, and that\u2019s the next front of the battle, I guess.<\/p>\n
ARTHUR GOLDSTUCK: Indeed. But fortunately for DStv, no one actually stepped up to the plate, so to speak, to mix my sporting metaphors, to come in to bat on behalf of South African sports fans. So it left them free to work out how to best address this gap and how to win back the fans.<\/p>\n
Read:<\/p>\n
How Canal+ will turn around battling MultiChoice
\nCracks start appearing in DStv\u2019s last stronghold \u2026 sport<\/p>\n
Had someone else realised, or had one of the other services realised, that there was an opportunity here, we might have seen a more competitive field, but no one seemed to have woken up to that opportunity.<\/p>\n
JEREMY MAGGS: You raised a very important point earlier in this conversation about that R399 still being a lot of money for many people. How compelling is that threshold, do you think, for households who are already cutting back on their entertainment spending? It surely is significant at that point, if you look at the middle chunk of the market.<\/p>\n
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ARTHUR GOLDSTUCK: There\u2019s no question that R399 is not going to be seen as a bargain, especially when you had Showmax offering a similar kind of service. Certainly, when it came to English football at a about a quarter of that price.<\/p>\n
But if you add up that R399 a month, it\u2019s close to R5 000 a year, and already viewers are paying separately for internet access and for other streaming services.<\/p>\n
When they look at this cost versus, for example, Netflix or Disney+ or Amazon Prime, that are substantially more affordable than the sports package, they\u2019re going to be comparing the value and the benefit they get from those. I think that it\u2019s the foreign streamers that will work better for them than the DStv sports offering.<\/p>\n
JEREMY MAGGS: Arthur, how much do you think DStv subscriber decline reflects pricing, as we\u2019re discussing, rather than, as you\u2019ve already alluded to, changing viewing habits?<\/p>\n
ARTHUR GOLDSTUCK: I do believe that the cost of that Premium package over time has been the prime culprit in the in the declining viewership of satellite TV, because it was simply not sustainable, especially when one compared it to the cost of any streaming service where you could get almost unlimited movies and series, sports being the only differentiator and no longer enough of a differentiator.<\/p>\n
JEREMY MAGGS: So what do you think will tell us in 12 to 18 months\u2019 time from now that this change, this overhaul has actually worked?<\/p>\n
ARTHUR GOLDSTUCK: There are going to be two key metrics in terms of subscriber numbers. Firstly, the number of subscribers who come back or who sign on to what was the compact service and now the DStv sports service.<\/p>\n
Then of course, the number who hold on to Premium or come back to Premium for the rugby.<\/p>\n
Those are the two critical numbers and, of course, it will reflect overall in revenue as well. That\u2019s the bottom line, finally, what impact it has on revenue. I suspect we\u2019ll see a further decline.<\/p>\n
JEREMY MAGGS: Arthur Goldstuck is the founder of the tech research company World Wide Worx.<\/p>\n
#DStvs #cheaper #sports #package #costly #catch<\/p>\n","protected":false},"excerpt":{"rendered":"
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